NEURC Raised Electricity Transmission Tariff by 1.5 Times to UAH 240.2/MWh from August

The National Energy and Utilities Regulatory Commission has raised the electricity transmission tariff of TSO NPC Ukrenergo by 1.5 times from the current rate UAH 155.4/MWh to 240.23 UAH/MWh (VAT excluded) for paying up to the generators from renewable sources and other generation, the new tariff comes in force from August 1, 2020.

The decision has been made by the regulator at the meeting on July 11, 2020. The commission has raised the tariff on the back of a new volume of costs for renewables’ share increasing (payouts for SE Guaranteed Buyer for acquired green electricity).

From the beginning of the meeting and according to the data published before it, the commission had planned to increase the tariff to UAH 328/MWh (VAT excluded), but after the additional consultation the decision was reformulated and the regulator decreased the previous rate of the tariff to UAH 240.2/MWh (VAT excluded). As the Head of the Commission Mr. Valeriy Tarasyuk said, the lower rate of the transmission tariff will be possible to use if Ukrenergo raise additional funds from European and international banks.

“It will be difficult task… We will arrange meetings with banks in order to raise these funds”, commented Acting Chairman of the Management Board of Ukrenergo Mr. Volodymyr Kudrytskyi.

According to the data published before the NEURC’s meeting, the tariff previously viewed at UAH 328/MWh had already envisaged taking out the loans (128 million euros from the EBRD and 92 million euros from the European Investment Bank) and the usage of the earnings got from selling of cross-border capacity (UAH 1.4 billion).

As Mr. Tarasyuk mentioned, the new transmission tariff is needed for funding Guaranteed Buyer’s payouts for the generators during August-December 2020.

“We cleared the tariff out of the debts and shifted the compensation for them to other sources, took into account decreasing the feed-in tariffs according to the Memorandum (between the government and investors in renewables – ed.), allocated only the amount needed for the current payments for renewable generators, and got this rate (the previous level of UAH 328/MWh)”, said the Head of the NEURC.

Following Mr. Tarasyuk and Mr. Kudrytskyi, the new transmission tariff takes into account the provisions of the Memorandum. The provisions may be adopted as a law next week (July 13-17, 2020).

In the addition, the Commission adopted the electricity dispatch tariff at UAH 24.75/MWh (VAT excluded), which is 2.4 times more the current rate (UAH 10.23/MWh). It comes in force from August 1, 2020. The biggest percentage (85%) of the costs envisaged in the dispatch tariff makes up the value of ancillary services (UAH 5.266 billion for August-December 2020).