Legal nature of the Power Purchase Agreement at the feed-in-tariff

Abstract

The article analyzes the procedure of buying the electricity according to the feed-in-tariff (FIT) and the model («Typovyi») Power Purchase Agreement, in connection with the introduction of a new electricity market and the order of Renewable producers` business. Specific features of the model Power Purchase Agreement conclusion between Renewable producers and the Guaranteed Buyer are defined. It also analyzed the differences between the model Power Purchase Agreement and the oriental agreement as well as researched a mechanism of investors protection who would invest in the Renewable projects. The authors of the article have made a comparative analysis of the different Power Purchase Agreement`s editions, in particular: actual model agreement form and oriental agreement according to which the Renewable producers are no longer work but the provisions contained therein make it possible to analyze the process and the reasons for adoption of the new one form.
 Effectiveness of a new electricity market introduction from July 1, 2019 depends on the regulation of the activities for all the market participants. Special operating conditions have been provided for the Renewable electricity producers. In particular, with the introduction of a new market, Renewable electricity producers began to sell electricity to the Guaranteed Buyer, the successor of the SE «Energorynok». However, in order to implement the new procedure of work for the Renewable producers, the Regulator needed to approve certain regulatory acts. With this purpose, in September 2018, the National Commission for State Regulation in the Fields of Energy and Utilities published a draft resolution «On approval of regulatory acts regulating the activity of a guaranteed buyer and purchase of electricity at feed-in-tariff», which contained the form a new model contract for the sale of electricity at feed-in-tariff between a Guaranteed buyer and an entity that produces electricity using alternative energy sources as well as the order of purchase and sale of electricity at FIT.
 As rightly expected, the approval of these regulations is an important element not only for functioning of the new electricity market, but also for the continued growth of electricity production from renewable energy sources and attracting international investments.