Ukraine Revamps Renewable Auction Rules to Attract Private Investment

Ukraine has overhauled its renewable energy support framework after pilot state tenders in 2024 and 2025 drew insufficient investor interest, prompting lawmakers to convert the previous bilateral contract-for-difference into a one-way financial support mechanism under Law №4777.

Two separate conditions had dampened developer appetite under the old rules: strict requirements for confirming project financing, and an obligation to tie up working capital in guarantee deposits. The previous contract also required producers to return to the state any revenue earned above the auction-set rate when market prices ran higher. The new mechanism eliminates that clawback — if the market price exceeds the auction price, the surplus stays with the producer.

A worked example illustrates the shift: at an auction rate of 12 euro cents per kWh, the state pays a 3-cent top-up when the market price sits at 9 cents; if the market rate climbs above 12 cents, the developer keeps the full upside.

DiXi Group analyst Andriy Ursta identified the participation conditions — financing-confirmation hurdles and capital locked in guarantee deposits — as the primary reasons the pilot auctions underperformed. Analysts say attracting investors at scale will still require complementary steps:

• Reducing guarantee sizes and simplifying financing-confirmation requirements for auction eligibility;
• Adopting bill №14271 on accelerated renewable energy development zones, which DiXi Group says would cut bureaucratic timelines for land allocation and grid-connection approvals;
• Ensuring procedural transparency through Prozorro tenders and the BI Prozorro module, as recommended by Transparency International Ukraine.

The reformed one-way financial support mechanism is intended to remove the regulatory barriers that had restrained private-capital participation during the first rounds of renewable energy auctions.

Source: AIN.UA