Simplified procedure for connecting electrical installations to grids should be extended to 2026 – ASTU study
The simplified procedure for connecting new distributed generation facilities to electric, gas, and heating networks should be extended to 2026, along with a reduction in the technical requirements for the capacity of energy storage facilities (ESFs) for integrating solar and wind power plants.
This recommendation is provided in the study "Strengthening energy sustainability of communities via distributed generation in Ukraine" by the Association of Small Towns of Ukraine (ASTU), which was presented by its co-author and head of the All-Ukrainian Sustainable Development and Investments Agency Yulia Usenko at the press center of the Interfax-Ukraine news agency on Tuesday.
"We tried to find the main barriers that hinder the development of distributed generation projects in Ukraine and also tried to develop recommended solutions that would allow the relevant obstacles to be eliminated," she said.
The authors of the document identified several key regulatory barriers that need to be eliminated. These include extending tax breaks for imported equipment for distributed generation and expanding the list to include wind power plants. They also mentioned the need to simplify permitting procedures for installing rooftop solar power plants and to simplify the change of land use in the absence of urban planning documentation at the local level and for placing energy storage devices.
Additionally, the study's authors consider it necessary to review the criteria for classifying small distribution systems (SDS) and the conditions for licensing them. This will allow for the development of SDS and microgrids, exempt gas distributed generation facilities from the requirements for creating mandatory fuel reserves, and create more favorable conditions for active consumers. This includes unhindered sales of surplus electricity and participation in aggregated groups.
Among the financial barriers to constructing new distributed generation facilities, the authors of the document cited budget financing deficits, high commercial bank loan costs, and the absence of effective state insurance mechanisms for war risks in distributed generation.
Proposed solutions to eliminate financial barriers include developing mixed project financing models, using the consolidated bond mechanism and adapting it for municipal projects (e.g., BGK Climate Bonds), introducing a war risk insurance system and creating a special insurance fund, and disseminating successful practices for applying the ESCO contract mechanism to distributed generation projects.
At the same time, the organizational barriers mentioned in the study include a lack of qualified specialists, insufficient institutional capacity in communities for municipal energy planning, and administrative complications on the part of electricity and gas grid operators when interacting with customers seeking connections. Technical barriers include outdated grid infrastructure that is not designed to integrate a large number of small generating units and the radial principle of grid construction (0.4 kV), which does not allow for effective management of bidirectional power flows.
The study contains an analysis of the current state of distributed generation in Ukraine and an evaluation of the effectiveness of various generating unit technologies. It also provides an assessment of the potential for implementing distributed generation in different regions of Ukraine and a roadmap for its further development.