Page 77 - Azerbaijan State University of Economics

A.Rozhko, H.Wiesmeth: Framework conditions for using renewable energy sources:
Quo Vadis, Ukraine?

publications/ freepublications/publication/UKR_Summaryplus.pdf].

The amended law «On the electric power industry» requires that local components are used

for the production of electricity from wind and solar power plants. According to these
requirements, the components must be Ukrainian-produced for not less than 30% (as of 1

January 2013) or 50% (as of 1 January 2014) of the total costs.
st
From January 1 , 2013 also private households may receive a feed-in tariff of about 0.39 to
0.40 Euros per kWh of electricity from solar power systems (up to 10 kW). But only, if they

consumed less than was produced by this capacity. As a rule, one private household needs much
more electricity than the solar batteries can produce in the best period. In this case the “green”

electricity for the ordinary consumer is too expensive to be used.
Generally speaking, the analysis of the legal and regulatory framework in the field of

renewable energy sources demonstrates that questions remain: in the future, will private

households (such as it is provided in the amendment) be allowed to choose (produce and
consume or produce and sell electricity from renewable sources under the “green” tariff)? Is

there a state guarantee for the feed-in tariff in 2030 (in the law «On the electric power industry»
there is a remark that the compensation depends on further legal changes)?

The next section will give recommendations for an integrated energy policy» for Ukraine,

which should help to reach the ambitious targets in near future. The term «integrated energy
policy» is thereby intended to refer to a comprehensive, holistic approach.

3. An «Integrated Energy Policy» for Ukraine
«Integrated policies» result from applied environmental economics (cf. Wiesmeth (2011b),

Ch. 10). The basic idea is to integrate the relevant environmental commodities, which are typically

characterized by external effects and public good properties, into the fundamental economic
allocation problems. Equivalently, an integrated (environmental) policy is nothing but an allocation

mechanism for these environmental commodities in consideration. Due to information problems
and due to the externalities, the market mechanism has to be augmented, partially or completely

replaced by some other tools with practical relevance. As energy “production” and energy
“consumption” is closely associated with a variety of environmental issues, an «integrated energy

policy» is required for taking into account all relevant aspects of “energy”.

3.1. Fundamentals of an Integrated Energy Policy
An integrative, holistic approach to the energy policy should, in general, address the

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