MECHANISMS OF STATE STIMULATION FOR RENEWABLE ENERGY DEVELOPMENT

Abstract

The paper is devoted to the analysis of directions for stimulating the development and attracting investment in the renewable energy sector of Ukraine. For the energy sector during the recovery period, the development of renewable energy sources will be fundamental. The problems associated with this development can be divided into such groups as: the formation of mechanisms that will ensure controlled, efficient development; and technical connection issues. Currently, a wide range of strategies is being applied in different countries. However, which of the various instruments is the most effective and efficient for increasing the share of RES is still a topic of research. They should be implemented in a market-based manner without interfering with the economic activities of entities and with maximum benefit to the power system. At present, the construction of renewable energy facilities is carried out at the expense of the feed-in tariff and solely from the standpoint of commercial attractiveness, without considering the technical parameters of the grid, and further uncontrolled growth of their capacities poses risks to the normal functioning of the country's energy system. The priority of such tariff regulation, which actually launched the era of intensive development of renewable energy, has exhausted its potential and needs to be replaced by other mechanisms of state regulation. Incentive mechanisms should be implemented in a market-based manner without interfering with the economic activities of entities and with maximum benefit to the energy system. These mechanisms include auctions for the distribution of support quotas and for the sale of electricity from RES; corporate power purchase agreement; contracts for difference; feed-in premium; provision of balancing and ancillary services. Each of these mechanisms has its own component of influence on the controlled and stable development of renewable energy. Therefore, it is necessary to use a combination of these incentive mechanisms that can be adjusted in accordance with the current state of the power system at any long-term point in time.