Authorization
State Enterprise National Power Company “Ukrenergo” (SE NPC “Ukrenergo”), is currently fulfilling all requirements of the law regulating the reform implementation, and on 1 July 2019, the company will be ready to work in the new market environment. This was stated by Vsevolod Kovalchuk, CEO of SE NPC “Ukrenergo” at the press conference hold in Kyiv on 14 May 2019. He expressed concern, however, that the launch of the new electricity market on July 1, 2019 could create significant risks for consumers.
Key risks are the low competition due to the high concentration of electricity producers, which may lead to an uncontrolled increase in electricity prices in the absence of adequate consumer protection, as well as the lack of a well-established system for the presentation of reliable commercial metering data from distribution system operators.
According to Vsevolod Kovalchuk in Ukraine there is no import of electricity able to create competition for national producers, and the new market model does not yet provide any direct effective safeguards that could affect producers with a significant share in the market.
“Another issue is failure to adopt all necessary regulations and measures that will enable the introduction of the new electricity market from July 1, 2019. For example, there is still no complete list of regulations for the launch of the ancillary services market. Also, for half a year, the problem of blocking payments for software developers for the balancing market and the market of ancillary services remains unresolved”, stressed he.
Mr. Kovalchuk could not exclude possibility of the postponement of the launch of the new electricity market. He proposed to consider and analyse three scenarios for possible developments of the electricity market. The first one is to launch the market in accordance with the Law of Ukraine On the Electricity Market on July 1, 2019, the second one – to postpone the launch to October 1, 2019, and the third – with the start date of April 1, 2020.
“At the same time, delaying the launch of the market may lead to complete discarding of the reform and does not guarantee the appropriate decisions would be adopted at a later period”, added he.
Information: The Law of Ukraine “On the Electricity Market” adopted by the Verkhovna Rada of Ukraine on 13 April 2017 provides for the full-scale launch of a new model of the wholesale market from 1 July 1, 2019. The retail electricity market began to operate in Ukraine on 1 January 2019. Later, on 23 April this year, representatives of the EU, EBRD, the European Energy Community, European Investment Bank and USAID in Ukraine expressed their concern about the slowing down the process of introducing the new electricity market model in Ukraine. State enterprises NPC Ukrenergo and Energorynok conducted test sales and purchases of electricity within the context of implementing the law. On 13 May 2019 Ukrainian Prime Minister Volodymyr Groysman confirmed the launch of the new electricity market in Ukraine from 1 July 2019.
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