Ukraine slashes wind tariff by 7.5%

The Ukrainian parliament has approved a bill cutting the green tariff by 7.5% — from €102/MWh to €94.35/MWh — for wind farms commissioned between 1 July 2015 and 31 December 2019, effective from 1 July.

New installations in Ukraine are below expectations (pic: Esteyco)
New installations in Ukraine are below expectations (pic: Esteyco)

Projects commissioned before July 2015 are unaffected for now but are likely to follow suit, with tariffs for older projects currently under review.

Wind farms commissioned since 1 January 2020 will see a 2.5% reduction from the same date, leaving them with €99.45/MWh. 

According to the government’s estimates, the cuts will reduce the amount the state pays in tariffs by about €1 billion.

Andrei Gerus, chairman of the parliamentary energy committee, said Ukraine’s tariff had been too high — up to three times higher than those paid in Germany, he claimed.

These tariffs had mainly “served the interest of several local billionaires, who in recent years have made huge investments in the development of wind power in Ukraine, also with the use of bank loans,” Gerus added.

He was referring to major energy holding companies such as DTEK, owned by Ukranian oligarch Rinat Achmetov, which has become the largest generator of wind power in the country.

The country’s generous tariffs have meant payback periods for most wind farms did not exceed three or four years. 

Despite this, Ukraine has failed to meet the government’s targets for new wind power capacity in recent years, as not all planned projects were realised and, more recently, the Covid-19 pandemic has led to delays.

As of the beginning of June, the country’s total fleet stood at 1,075MW, less than half the government's 2,280MW goal.

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