State Agency on Energy Efficiency and Energy Saving … · The Tax Code of Ukraine defines the...

State policy on renewable energy

in Ukraine

State Agency on Energy Efficiency and Energy Saving of Ukraine

Speaker: Igor KovalovDeputy of the Head of Renewable Energy Development

Department

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Opportunity of Austrian Enterprises in Realizing Biomass Projects in Ukraine, Workshop, Vienna, Austria, 8 May 2012

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TOTAL SUPPLY OF PRIMARY ENERGY

130 633 ktoe


* data of State Statistics Committee

2010 totalProduced 188 828,0 GWhImported 1 908,6 GWhConsumed, including losses 184 639,6 GWhExported 6 097,0 GWh

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Total average theoretical potential 98,0*, Mtce

* Institute of renewable energy NAS of Ukraine

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•Tax incentives providing to enterprises (Tax Code of

Ukraine, Laws of Ukraine “On energy saving”, “On alternative

fuels”, “On gas (methane) of coal deposits”, “On Single Customs

Tariff”, “On Value Added Tax”, etc)

• Usage of “green” tariff for electricity produced from

renewable energy sources

(Law of Ukraine “On Electricity”)


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1. According to paragraph 276.6 of Article 276 of the Tax Code of Ukraine tax on the landplots which is allocated for facilities building that gener ate electricity from renewableenergy, is charged at the rate of 25 percent of the fixed tax

2. According to subparagraph b) of paragraph 311.1 of Articl e 311 electricity that isproduced from renewable energy sources is exempted from pay ment of fee withsupplement to the current tariff for electricity and heat

3. According to paragraph 15 of subsection 4 of Section XX of t he Tax Code of Ukraine,temporarily, till 1 January 2020, is exempted from taxation :

• producers of biofuel profits which is derived from sale of biofuel;• profits of enterprises that are derived from simultaneous production of electricity and thermal

energy and/or thermal energy from biofuel;• profit of enterprises which produce technics and equipment that are defined with Article 7 of the

Law of Ukraine "On alternative fuels" for production and reconstruction of technical equipmentand vehicles, including self-propelled agricultural machinery and power plants with biologicalfuel consumption and is derived from sale of these technics and equipment

5. According to the Law of Ukraine "On gas (methane) of coal de posits" temporarily till 1January 2020 profits of enterprises which are derived from p roduction and use of gas(methane) of coal deposits are exempted from tax

4. According to subparagraph b) of paragraph 17 of subsectio n 4 of section XX of the TaxCode of Ukraine profits of enterprises which derive from sal e of electricity generatedfrom renewable energy sources are exempted from tax from 1 Ja nuary 2011 for 10 years


The Tax Code of Ukraine defines the specific taxation ofenterprises incomes which are derived with introduction ofequipment that use renewable energy sources, namely :

According to paragraph 158.1 of Article 158 of the TaxCode of Ukraine 80 percent of enterprises profits which arederived from sale goods on Ukraine's customs territory bythe list established by the Cabinet of Ministers of Ukraine :• equipment that use renewable energy; • materials, raw materials, equipment and components which will be used to produce energy from renewable energy sources; • energy efficient equipment, energy efficient materials and products which provide saving and efficient use of energy resources;• instrumentation of measurement, control and management of energy resources consumption;• equipment for alternative fuels production.

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Operations are temporarily exempted frompaying value added tax till 1 January 2019 in themanner prescribed in Paragraph 2 of Subsection 2of Section XX of the Tax Code of Ukraine:

• Delivery of technics, devices and equipment which aredefined with Article 7 of the Law of Ukraine "On alternative fuels"in Ukraine;

• Import by codes of Commodity Classification, which aredefined with Article 7 of the Law of Ukraine "On alternativefuels", technics and equipment that are used to reconstruction ofexisting and construction of new enterprises for biofuelproduction and also manufacture and reconstruction of technicalequipment and vehicles in order to use biofuel if such equipmentis not produced and does not have analogues in Ukraine

