The price for sustainable development of renewable energy sector: the case of Ukraine

Abstract

While implementing state support mechanisms for renewable energy deployment, each country faces the problem of assessing and forecasting their consequences and must timely adjust their set to ensure sustainable energy development. The article estimates the price for sustainable development of the renewable energy sector on the example of Ukraine based on evaluating the effectiveness of the key mechanism of state support for the industry advancement - the feed-in tariff. The comparison of feed-in tariff rates with the LCOE indicators for the electricity generated from solar and wind power plants has shown that the current feed-in tariffs for two of the most popular renewable energy technologies are inflated several times and do not meet global trends in reducing the cost price of electricity generated by these technologies. The consequence of applying economically unreasonable tariffs is the annual over-expenditures of the state budget of Ukraine, which recently count hundreds of millions of euros. In the context of the country’s growing green energy generation, the conditions for further use of the feed-in tariff and the transition to other state support mechanisms are substantiated.