On February 15, 2023, Oleksiy Orzhel was appointed as the Chairman of the Ukrainian Association of Renewable Energy.

Oleksiy Orzhel has replaced Oleksandr Kozakevich in this position, who has recently joined the Armed Forces of Ukraine. 

Mr. Orzhel has many years of experience in the Fuel & Energy sector. He used to work for National Energy Regulator (NEURC), and private companies. In 2019-2020 was the Minister of Energy and Environmental Protection of Ukraine.

"In the conditions when your neighbor is a terrorist country, renewable energy sources are almost the only way to develop and restore the energy system of Ukraine. These technologies are the most accessible, and faster in terms of construction rates.  RES is the distributed generation, which makes our energy system more resilient, and is also safe for citizens and the environment in conditions of military operations or in case of terrorist attacks.

As the Chairman of the Ukrainian Association of Renewable Energy, I plan to deal with both strategic issues of the development of RES and the electricity sector, as well as solving current problems of the industry's functioning," Orzhel notes.

On September 8, 2022, the Supreme Court of Ukraine satisfied the cassation appeal of the Member companies of the Ukrainian Association of Renewable Energy regarding the legality of the application of the formula for calculating the imbalances of electricity producers from renewable sources: the change in the formula for calculating the imbalances by the Guaranteed Buyer, which entered into force in January 2021, was recognized as illegal. According to the court's decision, the calculation of imbalances should be carried out according to the “old” formula, which does not take into account the errors of the Guaranteed Buyer's trading strategy.

As is known, the production of electricity from renewable sources (RES) depends on natural factors and does not have an even schedule, and for the deviation of the actual volumes of electricity production from the forecast - the so-called imbalance - producers of electricity from RES pay fines. However, starting January 16, 2021, a new formula for calculating the responsibility of RES producers for the imbalance began to apply in Ukraine. The “new” formula obliged RES producers to compensate the Guaranteed Buyer's underachieved income, which arises as a result of its trading strategy and the state of the electricity market, which is regulated by the NERC (National Energy Regulating Comission). That is, RES producers had to compensate for the difference between the price of electric energy, which was formed on the day-ahead market, and the price on the balancing market, which is few times lower, for the entire amount of electric energy, which was not sold by the Guaranteed Buyer to the balancing market, and which in some months was more than 50% of the forecast.

As a result of the effect of this formula, in some months of the 2022, the amounts of fines for imbalance for RES producers were greater than the revenue they received from the sale of electricity.

Oleksandr Kozakevych, head of UAКE, notes: "Numerous appeals from RES associations with clarifications regarding the lack of legal grounds for changing the formula were rejected by the Regulator, as well as the previous formula, the legality of which was confirmed by the decision of the same Regulator. It should be noted that the procedure for changing the formula began a few months after the signing, of the Memorandum of Understanding on the settlement of problematic issues in the field of renewable energy in Ukraine (which also was signed by the Head of Regulator), one of the conditions of which was the guarantee of the immutability of the legislation affecting on the economic condition of RES producers."

Therefore, the only way to resolve the disputed issue was to resolve it in court. RES producers, members of UARE, filed a lawsuit in court and challenged the formula for calculating imbalances. The court of first instance upheld the claim in favor of the RES producers, but this decision was overturned by the appeals court. However, last week the Supreme Court ruled in favor of RES producers and declared the “new” formula for calculating imbalances illegal.

Taking into account the court's decision, the Association is convinced that the amounts of shares of compensation for the cost of settlement of the Guaranteed Buyer's electricity imbalance, determined using an illegal formula, should be recalculated.

We call on the Regulator to implement measures to settle the issue of compensating the costs of RES producers incurred as a result of the application of the illegal formula as soon as possible.

March 10, 2022

Kyiv, Ukraine

Within 10 years, Ukraine has achieved significant results in the development of renewable energy: the installed capacity of RES amounted to 9.5 GW as of the beginning of 2022, total investment in the industry - more than $ 12 billion. Due to the Russian war against Ukraine, half of the RES facilities are threatened with complete or partial destruction as of March 11, 2022.

To destroy energy infrastructure - is one of the war tactics of the Russian Federation. The occupiers have already seized the Chernobyl and  Zaporizhzhia nuclear power plants, fired at and exposed to air strikes thermal power plants, destroyed electric transmission lines, gas pipelines, fuel storage depots and other energy infrastructure objects. 

Ukraine's renewable energy facilities are also at high risk of total or partial destruction. 47% of the installed capacity of renewable energy power plants is located in the regions where active hostilities are taking place. In addition, many RES stations are located in areas adjacent to these areas.

Thus, the vast majority of wind farms in Ukraine were built in the south of the country with the highest wind potential  - Zaporizhzhia, Kherson, Mykolaiv, Odesa regions. 89% of the wind farms capacity is located in areas where active hostilities are currently underway, another 9% are located in close proximity to regions with active hostilities. More than half of the wind farms have already been shut down.

37% of ground, 35% of roof / facade solar power plants and almost half (48%) of biomass stations are also located in areas of active hostilities, 34%, 19% and 42% respectively - in neighboring areas with an extremely high probability of hostilities.

The situation is slightly better with biogas stations and small hydropower plants: 29% of biogas plants 16% of small hydropower plants are located in areas of active hostilities.

Total investments in the Ukrainian RES sector over the last 10 years amount to $12 billion according to the Ukrainian Renewable Energy Association. As a result of the Russian military invasion, assets worth more than $5.6 billion in capital investment are currently in active hostilities regions. More than $ 3.6 billion in capital investment is in the regions adjacent to the areas where active hostilities are taking place. Accordingly, more than 3,970 MW of RES capacities are in areas of imminent threat of complete or partial destruction. Moreover, more than 2,400 MW are located in areas adjacent to active hostilities, where there is already a high threat of destruction, or some stations have already been destroyed.

Some of RES stations have already been shut down - some of them due to equipment damage, others - because of electric transmission lines destruction. There are registered cases of destruction of wind turbines, solar panels, electrical equipment of RES stations, electric transmission lines, and electrical substations. Soldiers of the Russian occupation forces steal all the equipment from the stations, everything that can be stolen and taken away.

An armed invasion on a peaceful country is a war crime. Given the cost of capital investment, the cost of restoring generation capacity, transmission lines, equipment, compensation for health and lives of renewable energy workers in Ukraine, Ukrainian renewable energy sector will demand compensation from Russian invaders in international courts. Damage caused by the Russian occupiers to all Ukrainian and international businesses on the territory of Ukraine must be compensated through international litigation.