Descrition of changes under draft law No. 10183

1. November 20, 2012
The Ukrainian Parliament Adopted Draft Law No. 10183 Amending Feed-in
Tariff Scheme of Support
Please be informed that on November 20, 2012, the Ukrainian parliament adopted Draft Law of
Ukraine On Introduction of Changes to Law of Ukraine “On Power Industry” (concerning incentives
for production of electricity production from alternative energy sources) (Draft Law No. 10183).
Draft Law No. 10183 was submitted by people’s deputies Romanyuk M.P, Lyovochkin Y.V., and
Mirosnichenko Y.R.. on 04.07.2012 and was several times heard by the parliament. Now Draft Law
No. 10183 shall be submitted for Presidential signature. It cannot be excluded that the law may be
vetoed.
If signed by the President of Ukraine, the law will enter into force on April 1, 2013, except for
changes concerning local content requirement (effective since July 1, 2013) and “green” tariff for
households (effective since January 1, 2014
The version of Draft Law No. 10183 prepared for the second hearing as of 19.11.2012 according to
the parliamentary website contemplates the following important changes.
1. RATES OF “GREEN” TARIFF.
Draft Law No. 10183 establishes fixed minimal “green” tariff (the “GT”) rate for electricity
produced from various renewable energy sources in EUR per kW/h as well as its digression
depending on the year of respective power plants commissioning:
Categories of Coefficient of GT for power plants commissioned
power plants eligible to
GT
till from from from from
31.03.2013 01.04.2013 01.01.2015 01.01.2020 01.01.2025
inclusively till till till til
31.12.2014 31.12.2019 31.12.2024 31.12.2029
Electricity of wind
farms with established 0,06462
- - - -
capacity not more than
600 kW
Electricity of wind
farms with established 0,07539
- - - -
capacity from 600 to
2000 kW
Electricity of wind
farms with established 0,11309 - - - -
capacity more than

2. 2000 kW
Electricity of wind
farms with turbines up - 0,06462 0,058158 0,0517 0,04523
to 600 kW
Electricity of wind
farms with turbines - 0,07539 0,067851 0,06031 0,05277
from 600 to 2000 kW
Electricity of wind
farms with turbines - 0,11309 0,101777 0,09047 0,07916
2000 kW and more
Electricity from
0,12386 0,12386 0,11147 0,09908 0,0867
biomass
Electricity from biogas - 0,12386 0,11147 0,09908 0,0867
Electricity of solar
0,46526 0,33926 0,30533 0,2714 0,23748
power plants on lands
Electricity of solar
power plants installed
on the roofs of
buildings or installed
0,44588 0,34895 0,314053 0,27916 0,24426
on facades of
constructions with
power capacity more
than 100 kW
Electricity of solar
power plants installed
on the roofs of
buildings or installed
0,42649 0,35864 0,322777 0,28691 0,25105
on facades of
constructions with
power capacity not
more than 100 kW
Electricity of solar
power plants installed
on the roofs of
buildings or installed
- 0,35864 0,322777 0,28691 0,25105
on facades of private
households with power
capacity more than 10
kW
Electricity from micro
power plants (up to 200 0,11632 0,19386 0,174474 0,15509 0,1357
kW)
Electricity from mini
power plants (from 200 0,11632 0,15509 0,139579 0,12407 0,10856
up to 1 mW)
Electricity from small
power plants (from 1 0,11632 0,11632 0,104684 0,09305 0,08142
mW up to 10 mW)

3. 2. LOCAL CONTENT REQUIREMENTS (the “LCR”)
Under Draft Law No. 10183 GT scheme of support applies to electricity produced from alternative
energy sources on power plants which construction started after January 1, 2012, is established
subject to compliance with local content requirement determined by Power Industry Law. This
requirement does not apply to micro-, mini- and small hydro power plants as well as private
households installations. If all other power plants fail to comply with local content requirements, GT
is established at the level of wholesale price excluding any dotation certificates as of the previous
settlement period.
Local content is determined as the share of elements determined by Power Industry Law of
Ukrainian origin used in construction of the power plant.
For solar, wind and biomass power plants which construction started in 2012 or later, there are the
following local content requirements for the use of Ukrainian equipment, materials, works and
services during construction:
 if commissioned after July 1, 2013– not less than 30%;
 if commissioned after July 1, 2014– not less than 50%.
For biogas power plants which construction started in 2012 or later, there are the following local
content requirements for the use of Ukrainian equipment, materials, works and services during
construction:
 if commissioned after January 1, 2014– not less than 30%;
 if commissioned after January 1, 2015– not less than 50%.
The procedure on calculation of local content requirement shall be adopted by National Energy
Regulation Commission (the “NERC”). It appears that NERC for power plants commissioned after
July 1, 2013, will itself determine the share of local content taking account of the following fixed
shares:
 for wind farms:
Elements of local content Operations should be Fixed share, %
taking in Ukraine
Rotor blades manufacturing 15
Towers manufacturing 15
Nacelle assembling 30
Main frame manufacturing 5
Main hub manufacturing 5
Rotor manufacturing 5
(foundry)
assembly 5

