NEURC Brought Secondary Legislation in Line with the Law on “Green” Transformation

On 24 January 2024, the NEURC adopted the Resolution “On Amendments to Certain Resolutions of the National Energy and Utilities Regulatory Commission (NEURC)” (the “Resolution”) to bring the secondary legislation in line with the Law of Ukraine “On Amendments to Certain Laws of Ukraine on Restoration and Green Transformation of the Energy System of Ukraine” No. 3220-IX dated 30 June 2023 (the “Law on “Green” Transformation”).

On Approval of Regulatory Acts Governing the Activities of the Guaranteed Buyer (GB) and the Purchase of Electricity at the Feed-in Tariff (FIT)

These amendments mean that SE “Guaranteed Buyer” and the members of the balancing group of the GB are obliged to bring the agreement for the purchase and sale of electricity under the FIT in line with the model agreement for the purchase and sale of electricity under the FIT approved by the NEURC no later than the date of entry into force of the relevant provisions of the Law on “Green” Transformation (namely, by 26 January 2024) and conclude an agreement on participation in the balancing group of the GB.

If a member of the balancing group of the GB fails to update the mentioned agreements, the GB will not take into account the forecast data of electricity supply provided by such a member of the balancing group of the GB, the commercial metering administrator will not take into account the actual data of electricity supply by the electrical installations of such a member of the balancing group of the GB, and the GB will not buy the electricity produced by such a member.

NEURC Resolution No. 307 dated 14 March 2018

The Resolution approves amendments to the Market Rules approved by NEURC Resolution No. 307 dated 14 March 2018, which relate to the part of determining the volume of unreleased electricity, i.e. the difference between the volume of electricity that should have been supplied and the volume of electricity actually received by the consumer.

The Resolution approves amendments to the Market Rules approved by NEURC Resolution No. 307 dated 14 March 2018, which relate to the part of determining the volume of unreleased electricity, i.e. the difference between the volume of electricity that should have been supplied and the volume of electricity actually received by the consumer.

The most important change is an additional option to apply for the registration by an authorized representative of a non-resident of Ukraine in Excel(xls or xlsx) format through the electronic Services Portal of the Ministry of Economy (https://my.gov.ua/). Such electronic registrations must include a qualified electronic signature of the authorized representative in compliance with the requirements of the Laws of Ukraine “On Electronic Documents and Electronic Document Management” and “On Electronic Trust Services”.

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Chairman of the Regulator encourages all market participants to complete the registration by the new deadline if they are required to do so by law. Apparently, the deadline is unlikely to be postponed further, so if a market player carries out transactions involving wholesale energy products, it should comply with the registration requirements by April 1, 2024 to avoid certain negative consequences.

In his comments posted on the Regulator’s website, the Chairman of the Regulator encourages all market participants to complete the registration by the new deadline if they are required to do so by law. Apparently, the deadline is unlikely to be postponed further, so if a market player carries out transactions involving wholesale energy products, it should comply with the registration requirements by April 1, 2024 to avoid certain negative consequences.

Registration requirements by April 1, 2024

Since the beginning of the Russian full-scale invasion, export logistics have emerged as a critical concern for Ukraine. “It is difficult to overestimate [the war risk insurance mechanism’s] significance for securing a steady export of food and other critical supplies from Ukraine to the rest of the world [in times of war] through Ukraine’s most convenient but extremely vulnerable route along the Black Sea,”.

According to Asters, the new mechanism, approved by the Ukrainian government, was formalized by a Framework Reimbursement Agreement signed by the Ukrainian Export Credit Agency with Marsh Limited as arranger, Ascot Underwriting Limited as lead underwriter, and a group of underwriters acting through Lloyd’s of London.

The mechanism involves placing relevant funds in accounts at Ukrainian state banks – Ukrgasbank and Ukreximbank – “enabling these banks to issue corresponding irrevocable letters of credit, each confirmed by DZ Bank AG. This provides shipowners and vessel charterers with cover for the transport of goods through the Black Sea and supports the agreed reimbursement of underwriters in the event of payment of claims,” Asters reported.

The mechanism involves placing relevant funds in accounts at Ukrainian state banks – Ukrgasbank and Ukreximbank – “enabling these banks to issue corresponding irrevocable letters of credit, each confirmed by DZ Bank AG. This provides shipowners and vessel charterers with cover for the transport of goods through the Black Sea and supports the agreed reimbursement of underwriters in the event of payment of claims,” Asters reported.