On March 9, 2026, the President of Ukraine, Volodymyr Zelenskyy, signed Draft Law No. 13219, enacted as Law of Ukraine No. 4777-IX “On Amendments to Certain Legislative Acts Regarding the Improvement of the Functioning of Energy Markets, Competitive Conditions for the Production of Electricity from Alternative Energy Sources, and the Enhancement of Energy Resilience.” This legislation encompasses a comprehensive set of amendments that directly impact specific segments of the energy market.
Olga Savchenko, Senior Partner at Altelaw&Sempra, and Igor Retivov, Partner at Altelaw&Sempra, have prepared an exclusive analysis for ExPro Renewables, explaining the key changes that market players should anticipate.
For RES producers and investors in RES/ESS generation
Auctions for the allocation of support quotas
Important changes have been made to the mechanism for conducting auctions for the allocation of support quotas for the production of electricity from alternative sources.
In particular, the Law stipulates that support based on the results of auctions for the allocation of support quotas will be provided through a market premium mechanism. Thus, the legislator has responded to market signals regarding the non-viability of the contract for difference (CfD) model under current market conditions, as investors are not ready to enter into such contracts when the revenue is above the auction price and they have to pay immediately, whereas the shortfall in revenue if the price forms below the auction price will be paid with a delay of several months.
In fact, changing the mechanism to a market premium aims to:
The Ministry of Energy will annually approve the schedule of auctions, the annual support quota, and indicative forecast figures for annual quotas for the subsequent four years by December 1. Such decisions will be adopted upon the proposal of the Transmission System Operator (TSO), taking into account the provisions of strategic documents in the energy sector, in particular, the National Energy and Climate Plan (NECP). Furthermore, the possibility of establishing supplementary quotas depending on the results of the auctions and the needs of the power system is envisaged.
The annual support quota is subject to allocation among individual types of alternative energy sources. At the same time, minimum thresholds are established for certain categories of facilities. The share of the quota for solar energy facilities, wind energy, and other sources cannot be less than 5 percent, instead of the 10% previously stipulated. A separate category is designated for solar power plants (SPPs) implemented together with energy storage systems (ESS): for such projects, the minimum quota share is 10 percent.
Concurrently, additional technical requirements are established to classify a project under the “SPP+ESS” category. The ESS capacity must be at least 80 percent of the total installed capacity of the SPP, and the storage capacity must be at least 2 kWh for each kilowatt of installed capacity.
In the case of auctions for SPP+ESS, the Law provides for the introduction of special time parameters for providing support. A prerequisite for such an auction is the establishment of daily time intervals within which a participant can acquire the right to support under the market premium mechanism, while the rules must stipulate at least one period lasting two consecutive hours between 10:00 and 16:00 during which such support is not provided.
Additionally, a separate price benchmark for SPP+ESS is set at 12 euro cents per kWh, which is intended to stimulate the development of hybrid “generation + storage” solutions while maintaining a controlled level of state obligations.
Furthermore, the law confirms the limitation on the concentration of support within a single auction, setting it at a level of 50% not only of the annual but also of the supplementary annual support quota for the respective year.
The revision of the horizon for applying the auction mechanism is also significant. While it was previously envisioned that auctions for the allocation of support quotas would be held only until 2029, the new wording of the legislation extends this period to 2034. This means that the state retains auctions as the primary instrument for stimulating the development of renewable energy for at least another ten-year period. At the same time, the duration of support based on winning an auction remains unchanged and is 12 years.
To participate in the auction, it is now possible to submit not only an unconditional and irrevocable bank guarantee but also other forms of financial security. The amount of such security is set at 5,000 euros for each megawatt of installed capacity (in hryvnia equivalent at the official exchange rate of the National Bank of Ukraine).
The Law also clarifies the consequences of an auction winner’s refusal to sign a contract based on the auction results. In such an event, the bank guarantee or other financial security submitted for participation in the auction is not returned. Concurrently, exhaustive grounds and deadlines are defined for when such a guarantee is subject to return, thereby increasing legal certainty for participants.
