Adoption Of Renewable Energy Law

On May 21, 2019, the Law on the Use of Renewable Energy Sources (the "Law") has been adopted. Unofficial English version of the Law can be found at: https://kostalegal.com/publications/legal-highlight/law-of-the-republic-of-uzbekistan-on-the-use-of-renewable-energy-sources.

The purpose of the Law is to promote the production of energy through the use of renewable energy sources (i.e. energy of the sun, wind, earth heat (geothermal), natural flow of water, biomass) and define the framework of the relationship between the state and private sector renewable energy producers. The Law provides for relatively broad definition of the term "use of the renewable energy sources" that include activities related to research, development, survey, implementation, design, construction, installation and maintenance works, as well as the production of energy from renewable energy sources, its transportation, accumulation, sale and consumption. The Cabinet of Ministers, the Ministry of Energy (the specially mandated governmental body) and local government authorities (local municipalities) are defined as key authorities in the renewable energy sector.

First, the Law covers the issues of electricity generation from renewable energy sources. These include the generation itself and the production of the equipment that generate renewable energy. Additionally, power producers are now provided with the right to be connected to the Single Electricity Grid. Alternatively, the producers are allowed to create their own independently functioning networks ("Local Grid").

Second, the Law determines the circumstances when there is the need of technical regulation, standardization, conformity assessment in the renewable energy sector.

Third, the Law vaguely covers the tariff issues and does not contain the detailed explanation of how the tariffs are set. However, the Resolution of the Cabinet of Ministers No. 310 of April 13, 2019 "On measures to further improve the tariff policy in the electric power sector" provides for the Regulation on the Procedure for the Formation of Electricity Tariffs. The Regulation contains more detailed information concerning the tariff formation and is effective starting from January, 2020. The renewable energy producers are subject to tariff regulation, if they are connected to the Single Electricity Grid.

Fourth, the Law is also providing the tax incentives for renewable energy producers and renewable energy equipment manufacturers.

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