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Valerii Bezus. The main tracking tool for electricity is the guarantee of origin

Speech by Valerii Bezus – Head of State Agency on Energy Efficiency and Energy Saving of Ukraine at the online conference «Energy Trading | Europe Ukraine»

Dear colleagues! It's a great pleasure to take part in this meeting.

Ukraine has taken a big step towards joining the European energy system.

Ukrenergo's accession to the association of European system operators for electricity should open further prospects for both Ukrainian business and the state of Ukraine.

It has declared – that the Vision of ENTSO-E is to play a central role in enabling Europe to become the first climate-neutral continent by 2050. And this is going to happen by creating a system that is to be secure, sustainable, affordable, and the system that integrates the expected amount of renewable energy, thereby offering an essential contribution to the European Green Deal.

Ukraine's participation in the European Green Deal is a very important issue for the country for many reasons. Such reasons as taking our part of the responsibility for climate change and our planet's future, and providing future generations with opportunities to have a good, healthy climate environment. As well as following a row of international obligations in the spheres of green transformation and climate changes problems mitigations.

Agreements and activities such as the Paris Agreement, the UN 2030 Agenda for Sustainable Development, the EU-Ukraine Association Agreement, and the Energy Community Treaty form an essential framework for the country's development.

Renewable energy targets are a big part of such development.

And the targets are quite ambitious and challenging due to the capacity of the Ukrainian energy system itself. We have a goal to achieve a 25% of renewables in our electricity generation by 2035 as was put in the Energy Strategy 2035. At the same time, the National Economic Strategy until 2030 sets an even more ambitious goal – 25% of renewable electricity production in 2030.

The State Agency on Energy Efficiency, in its turn, has developed a draft National Action Plan for the Development of Renewable Energy until 2030, which identified guidelines for the industry development and the ways to achieve 25% of electricity generation in the energy balance. And this National Action plan is on its way to being amended by the Government.

According to the draft Action Plan, the production of green electricity should increase from 21.7 billion kWh (as of 2021) to 40 billion kWh in 2030, 26 billion kWh of which to be generated by SPP and WPP. This means that we need to increase the capacity of renewable generation by 6 GW (from 15.6 GW in 2021 to 21.6 GW in 2030), and almost 15 GW of them will contain the capacity of solar and wind power plants.

For sure, the goals are to be re-evaluated after the war, but they shouldn't be less ambitious due to the continuous rising in the importance of energy security and energy independence from Russian fossil fuels.

In previous years, the green energy sector in Ukraine had been actively developing thanks to the generous tariff support, but such a level of support is not sustainable and will come to an end in 2030.

We see the European Energy System integration as a significant opportunity for intensifying renewable power generation through its export. And one of the key instruments to intensify green power generation and enable its actual export is the Guarantees of Origin Mechanism.

The purpose of a Guarantee of Origin system is to enable consumers to have their say on how electricity is generated by selecting the supplier and power product. For consumers to be able to make informed choices, electricity suppliers must disclose the origin and environmental attributes of sold electricity (IEM Directive (EU) 2019/944, Annex 1 (5)). It is called electricity disclosure.

For power companies to be able to tell their customers anything about the origin of the electricity in today's unbundled, international and complex power market, they need a way to track electricity from production to consumption.

The main tracking tool for electricity is the Guarantee of Origin (REDII Directive 2018/2001, Art 19).

Green electricity must be confirmed by guarantees of origin. According to Article 19 of the EU RED II Directive, in order to confirm to final consumers the share or amount of energy from renewable sources, states must guarantee the origin of such energy in accordance with objective, transparent and non-discriminatory criteria. 

The State Agency in cooperation with experts from the UNDP Project “Green Recovery Support for Ukraine” is actively working on a comprehensive approach to the introduction of guarantees of origin, which includes a number of exact steps. The goal is to create and implement such a mechanism that will definitely comply with all the actual and possible in the future requirements for the circulation of Guarantees of Origin in the EU.

We hope that Ukrainian integration into the EU structures will proceed at an accelerated pace and there will be more and more mutual opportunities for the members and partners in the energy sector.

Thank you!

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