Improving the Wholesale Electricity Market Model in Ukraine

Svitlana Chekunova, Leading Expert of Energy Programmes at the Razumkov Centre, has analysed the current state of the wholesale electricity market in Ukraine and proposed recommendations for stabilising the market model.

It is two year’s time since the beginning of the market operation (1 July 2019), yet the model retains administrative interventions in the form of price caps, market participation and trade restrictions, non-cost reflective tariffs, public service obligations (PSO), and the opportunity for the electricity imports from countries – nonmembers of the European Energy Community.

The existing electricity market model is functioning with distortions in all of its segments and in the conditions of financial instability of the state-run energy generating companies, debt crisis, unfavourable investment climate, unstabilised renewables (RES) sector.

This article presents an analysis of the factors that have influenced the operation of the wholesale electricity market in Ukraine over the first half-year of 2021 and outlines proposals for stabilising the market model.

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