Ministry of Energy supported the introduction of an excise tax on renewable energy

The introduction of an excise tax on electricity produced at a "green" tariff will allow financially balancing the electricity market in general, and the RES generation in particular. This was announced on June 7, 2021, by Deputy Minister of Energy for European Integration Yaroslav Demchenkov.

"We have a big problem of financial balance in the energy sector, in the RES segment. And for us, it is very important to find a market mechanism to, firstly, pay off debts, and secondly, so that, further increasing the capacity of RES, do not be afflicted with debts. For us, such a kind of a tax system can be the answer to the issues," Demchenkov said.

As previously reported, on June 2, 2021, the Cabinet of Ministers of Ukraine registered in the Parliament of Ukraine the Draft Law № 5600 On amendments to Tax Code” to apply to RES electricity an excise tax of 3.2%, as it is for conventional electricity.

Excise tax on "green" electricity will reduce the income of all investors in RES by UAH 1.6 billion per year, according to analysis made by ExPro based on the FY 2021 tariffs for RES electricity provided by the National Energy and Utilities Regulation Commission (NEURC).

According to the NEURC, the total cost of "green" electricity in 2021 is estimated at UAH 51.259 billion.

On May 14, 2021, in a comment for ExPro, the Managing Partner of the consulting company IMEPOWER Yuri Kubrushko explained that the amount of excise for RES electricity will be taken into account within the amount paid to investors by the SE Guaranteed Buyer, as there are no other sources to cover offtaking of the RES electricity whatsoever.

Thus, the total amount of the RES excise, if assuming calculated for the entire 2021, could be will be UAH 1.64 billion, if it is 3.2% of the UAH 51.259 billion cost estimated for RES electricity as projected by the NEURC.

According to Kubrushko, the excise on RES electricity will deduct this amount (UAH 1.64 billion) from the total income of all investors engaged into the Ukrainian "green" energy sector.

10:43 / 14 June 2021

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