The amount of security for fulfilling the obligation to construct a power facility has also been modified. The size of the guarantee submitted by the auction winner to confirm the intention to build the facility has been reduced from 15 euros to 10 euros for each kilowatt of installed capacity. At the same time, it is possible to extend the construction deadlines, provided that additional financial security in the amount of another 10 euros per kilowatt is deposited.
The deadlines for commissioning the facility are differentiated depending on the type of generation and the conditions of martial law:
Separately, the conditions related to confirming the possibility of connecting the facility to the electrical grids have been improved. The auction winner is granted 12 months, rather than 6, to submit a copy of the agreement on connecting the power facility or the agreement on capacity reservation.
The issue of permissible deviations of the actual capacity of the constructed facility from the one declared at the auction has also been regulated. It is not considered a breach of the contract terms if the actual installed capacity of the constructed facility or phase (start-up complex) differs by no more than 10% from the capacity for which the winner acquired the right to support. Support is provided within the limit of the capacity for which the winner actually acquired the right to support based on the auction results.
Additionally, the Law explicitly recognizes the possibility of participating in an auction not only with a complete power facility but also with a phase (start-up complex) of the facility, which allows large projects to be structured in stages.
For “green” tariff producers
It is legislatively established that the “green” tariff also applies to electricity supplied from an energy storage system owned by a producer operating under the “green” tariff, provided that such a system was charged with electricity produced by generating equipment from alternative energy sources, the owner of which is entitled to the “green” tariff.
Separately, for producers of electricity from solar radiation, the law introduces amendments aimed at combating the practice of night-time electricity supply by solar power plants. From now on, the volumes of electricity supplied:
are considered a positive imbalance.
Guarantees of Origin
A substantial block of amendments pertains to guarantees of origin (GoOs) for electricity produced from renewable sources. The law explicitly emphasizes that the creation, operation, and maintenance of the registry of guarantees of origin are carried out without applying the provisions of the Law of Ukraine “On Public Electronic Registries.”
To minimize tax risks, it is expressly established that guarantees of origin—transferred by electricity producers to the Guaranteed Buyer under electricity purchase and sale agreements and transferred automatically along with the supplied electricity—have no independent value.
Additionally, the international dimension of the guarantees of origin system has been expanded. The Regulator is granted the right to recognize guarantees of origin issued in the Member States of the European Union, the Contracting Parties to the Energy Community, as well as in other states. The NEURC may amend the protocol of Ukraine’s domain to enable Ukraine to acquire full membership in the international AIB (Association of Issuing Bodies).
Flexible connection and use of available capacity
A new concept has been introduced at the legislative level: flexible connection. This refers to the connection of electrical installations to the transmission or distribution system, which entails establishing conditions for limiting the permitted capacity, as well as measures to control such limitations.
The permitted capacity under a flexible connection may be partially guaranteed and partially non-guaranteed. In the case of a flexible connection, technical means must be installed at the connection point to ensure the automatic limitation or disconnection of electrical installations in the event the permitted capacity is exceeded.
Clarification of the “permitted capacity” concept and connection of bidirectional electrical installations
The concept of permitted capacity has been statutorily defined as the maximum capacity value allowed for the off-take and/or supply of electricity for each facility of a system user in accordance with the terms of the agreement. Simultaneously, the approach to the concept of connecting an electrical installation has been revised: it now encompasses the connection of electrical installations capable of both electricity off-take and supply.
Combination of generation, ESS, and consumption at a single point
The Law resolves a critical market issue regarding the possibility of combining consumption, generation, and energy storage systems (ESS) at a single connection point. For such a combined connection, mandatory separate commercial metering of electricity is stipulated for electrical installations belonging to different owners.
Netting in the payment of the distribution/transmission tariff for the “Producer + ESS” configuration
A netting mechanism has been introduced: the fee for distribution/transmission services is applied only to the difference between the volume of electricity taken from the grid to charge the storage facility and the volume of electricity supplied from such a facility back into the grid.