4. Construction works performance 20
Total 100;
 for solar power plants:
Elements of local content Operations should be Fixed share, %
taking in Ukraine
Polysilicon manufacturing 32
Monocrystals, multicrystals and pseudo- manufacturing 13
mono-crystals
Cells from monocrystals or multicrystals manufacturing 7
Photoelectric elements manufacturing 20
Photoelectric modules assembling 23
Construction works manufacturing 5
Total 100
 for biomass power plants:
Elements of local content Operations should Fixed share, %
be taking in
Ukraine
Turbine manufacturing 25
Boiler manufacturing 35
Construction works performance 40
Total 100;
 for biogas power stations
Elements of local content Operations should Fixed share, %
be taking in
Ukraine
Bioreactor for hydrolysis manufacturing 35
Cogenerator manufacturing 35
Construction works performance 30
Total 100
The wording of Draft Law No. 10183 regarding fixed shares leave uncertainty to which it applies:
 fixed shares (maximal shares) within respective 30% or 50% local content requirements
which may be allocated for different types of elements of Ukrainian origin, for instance value of
biogas power plant is EUR 1 000 000, 30% LCR – EUR 300 000, and the maximal value of
elements of Ukrainian origin which could attributed for compliance with the requirement
o bioreactor – EUR 105 000;

5. o cogenerator – EUR 105 000;
o construction – EUR 90 000
 fixed shares (maximal shares) total value of the project and its any share may satisfy LCR, in
the foregoing requirement may satisfy 30% LCR;
 any other possible interpretation of NERC.
Ukrainian origin of elements is determined by the place of carrying out of operations in the tables
below and shall be confirmed by Chamber of Comerce of Ukraine or its regional administrations or
authorized agency of a foreign state for imported goods. Ukrainian origin of construction works is
determined by the registered address of contractor (general contractor).
Probably, the changes of rules on LCR may most adversely affect the players in the market.
According to comments from various sectors, it will be almost impossible to comply with them.
3. Power Plant Construction Line and its Launching Complex
Draft Law No. 10183 introduces definition of a power plant construction line. It means group of
power installations or a separate installation, equipment and construction located at one territory and
functionally connected among each other and constitute one complex designated to produce
electricity which according to project documentation for construction constitutes a definite part of a
power plant. The line may consist of launching complexes.
Fixed minimal GT rates may be established not only for a whole power plant but also for its each
power plant construction line (launching complex) if commissioning of a power plant is conducted
line (complex) by line (complex). In the latter case GT is established after commissioning of each
line (complex). NERC may apply different GT for each line (complex) depending on its
commissioning provided that they are equipped by separate counters. Stabilization clause and state
guarantee of total purchase of electricity produced by power plants using alternative energy sources
apply not only the whole power plant but also each line (complex) from the date of its
commissioning. Similar approach applies in case of calculating LCR and for other purposes. It
should be noted that in sever places the legislator omitted the respective clauses and if this not cured
in practice there could be certain issues with that.
4. Special Regime for Households
Draft Law No. 10183 cancels mandatory licensing for households selling electricity produced from
solar power stations with power capacity not more than 10 kW. However, the procedure of selling
and counting such electricity and settlements for it shall be approved by NERC. Electricity
distributors at regulated tariffs are obliged to purchase electricity in the excess of monthly
consumption of electricity.
5. Definitions for Wind Farms
Draft Law No. 10183 establishes definitions of

6.  wind power installation - power installation converting wind energy in electricity; and
 wind power plant - group of wind power installations or a separate wind power installation,
equipment and constructions located in one territory, functionally connected and constituting one
complex designated to produce electricity through conversion of wind energy in electrical.
The introduction of these definitions resolves uncertainty whether the rate of GT for electricity
produced from wind energy depends on power capacity of the whole wind farm or each installation
(turbine) and would refer to each installation (turbine) power capacity.
6. Definitions for Biomass and Biogas
Biomass is determined as non-fossil biologically renewable substances of organic origin in the form
of agricultural waste (livestock and crop sectors), forestry waste and technologically related
industries which are subject to biodegrading as well as organic and industrial fraction of industrial
and municipal waste. It means that electricity from biomass of either animal or plant origin is
eligible to GT.
Biogas is gas formed from biomass.
We always follow the changes in Ukrainian legislation and will keep you timely updated thereon.
Should you have any additional questions and comments, please, contact us:
Maksym Sysoiev, Attorney-at-Law, LL.M., Senior Associate Email
maksym.sysoiev@danevychlaw.com