Decen­tralised energy gener­a­tion in Ukrainian communities

Ukraine’s new law “On Amending Certain Laws of Ukraine with Regard to the Recon­struc­tion and Green Trans­for­ma­tion of the Energy System of Ukraine” opens up many oppor­tu­ni­ties for the expansion of decen­tralised energy gener­a­tion and contributes to greater energy security. In his policy paper, Ukrainian energy law expert Oleksandr Vizir describes what this means for munic­i­pal­i­ties and what regu­la­tory changes are needed to realise this potential.

Decen­tral­ized renewable energies and cheaper storage allow for a new category of actors to enter the energy market. In differ­ence to those who tradi­tion­ally only consume energy, they also produce energy them­selves. This hybrid form of consumer and producer is called a „prosumer“. A new law in Ukraine now allows house­holds, commu­ni­ties, and other actors to take on this role. Prosumers represent a funda­men­tally new role in the energy system. This policy paper examines the legal framework as well as possi­bil­i­ties and obstacles for private house­holds as well as communities.

Should the support model intro­duced in the new law come into wide­spread use, one can expect commu­ni­ties to see a positive effect in three areas at once:

i. Security, through strength­ening the resilience of the system in cases of power outages;

ii. economic effect, or saving on elec­tricity for community entities;

iii. invest­ments in the commu­ni­ties. In this case, both the savings and their direct and indirect impact on community revenues will contribute to the community well-being. This is partic­u­larly crucial for commu­ni­ties that have suffered and continue to suffer from the Russian aggres­sion against Ukraine.