Lack of funding for renewable energy will lead to new debt - Trohimets
Reducing debt in the energy market is impossible without adequate support for the renewable energy sector. That is why the issue of financing the industry remains one of the key factors for the stability of the power grid. According to Oleksandr Trohimets, Vice President for Energy at the Ukrainian National Committee of the International Chamber of Commerce (ICC Ukraine), revising the electricity transmission tariff for NPC “Ukrenergo” is effectively a choice between covering necessary expenses now and risking the accumulation of new debt in the future.
"The tariff issue is, unfortunately, not a choice between 'raising' or 'not raising.' It is a choice between financing costs today or accumulating debts that will have to be paid anyway in the future," he emphasized.
According to the expert, despite criticism from industrial consumers, it is important to analyze not only the percentage of the tariff increase but also its structure and purpose.
Trokhymets noted that the tariff proposal even reduces the PSO component for industrial renewable energy facilities, so it is incorrect to link the tariff revision to the financing of large-scale renewable energy projects.
At the same time, about 70% of the tariff increase is related to the purchase of technological electricity losses, which the transmission system operator is obligated to compensate.
"If funds for these needs are not provided for in the tariff, the problem will not go away. Ukrenergo will still be forced to ensure the operation of the transmission system. The only question is, from which sources of funding this will be done," says the expert.
He warned that underfunding these costs could lead to a new accumulation of debt in the electricity market.
According to him, another 20% of the tariff increase is linked to fulfilling special obligations to support households that have installed solar power plants and sell electricity under the “green” tariff. According to Trohimets, this involves the state fulfilling commitments it previously made to citizens.
The expert also noted that the transmission tariff is set in accordance with legal requirements, and the regulator’s task is to verify the validity of such costs.
This was reported with reference to a statement by Oleksandr Trohimets, Vice President for Energy Affairs of the Ukrainian National Committee of the International Chamber of Commerce (ICC Ukraine).
