Ukraine's Renewable Energy Crisis Rumbles On
Government Looking to Ratify Further Levy on Renewable Investors
In the coming days the Ukrainian Parliament (Verkhovna Rada) may begin to consider a draft law levying an increase in taxes on a range of business sectors, controversially including the renewable energy segment. The draft law removes electricity renewable energy sources (RES) from the list of sectors exempt from excise duty, effectively bringing in a new tax for solar and wind power plants at a rate 3,2% of the cost of renewable energy production.
Despite the fact the solar and wind power accounts only for 7% and hydropower accounted for 5% of electricity generation, the green energy sector accumulated 26% of all monetary settlements between buyers and sellers of electricity as of May 2020 making the sector an important sphere from the financial standpoint.
The stand-off between the Government and RES investors has become an issue impacting relations between Ukraine and the EU business community, but the conflict between the State and investors is rooted in the systemic problems of the Ukrainian green energy sector.
Kesarev takes a more in-depth look at the crisis that has gripped the sector since 2020 and tries to analyse potential ways out of the impasse for the Government.
