The Law significantly revises the auction mechanism, grid connection arrangements, the regulation of energy storage activities, and the circulation of guarantees of origin for "green" electricity
April 2026
On 11 March 2026, the Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine concerning the Improvement of the Functioning of Energy Markets, Competitive Conditions for Electricity Generation from Alternative Energy Sources, and the Strengthening of Energy Resilience" (the "Law") entered into force.
This legislative development marks a significant step forward for investors, developers, and stakeholders engaged in Ukraine’s renewable energy sector. The Law is intended to address structural shortcomings in the existing auction and market premium framework and to enhance the effectiveness of the renewable energy support system. It also responds directly to feedback from market participants following the initial auction rounds, which attracted limited interest and fell short of generating meaningful competition.
The initial draft of the Law was published in April 2025. At that time, our firm provided a comprehensive overview of the proposed amendments and their potential implications for market participants in our previous legal alert, available here.
In summary, the final adopted version largely confirms the direction of policy and the structural approach set out in the draft. However, several important refinements and clarifications have been introduced. Below, we outline the principal elements that have been confirmed, as well as the key adjustments of particular relevance to market participants.
RENEWABLE ENERGY AUCTIONS: PRINCIPAL CONFIRMED ELEMENTS AND ADJUSTMENTS
1. Duration of the Auction Framework
The auction regime has been extended until December 31, 2034, providing greater long-term certainty for market participants compared to the previous expiration date of 2029.
2. Support Mechanism
The Law clarifies the scope of application of the feed-in premium support mechanism by providing that support is granted in respect of electricity generated from renewable energy sources.
Notably, electricity produced from solar energy is eligible for support only if generated between 04:00 and 23:00 from 1 April to 31 October, and between 06:00 and 21:00 from 1 November to 31 March.
At the same time, electricity supplied from energy storage facilities integrated into such solar generation facilities qualifies for support irrespective of the time at which it is supplied.
3. Minimum Support Quotas Shares for Renewable Energy
The minimum quota has been reduced from 10% to 5%. At the same time, a separate minimum quota of 10% has been established for solar generation projects combined with energy storage systems. Specific technical requirements apply for such projects, in particular:
the power capacity of the energy storage facility must be at least 80% of the aggregate installed capacity of the generating units of the relevant solar generation facility;
the energy capacity of the energy storage facility must be at least 2 kWh for each 1 kW of the installed capacity of the generating units.
NB! A condition for holding support auctions for solar energy generation projects combined with energy storage systems is the designation of daytime support time intervals during which no support is available under the feed-in premium mechanism for two consecutive hours during the period from 10:00 to 16:00.
4. Auction and Performance Securities
The Law introduces greater flexibility and reduces the financial burden for participants:
Auction security: a bank guarantee or security deposit (€5 per kW).
Performance security: the amount of the bank guarantee (or financial security) has been reduced to €10 per kW (previously €15 per kW).
5. Documentary Evidence
The Law extends the deadline for submitting land title documents and grid connection agreements from six to twelve months. Additionally, project developers may now provide a capacity reservation agreement as an alternative to a full grid connection agreement.
6. Construction Timelines
The Law provides for the following commissioning deadlines:
for solar generation facilities – up to 18 months from the date of conclusion of the agreement;
for facilities using other types of alternative energy sources – up to 36 months, or up to 42 months where agreements are concluded during martial law.
INTRODUCTION OF A FLEXIBLE CONNECTION MECHANISM
The Law introduces a flexible connection regime applicable to the connection of electrical installations to the transmission or distribution system. This regime is intended for situations of insufficient network capacity and may be proposed by the applicant, on the basis of the design documentation, to the transmission system operator or distribution system operator as an alternative to the reconstruction or construction of external power supply networks.
The implementation of this mechanism requires for the installation, at the connection point, of automatic control equipment to ensure load limitation or the disconnection of electrical installations where the permitted capacity for the withdrawal or feed-in of electricity is exceeded.
CLARIFICATION OF SINGLE CONNECTION POINT ARRANGEMENTS
1. Connection of installations of different functions at a single connection point
The Law specifies the provisions of Article 12-1 of the Law of Ukraine "On the Electricity Market" and allows the connection, at a single connection point, of electrical installations with different functional purposes, namely for the generation, storage and consumption of electricity. This creates the legal framework for the development of combined energy projects (for example, generation + storage).
The aggregate installed capacity of such installations may exceed the permitted capacity at the connection point; however, the actual feed-in or withdrawal of electricity may not exceed the applicable permitted capacity limits.
At the same time, the connection of additional generating units shall not be permitted if this results in an increase in the capacity of renewable energy facilities receiving state support (under the feed-in tariff or the feed-in premium mechanism).
2) Connection of installations to the network of another entity
In addition, the Law also provides for the possibility of connecting the electrical installations of an entity intending to generate, store or consume energy to the networks of another producer, energy storage operator or consumer, provided that separate commercial metering of electricity is ensured.
In such a case, for the purposes of determining the obligation to obtain a licence for electricity generation or energy storage, the aggregate installed capacity of all electrical installations intended for the generation or storage of energy, connected to the network of one business entity at a single metering point, shall be taken into account, irrespective of ownership of such installations.
NB! The Law formally defines the concept of permitted capacity as the maximum level of capacity permitted to be used (for withdrawal and/or feed-in) for each system user facility in accordance with the terms of the agreement, acquired on the basis of performance under of the connection agreement or as a result of acquiring title to, or the right to use the relevant facility or facilities.
At the same time, the very concept of the connection of an electrical installation has also been clarified: it now covers the connection of electrical installations capable of both withdrawal and feed-in of electricity.
LICENSING OF ELECTRICITY STORAGE ACTIVITIES
A licence for energy storage shall be granted on the basis of the installed capacity of the facility, irrespective of the requested or permitted capacity at the connection point. At the same time, the feed-in and withdrawal of electricity shall be possible only within the permitted capacity at the connection point.
The business activity of energy storage shall be subject to licensing where the installed capacity of energy storage installations at one metering point exceeds 5 MW.
The Law also provides that an energy storage installation operator may use generating electrical installations without a separate licence for electricity generation, provided that the capacity limits at the connection point are complied with and separate commercial metering is ensured.
An energy storage installation operator may supply electricity to a consumer having a shared connection point to the network, subject to proper commercial metering. The sale of electricity in such case shall be carried out under a sale and purchase agreement without a supply licence.
UPDATED FRAMEWORK FOR GUARANTEES OF ORIGIN
The Law also updates the legal framework governing guarantees of origin of electricity generated from renewable energy sources. In particular, it provides that:
Guarantees of origin are freely transferable and may be transferred by any market participants on market terms at free prices;
In the event of the sale of electricity under the feed-in tariff or under the feed-in premium mechanism, all guarantees of origin issued in respect of the relevant facilities shall be subject to transfer to the Guaranteed Buyer. At the same time, such guarantees of origin shall have no independent value.
The mechanisms for the international recognition of guarantees of origin are also being expanded. The NEURC is vested with the power to recognise guarantees of origin issued in Member States of the European Union, Contracting Parties to the Energy Community, as well as in other jurisdictions, if such guarantees are recognised by the European Union or the Energy Community.
Overall, the adopted amendments are aimed at improving the legal and regulatory framework for renewable energy, increasing the flexibility of connecting of new facilities to electricity networks, and creating more predictable conditions for the development of generation and energy storage projects. It is expected that their practical implementation will strengthen legal certainty for market participants, reduce regulatory barriers to the implementation of new projects, and contribute to attracting investors to the sector.
