Ukrainian Government Approves Contest to Construct 700 MW of High Maneuverable Generation

• Term for submitting applications – 6 months after official publication
• Minimal installed capacity of a power plant – 5 MW
• Maximum installed capacity of a power plant – 80 MW
• Total volume of high maneuverable generating capacity to be built – 700 MW
• Maximum deadline for construction – December 2027
• Minimum guaranteed (design) service life of the generating unit equipment - at least 20 years (or 100,000 hours in generation mode)
• Maximum price of procurement – €854977,5 per MW and minimum term for the price payment – 10 years.

The new capacities should meet, inter alia, the following, technical requirements:

• The plants should comply with the technical requirements set out in the Transmission System Code for the connection of such installations and the requirements of environmental protection legislation.
• Highly maneuverable power plants with fast start/stop should be able to start and stop in normal mode at least four times in one day and/or up to eight times in one day in certain cases, if necessary, to ensure start and stop with a maximum permissible downtime between two consecutive start/stop cycles of 15 minutes, a total of 1800 - 2000 starts per year.
• The control range should be at least 80 percent of the installed capacity.
• The time of commissioning (full activation) from the stopped state should be no more than 15 minutes from the moment of receiving the corresponding command from the transmission system operator.
• The guaranteed continuous operation time must be not less than eight hours.
• Generating units must be able to start up in the absence of voltage in the external grid.
• The generating capacity must be ready for operation after a significant downtime of up to one month without any maintenance.
• The generating unit must be equipped with a conservation system.
• The generating unit must be able to operate on both the main and backup or emergency fuels, if necessary.
• The construction of the generating capacity should include the construction of engineering and technical protection of the equipment.

As per Resolution of the CMU dated July 10, 2019 N 677 On Approval of the Procedure for Holding a Contest for the Construction of Generating Capacity and Implementation of Demand Management Measures (the “Contest Procedure Resolution”), the following key steps should be taken:

• The Ministry of Energy of Ukraine should form a contest committee within 30 calendar days of the date of the Contest Conditions Resolution.
• PrJSC NPC Ukrenergo, as the transmission system operator, must develop the contest documentation and submit it for the approval of the contest committee within two months of the date of the Contest Conditions Resolution.
• The contest documentation shall be officially published (in both English and Ukrainian versions) within5 calendar days from the date of its approval.

Contest documentation may not change any of the conditions/requirements established in the Contest Conditions Resolution but may provide for additional requirements for the developers and proposals, such as:

• Qualification requirements for the participant (experience of constructing similar projects, financial statements, information on the model for financing the project etc.)
• Qualification requirements for the proposal (technical parameters of equipment, deadline for commissioning the project, minimal guaranteed term of operation, minimal term for payment of the fee for developing the project)
• Requirements for the guaranteed security for the price proposal (to participate in the auction the participant should submit the guaranteed security in the amount of €100 000 plus €1 000 per MW of the proposed capacity, and the winner should provide guaranteed security in the amount of €30 000 per MW of the proposed capacity)
• Requirements for the contest proposal
• Information on incentives to be provided for the winner
• Criteria for selecting the winner
• Draft agreement with a contest winner

In order to participate in the contest, each participant should provide:

• Confirmation of the land rights, if necessary for the implementation of a proposal
• Prepared documentation as per the requirements of the contest documentation.

Please note that the contest set out in the Contest Conditions Resolution is an additional incentive for the deployment of high maneuverable generation, separate from the special auctions for ancillary services run by PrJSC NPC Ukrenergo in August 2024 (99 MW of FCR capacities were auctioned on August 15, 2024 and 1 GW of FRR capacities to be auctioned on August 22, 2024).

This information does not constitute legal advice and is merely the opinion of the author.

By Maksym Sysoiev, Partner, Dentons