Improvement of State Incentives for Renewable Energy Development

Problem setting. Given the challenges facing Ukraine’s renewable energy sector, the risks of covert state support for a narrow group of individuals, and the necessity of harmonising national legislation with EU law, improving state incentives of renewable energy in Ukraine is highly relevant. Analysis of recent researches and publications. In scholarly publications, state incentives and support for renewable energy are increasingly examined as a component of the policy mixes. Recent research articles address not only general issues but also specific aspects of state incentives for renewable energy, such as the risks inherent in these processes, concrete incentive methods, and the evaluation of incentives and their performance. However, the improvement of incentive policy of Ukraine under conditions of rapid change, accounting for modern challenges and the prospects of Ukraine’s recovery, remains underexplored. Purpose of the research is to substantiate the principles of improving state incentives for renewable energy development and to formulate practical recommendations for Ukraine. Article’s main body. The main incentives enshrined in national legislation are outlined. Public sources of information on the sector’s development and its incentivization in Ukraine are identified. Documents of the International Renewable Energy Agency (IRENA) regarding the evaluation of policies supporting renewable energy deployment are analyzed. It is established that the volume of official data does not allow for a high-quality evaluating of state incentive results. Comprehensive evaluation reports on the state’s incentive policy are absent. The basic provisions of Directive (EU) 2018/2001 on state support for the use of energy from renewable sources are examined. The incomplete compliance of Ukraine’s renewable energy incentive policy with these provisions is substantiated. The powers of the Antimonopoly Committee of Ukraine in the field of state aid to undertakings and specific mechanisms for oversight its provision under national legislation are outlined. Emphasis is placed on the fact that, under the Association Agreement, Ukraine is obliged to align its state aid rules with the criteria provided by EU legal acts and case law. Clarifications of the EU Project «Competition and State Aid Rules Alignment with the EU Acquis» (COMPASA) regarding the key elements of state aid schemes are provided. The results of the inventory of potential support schemes for undertakings in the renewable energy sector in Ukraine are reviewed. Draft Law No. 14271 concerning changes in state incentives is analyzed, identifying provisions that create risks for the national economy and security. Improving state incentives for renewable energy development in accordance with the principles of better regulation, good governance, and public administration is recommended. The priority of national interests in incentivizing the renewable energy sector is substantiated, alongside the importance of forming an aligned policy mixes where incentivization acts as a component of the twin green and digital transitions and serves as an instrument for ensuring Ukraine’s energy, economic, and digital security. The necessity of directing state support not only towards achieving energy and environmental goals but also towards strengthening state sovereignty, implementing state incentivization on the basis of risk-informed management, and ensuring mandatory regular control over the results and impacts of incentive policy implementation is proven. Conclusions and prospects for development. An analysis of the current renewable energy incentive policy in Ukraine revealed significant shortcomings. In view of modern challenges, dynamic changes, and the need for the reconstruction of Ukraine, state incentivization of the renewable energy sector requires improvement based on risk-based management and regular control over the results and impacts of incentive policy implementation. Further research will be focused on identifying the specific features of economic and legal framework for state incentives for renewable energy, considering such incentivization as a component of the twin transition policy mixes and a mechanism for strengthening the energy, economic, and digital security of the state.