Ukraine has updated the mechanism governing its energy markets. These changes were enshrined in Law No. 4777-IX. In addition to transforming the support model for producers, the law revises quotas for various types of generation and introduces the possibility of flexible grid connection.
KPMG analyzed the document and explained what will change for renewable energy producers.
Most importantly, the law extends the term for holding “green” auctions until December 31, 2034. The document also details the distribution of the annual support quota among types of renewable energy sources:
- solar power without ESS – at least 5%;
- solar power with ESS – at least 10%;
- wind energy – at least 5%;
- other types of RES – at least 5%. This item excludes solar, wind, and coke oven gas energy. In the hydropower segment, it applies only to small, micro, and mini hydroelectric plants.
Hybrid projects will receive more support
The quotas listed above indicate an increased share of annual support for solar power plants equipped with energy storage systems (ESS). However, the document also introduces stricter rules for such hybrid stations. For example, the ESS capacity must be no less than 80% of the solar generation capacity, and for each 1 kW of solar power, there must be at least 2 kWh of energy storage capacity.
The maximum price for energy generated by such stations is set at no higher than €0.12.
Updated support mechanism
Instead of a contract for difference, the law establishes a one-sided market premium mechanism. That is, producers will no longer be required to pay the Guaranteed Buyer if the auction price turns out to be lower than the market price. However, the Guaranteed Buyer will continue to pay a market premium if the market price falls below the auction price, thereby compensating this difference for the producer.
The value of the net premium for solar power plants will be calculated only for the energy supplied to the grid during the following periods:
- from 4:00 to 23:00 in the period from April 1 to October 31;
- from 6:00 to 21:00 in the period from November 1 to March 31.
These time restrictions do not apply to energy storage systems that are part of hybrid solar power plants.
The law also changes the size of financial guarantees. To participate in an auction, the guarantee will be €5 per 1 kW of the declared capacity. The fee for an additional guarantee to ensure the fulfillment of obligations under the contract with the Guaranteed Buyer will amount to €10 per 1 kW. If construction is extended for a year, the additional guarantee remains €10 per 1 kW.
Connection to power grids
The law introduces the term “flexible connection.” It describes the possibility to connect to the grid with a limitation on permitted capacity. This can be applied on either a temporary or permanent basis. Such an approach is an alternative to grid reconstruction, which is usually quite costly and lengthy.
It will be possible to connect various types of electrical installations at a single point provided technical requirements are met. This refers particularly to generation, storage, and consumption.
Powering own facilities via internal networks will not require regulator approval, provided that technical conditions are met so that such networks are not classified as “direct lines.”
Ukrainian guarantees of origin
У The document addresses the issue of international recognition of electricity generated from renewable energy sources (RES). To achieve this, the law modifies the rules in the field of guarantees of origin (GoO), and also prepares the energy sector for accession to the Association of Issuing Bodies (AIB).
- In Ukraine, GoOs issued abroad will be recognized. This principle will be applied on a reciprocal basis.
- The "Ukraine domain protocol" may be adapted to AIB requirements. The National Energy and Utilities Regulatory Commission (NEURC) is granted the authority to do so.
Biofuel segment
The law introduces a mandatory share of biofuel in gasoline. This standard will come into force in 2026.
For this purpose, the document sets clear requirements for fuel composition, reporting, and liability in case of violations.
RES facilities under occupation
Ukraine will create a special registry of "green" capacities located in temporarily occupied territories or in areas of active hostilities.
If a facility is included in the registry, payments under the "green" tariff or auction price will be suspended.
Return to the normal model of interaction with the Guaranteed Buyer will occur after the complete de-occupation of the territories.
EcoPolitic previously reported that during 2025 Ukraine built more new wind energy capacities than in the previous three years combined. In the solar energy segment, last year equipment with a capacity of 1.5 GW was commissioned. This is almost twice as much as during 2024.
