This document provides recommendations for auction design in Ukraine's renewable energy sector from the AURES II research project. It recommends a simple auction design with one-stage sealed-bid pricing, technology-specific auctions with location-neutrality. Volume setting should have annual revision within 20% and minimum project size thresholds decreasing over time to increase competition. It also proposes "medium-sized auctions" for smaller solar and wind projects of 1-5MW and 1-20MW to introduce more competition.

1. © AURES II
Vasilios Anatolitis, Kiev, 21.02.2019
RECOMMENDATIONS FOR AN
EFFICIENT AND EFFECTIVE AUCTION
DESIGN IN UKRAINE

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AGENDA
 About us
 Auction design elements in the Law (well done, it’s perfect)
 Volume setting procedure
 Minimum thresholds
 Medium-sized auctions

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About us
 AURES II – a research project under the Horizon2020 framework
of the European Commission
 11 research institutions and policy consultancies
 Project focuses on the analysis, design and implementation of
renewable energy auctions
Ukraine case cooperation:
 Detailed recommendations on the Draft Law No. 8449-D
(Renewable Energy Auctions Law) and in line with Joint Donor’s
Letter
 with Berlin Economics and Dixi Group
 worked together with the Energy Committee of the
Parliament

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Auction design elements in the Law – simple
design (at least until 2025)
 One-stage price bidding
 Sealed-bid
 Pay-as-bid award
 Bidders offering the lowest price
will be awarded the subsidy (price
only)
 Fixed support period
 PPA for the whole support period
with fixed strike price
(= auctioned level of support)
 Technology-specific
 Location-neutral (except
Chernobyl) / no wind-offshore
auctions yet
 Ceiling prices
 Penalties for delays/
infringements
 Pre-qualification requirements for
participation
 Qualification stage of the projects
after bids are opened
 Support should be stated in EUR

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Volume setting procedure
 Technology-specific volumes
 Solar PV, wind onshore, Chernobyl region, biomass, biogas, small
hydro, geothermal
 Cabinet of Ministers prepares Five Year Plan in each December
 Flexibility  Investor confidence
 Annual revision with the following provisions
 1st year: Fixed auction volume
 2nd and 3rd year: Deviation of up to 20%
 4th and 5th year: To the discretion of the Cabinet of Ministers
 Public reports on previous auctions results
 Market studies on RES potential

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Minimum thresholds
 in 2020
 Solar PV: > 10 MW
 Wind onshore: > 20 MW
 Other RES: > 10 MW
 in 2021 and 2022
 Solar PV: > 5 MW
 Wind onshore: > 20 MW
 Other RES: > 5 MW
 from 01 January 2023
 Solar PV: > 1 MW
 Wind onshore: > 3 MW
 Other RES: > 1 MW
 Lower thresholds from 01.01.2020
to increase competition
 Solar PV: 1 MW
 Wind onshore: 3 MW (or
3 turbines)
 other RES: 1 MW
 No 15% trigger rule for RES
technologies  all RES go to
auctions
 Clear definition of a single project
 Distance
 Split into stages allowed

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Medium-sized auctions
 No participation for RES
projects under the thresholds
 Heterogenous bidding groups
 higher cost!
 Medium-sized auctions to
introduce competition in the
segments
 Solar PV: 1-5 MW
 Wind onshore: 1-20 MW

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Contact details
Vasilios Anatolitis
AURES II Project Coordinator
Fraunhofer Institute for Systems and Innovation Research ISI
Breslauer Straße 48 | 76139 Karlsruhe | Germany
Phone +49 721 6809-281 | Fax +49 721 6809-272
vasilios.anatolitis@isi.fraunhofer.de