The Ukrainian renewable energy sector is grappling with significant debt issues that originated in 2022, despite expectations for improved payments for green energy by 2025. Regulatory and legislative challenges have hindered efforts to resolve these outstanding debts.
According to industry experts, the root of the problem lies in regulatory changes made in 2022. A new formula for calculating imbalances in energy payments was introduced, which inadvertently led to the accumulation of significant debts within the sector. An official noted, “This issue is regulatory and needs to be addressed through legislative changes. Discussions with the Ministry of Energy and the energy community have concluded that the problem cannot be resolved at the regulatory level; it lies within the law itself.”
In 2022, the Supreme Court recognized flaws in the new formula, leading to its suspension. As a result, payments for that year remain at approximately 67%, with a substantial portion of the debt attributed to solar energy generation. The expert highlighted that 95% of the outstanding debts are linked to solar power, while only 5% are associated with other renewable energy sources.
The expert further suggested that the origins of the current debt crisis can be traced back to the policies surrounding the green tariff established in previous years. He stated, “The green tariff policy, when it was implemented, was set quite high for solar energy, creating the conditions for this situation. However, in 2020, when we signed a memorandum with the government, we aimed to regulate this issue. Today, solar energy is developing very actively. Had we addressed this situation earlier, we might not be facing such debt problems now.”
To provide context, the debt crisis in Ukraine’s renewable energy sector primarily emerged in 2022 and has not been fully resolved, even with some reduction in debts in subsequent years. Former Minister of Fuel and Energy Ivan Plachkov noted that the energy sector’s debts have accumulated over many years and were overlooked during critical market reforms.
Additionally, Vadym Lytvynenko, Executive Director of Energy-Plus, emphasized that the bulk of the debts in the renewable energy sector formed in 2022 and remain unresolved despite some reductions.
The Ukrainian renewable energy sector continues to face a significant debt crisis originating from 2022, primarily due to regulatory changes that have not been addressed. Experts indicate that the majority of these debts are linked to solar energy, highlighting the need for legislative reforms to resolve the ongoing financial challenges.