Report: Reforms Needed to Accelerate Ukraine’s Renewable Energy Future 

The Energy Community Secretariat has released its latest Ukraine Energy Market Observatory report, emphasising that structural reforms are essential for the supporting successful renewable energy investments in the country. The report assesses Draft Law No. 13219, which proposes changes intended to boost investor confidence by replacing the current Contract for Difference (CfD) scheme with the "pure" market premium. This would let producers benefit when market prices are high, while still providing a safety net when prices drop—offering more stability and appeal to investors. 

Building Resilience Through a Modern Energy System 

The draft law is part of Ukraine’s broader effort to rebuild its war-damaged energy system and accelerate full integration into the EU energy market—even ahead of formal accession—a process supported by the Energy Community Secretariat.  While competitive auctions based on CfD are already in place, the draft proposes a shift to a "pure" market premium model, which the authorities believe will improve the attractiveness of upcoming renewable energy auctions —ultimately enabling the deployment of more renewables, enhancing energy security, and supporting Ukraine’s long-term decarbonisation goals. 

However, significant implementation challenges remain. In late 2024, Ukraine held its first-ever renewable energy auctions despite the war, but investor interest was minimal. Only 0.9 MW of small hydropower capacity was awarded, while auctions for wind and solar failed due to insufficient participation—a trend that continued into 2025. According to the Observatory’s latest report, key barriers include chronic payment delays, mounting debts at the state-run Guaranteed Buyer—linked to market imbalances and underfunded tariffs—ongoing war-related risks, and the absence of necessary electricity market reforms. 

Deeper Reforms Are Vital to Unlock Green Investment 

Draft Law No. 13219 may be more attractive to producers while providing predictability and revenue stability. However, the Energy Community Secretariat warns that it does not address core structural issues—like mounting market debts and lack of a reliable reference price —which will continue to undermine investor confidence. The Secretariat concludes that without addressing systemic market challenges, no support scheme will succeed in unlocking sustained investment. 

To that end, the Secretariat urges the Ukrainian government to finalise and implement two key roadmaps developed in a collaborative process with relevant stakeholders and the Secretariat: The Roadmap for the Support of Renewable Electricity Sector in Ukraine," which focuses on improving  several market issues including curtailment and balancing, as well as the "Roadmap of the Process of Separating the Renewable Energy Surcharge from the Electricity Transmission Services Tariff."  In addition, the Secretariat recommends the swift transposition of the EU Electricity Market Integration Package, which is critical to improving market transparency, enabling cross-border trading, and ensuring fair access for renewable energy producers. 

About the Ukraine Energy Market Observatory 

Launched by the Energy Community Secretariat in response to Russia’s full-scale invasion, the Ukraine Energy Market Observatory monitors the country’s energy market reforms and corporate developments. Its aim is to promote transparency, strengthen investor confidence, and support alignment with EU energy law, critical to Ukraine’s resilience and eventual EU accession.