ESS Licensing
The capacity threshold below which energy storage activities do not require a license has been raised: a license is not required if the capacity of the installation within a single metering site does not exceed 5 MW.
Direct line
Specific amendments have been introduced to Article 25 of the Law of Ukraine “On the Electricity Market” concerning the connection of generating installations via the direct line mechanism. For biomass and biogas facilities, the scope of permissible cases has been expanded. Simultaneous power supply to a consumer from a direct line and from DSO/TSO grids is prohibited, with the exception of emergency situations.
For investors in cogeneration/gas turbine units
Producers of electricity using gas turbine/cogeneration units have been classified as distributed generation facilities and have obtained the right to sell electricity under bilateral agreements without the mandatory requirement to enter the exchange segments of the market.
Active consumers
The possibility for active consumers to operate under the simplified taxation system and be single tax payers has been statutorily consolidated. Self-production contracts must provide for the possibility of “monetary” settlements without a mutual offset mechanism.
ESCO (Energy Service Companies)
Projects utilizing alternative energy sources and ESS (Energy Storage System) installation projects have also been classified as energy efficiency measures. This creates the legal prerequisites for the development of “SPP + ESCO” models and other solutions in the field of decentralized energy.
For RES producers in occupied territories
The status of and settlements for RES facilities located in temporarily occupied territories have been regulated. The TSO is required to establish and publish a special registry of such facilities. Facilities included in the registry are deemed not to be supplying electricity to the controlled part of the IPS (Integrated Power System) of Ukraine during specified periods, and settlements for such volumes are not executed.
It is separately enshrined that the damage caused to producers of electricity from alternative sources as a result of the temporary occupation of Ukrainian territories is subject to compensation by the Russian Federation as the occupying state.
For electricity importers
The validity of the temporary exemption regarding the mandatory volume of electricity sales on the day-ahead market (DAM) has been extended until April 1, 2026.
For the TSO and market participants
The special procedure for allocating funds derived from the sale of cross-border interconnection capacity has been reinstated. For the period from January 1, 2025, to December 31, 2025, the funds shall be utilized in the following proportions:
For bioethanol producers
The mandatory share of bioethanol in motor gasolines has been increased: the total bioethanol content must be no less than 7% (excluding gasolines with an octane number of 98 and above), provided that the mass fraction of oxygen does not exceed 3.7 percent. Furthermore, reporting requirements regarding the actual bioethanol content have been strengthened.
For water supply and wastewater disposal entities
For the duration of martial law and for 12 months following its termination (but no earlier than two months from the date the law enters into force), licensing and tariff-setting powers are transferred to local self-government bodies, while the NEURC (National Energy and Utilities Regulatory Commission) retains its status as the sectoral regulator.
For alternative fuel heat supply entities
The “90% of the gas tariff” rule for heat produced from biomass has been abolished. The new approach provides for setting tariffs at a level equivalent to the tariffs for thermal energy generated from natural gas, or, upon a separate application, at the level of an economically justified tariff. In the event a decision is not made within the specified timeframe, the tariff may be deemed established automatically.
Development of small-scale charging infrastructure
Local self-government bodies have been granted the right to carry out cable-laying works to the installation sites of charging stations free of charge (provided that the capacity of such stations does not exceed 200 kW). A deadline of up to 15 days is stipulated for the review of investor applications.
For distribution system operators (DSOs)
The unblocking of the financial activities of DSOs in territories of active hostilities or temporary occupation is envisaged: seizures of funds imposed during enforcement proceedings regarding debts owed to the State Enterprise “Energorynok” are lifted.
For new buildings
Temporarily, for the duration of martial law and for three years following its termination, centralized water supply and wastewater disposal services in newly constructed apartment buildings (provided there are valid technical specifications, but without the completion of all requirements) shall be paid at the tariffs set for the residential population, subject to specific commercial metering conditions.
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