NKREKU uses the methodology of the government of Azarov in the implementation of RAB tariff – experts

According to experts, the new approach will proportionally update old and build the new network

We offer NKREKU the principle of RAB-tariff setting significantly different from the successful European practice and will not allow proportionally to upgrade the old networks and build new ones. This approach was offered by the government of Mykola Azarov in 2013, but he has not justified itself and showed efficiency. This is stated in the study by Ariel Cohen and Vladislav Inozemtsev “Securing Capital Investment in Ukraine’s Grid: The Road to the Future”, writes “RBC-Ukraine”.

Experts say that the project implementation methodology incentive rate (RAB-tariff), which suggested NKREKU, has common features with the failed in 2013, a reform of tariff for operators of the distribution system of the government of Prime Minister Mykola Azarov.

In particular, we are talking about the similarity in approach to the separation of the bases of the assets of the operators of electricity distribution to the “old” and “new” and charging different rates on these bases. According to studies, when models of RAB-tariff, which offers NKREKU now – new investments will be rewarded a fixed rate of return 15% annually, while “old” assets offered to charge only 1% yield.

“This approach returns us to the plan of 2013, when the rate of return was set at the level of 14,79% 0-2% percent per year. The proposed principle differs significantly from the European practice”, – noted in the study.

According to experts, this model RAB-tariff will motivate the owners of the network to build new lines that can help reduce energy loss and optimize energy consumption. But this does not solve the main problem of the national grid – the aging Soviet infrastructure.