Please find below the summary of the first official position on the draft law on Restructuring of the Feed-In Tariff support system that was officially presented by the Ministry of Energy today, 28 November 2019 (the “Restructuring Law”) by Vitaliy Radchenko, partner at CMS Cameron McKenna.
We note that this version of the draft law has not yet been registered in the Parliament and may be subject to further changes before and after such registration (as the draft law will be moving in the Parliament). We are sure that this draft will be further changed as it goes through the public discussion and commenting phase, as well as voting stages in the Parliament,
1. Commissioning deadline for current FITs. The Restructuring Law reduces deadlines for commissioning of renewable power producers’ (the “RPPs”) power facilities under Pre-PPAs that would be able to benefit from the current Feed-In Tariff regime. According to it, such power facilities must be commissioned before 1 April 2020 for solar, and 1 January 2021 for wind.
2. Restructuring Option for projects that have not been commissioned yet. At the same time, the Restructuring Law provides such RPP’s with Pre-PPAs executed before 31 December 2019 with an option to restructure their green tariff by executing by 1 April 2020 of the “extended” Pre-PPA. In this case, the FITs support will be provided for RPPs that have commissioned their power facilities until 1 July 2020 (for solar) and until 1 January 2021 (for wind) for the duration of 15 years after commissioning of the respective RPP.
3. Restructuring Option for projects that have been commissioned. In addition, the Restructuring Law establishes that RPPs, which already have commissioned their solar and wind power facilities between 1 January 2017 and 31 December 2019 can also restructure their green tariff by lowering the green tariff applicable to them in return for its extension until 2035. This also can be made only until 1 April 2020 by application to the Regulator for extension of the green tariff and execution with the Guaranteed Buyer of the ”extended” PPA.
Restructured tariffs. The Restructuring Law envisages the following decrease of the green tariffs for those projects that would apply for restructuring (by 1 April 2020):
The Restructuring Law provides for the stabilisation clause, according to which, the State shall guarantee that it will apply to the RPPs which have executed “extended” (restructured) PPAs or Pre-PPAs, the legislation (i.e., FREEZE IT and not INTRODUCE ANY NEGATIVE CHANGES) as of the date of their original (with exemption for any changes in law that decrease the taxes and fees or simplify regulatory requirements).
Please note that the Restructuring Law is mainly aimed at solar and wind power facilities and at the moment it is unclear on how it will apply to other alternative energy sources (as some of its wording is ambiguous with this regard).
The Restructuring Law also changes the share of the costs of the Guaranteed Buyer associated with settlement of imbalances of RPPs which RPPs must reimburse to the Guaranteed Buyer:
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