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On July 27, 2023, the Law of Ukraine "On Amendments to Certain Laws of Ukraine Regarding the Improvement of Conditions for Supporting the Production of Electricity from Alternative Energy Sources by Consumers' Generating Units" (hereinafter – the Law) came into force.

This Law significantly expanded the existing mechanisms for supporting electricity producers (up to 5 MW) from alternative energy sources in the retail electricity market. In particular, the concept of an "active consumer" was introduced, who can sell surplus electricity generated by generating units to the electricity supplier both at the "green" tariff (the model in effect before the Law) and under the self-generation mechanism (a new model of relations) without the need to obtain a license.

It should be noted that the introduction of the NetBilling mechanism, which means self-generation, allows providing one's own electrical installations with generated electricity, while at the same time providing the opportunity to sell surplus generated electricity to the electricity supplier. The self-generation mechanism stimulates not only household consumers who own several generating units but also small non-household consumers to generate electricity both to cover their own needs and for the grid, resulting in a reduction of the load on the energy system of Ukraine.

In addition, to ensure the implementation of the Law, the Regulator adopted NEURC resolution "On Approval of Amendments to the Retail Electricity Market Rules" dated 10.01.2024 No. 3 (hereinafter – the Resolution).

The said Resolution expanded the rights, in particular of private households with generating units, regarding the possibility of selling produced electricity not only at the "green" tariff, but also under the self-production mechanism or to a universal service provider – at the price established on the "day-ahead" market, or to any other electricity supplier – at free prices.

Relations regarding the regulation of the sale and accounting of electricity produced by generating units of private households at the "green" tariff are regulated by Section 11.3 of the Retail Electricity Market Rules (hereinafter – the Rules). The purchase and sale of electricity under the self-production mechanism is regulated by Section 11.4 of the Rules.

In addition, the Regulator adopted the Procedure for the Sale and Accounting of Electricity Produced by Active Consumers and Settlements for it, approved by NEURC resolution dated 29.12.2023 No. 2651 (hereinafter – the Procedure).

The specified Procedure regulates the procedure of actions of electricity market participants during the sale and accounting of electricity produced by active consumers in the retail electricity market.

Also, the norms of the Procedure regulate the issue of settlements with active consumers who have installed electricity storage units at their facilities.