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The provisions of the Laws provides:“Green” tariff approved by the National Electricity Regulatory Commission of Ukraine for electricity produced by the entity for energy facilities that use alternative energy. “Green” tariff is calculated on the basis of the highest retail tariff for industrial consumers on 01/01/2009 in euro equivalent, multiplied by from 0,8 to 4,8:•1,2 - for electricity generated from wind power (capacity not exceeding 600 kW);•1,4 - for electricity generated from wind (capacity over 600 kW but not exceeding 2000 kW);•2,1 for electricity generated from wind power (capacity exceeding 2000 kW);•2,3 - for electricity produced from biomass;•4,8 - for electricity generated from solar ground power facilities;•4.6 - for electricity generated from solar energy facilities that are installed on the roofs of houses and buildings (capacity exceeding 100 kW);•4,4 for electricity generated from solar energy facilities that are installed on the roofs of houses and buildings (capacity not exceeding 100 kW);•0,8 - for electricity generated by small hydropower plants.

“Green” tariff for enterprises which produceelectricity from biomass is calculated on the basis ofthe retail tariff for industrial consumers of II voltageon 01/01/2009 in euro equivalent, multiplied by 2,3

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Enterprise Region Installed capacity, MW

"Green" tariff,UAH/ kWh

(without VAT)

JSC Kirovogradoliya Kirovograd 1,7 1,34

Co.LtdSmilaenerhopromtrans

Cherkassy 2,5 1,34


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Goals of the State Program

*the Program is approved by resolution of the Cabinet of Ministers of Ukraine № 243 of 1 March, 2010;the Program was supplemented with issue of renewable energy development and is approved by resolution of the Cabinet of Ministers of Ukraine N 447 of 27 April 2011

Energy balance structure of Ukraine optimization by achieving at least 10 % of the

share of energy produced from renewable energy sources and alternative fuels in 2015, by means of reduction of imported fossil fuels and

their replacement with other kinds of energy resources, including produced from the

alternative energy resources and secondary energy resources


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№Area of renewable

energy development

Total amount of renewable

energy facilities

Installed capacity, MW

Electricity production

in 2010,GWhtotal

installed in 2010

1 Wind energy 5 76,575 0 49,171

2 Solar energy 2 2,5 2,5 0,508

3 Small hydro power 24 63,201 0 192,515

4 Bioenergy, including 2 4,2 2,5 0,002

electricity from biogas 0 0 0 0

electricity from biomass 2 4,2 2,5 0,002

Total 33 146,476 5 242,196


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№Area of renewable

energy development

Total amount of renewable

energy facilities

Installed capacity, MW

Electricity production

in 2011,GWhtotal

installed in 2011

1 Wind energy 11 146,415 69,840 88,984

2 Solar energy 18 188,224 185,689 30,042

3 Small hydro power 73 70,816 2,258 203,463

4 Bioenergy, including 3 4,85 - 10,376

electricity from biogas 1 0,65 - 0,774

electricity from biomass 2 4,2 - 9,602

Total 105 410,305 257,787 332,865


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The activities of the State Target Economic Program for Energy Efficiency and the Development of Energy Production from

Renewable Energy Sources and Alternative Fuels from 2010 to 2015 include partially replacing oil products by

Biodiesel production:• 10 kt in 2012• 30 kt in 2015

From 2011 till 2015 it is planned to produce 80 kt of biodiesel

Bioethanol production:• 120 kt in 2012• 180 kt in 2015

From 2011 till 2015 it is planned to produce 600 kt of bioethanol

This production will enable to replace part of oil products (gasoline and diesel fuel) in the amount of 1.21 Mtce during 2011 - 2015 years


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The State Agency in accordance with the Statute dra ws the certificates of affiliation to alternative fuel s and also

provides maintenance of the Register of Alternative Fuels

The Registry of Alternative Fuels involves:• 90 manufacturers of solid fuel (pellets, granules); • 9 manufacturers of liquid fuel (biodiesel);• 54 manufacturers of liquid mixed fuel, including 46 manufacturers of

fuel based on bioethanol and 8 manufacturers of fuel based on biodiesel.

652 tons of solid biofuel (pellets and briquettes) a nd 27 tons of motor fuel based on bioethanol was produced in Ukrai ne in 2011


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THANK YOU FOR YOUR ATTENTION!

Speaker: Igor KovalyovDeputy of the Head of Renewable Energy Development

Department

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