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MARKET OF ELECTRICAL ENERGY: CHALLENGES OR OPPORTUNITIES?

The regulator complied in full with the requirements of the Law of Ukraine "On the Electricity Market" regarding the adoption of almost 100 normative legal acts necessary for the introduction of a new market of electric energy.

Since January 2019, the retail electricity market has been started up, this allows non-residential and domestic consumers to choose a supplier. Today, 226 companies are licensed. Personally, I expect that the segment of independent suppliers in the market will increase from 10% to 25%.

Increasing competition and pricing market mechanisms is one of the opportunities offered by the reform of the electricity market. I would like to add to the new options the strengthening of consumer rights and the definition of specific limits of responsibility between public authorities.

At the same time, there are challenges.

The first is the debt on the wholesale electricity market, which amounts to more than UAH 30 billion.

The second is the assignment of special duties.

It is very important that the currently developed by NERCP model corresponds to the best European practices and does not force Energoatom to subsidize other producers.

The third is the timely certification of the transmission system operator, which today, due to the delay in organizational and corporatization processes, may take place not earlier than in October 2019.

In my opinion, this will be a deterrent to the full-scale launch of the electricity market.
The experience of a retail market start up suggests that in the process of liberalization of markets some certain operational problems cannot be avoided, which should be reacted timely and the approach to them should be improved together with further adjusting of the regulatory framework.

If the processes of developing the electricity market being considered strategically, it is important to develop the energy infrastructure and its safe operation.

The key to this should be investment policy.

Under the current tariff plans, it is difficult to count not only on long-term investments in the reconstruction and modernization of generation, but also on achieving the share of energy up to 20% from renewable sources in the energy balance of the country by 2035 in accordance with the tasks of the Energy Strategy of Ukraine.

What is the point in investing in electricity generation taking in mind the current critical risks of its supply to the market? In case of the "cost plus" tariff system continue in Ukraine, the stable energy supply to consumers in Ukraine in the coming years will be a big question mark. In this scenario, investments in the Ukrainian economy in general should be forgotten, and good European laws, which have been adapted and approved by the Ukrainian parliament, including the fundamental Law of Ukraine "On the Electricity Market", can remain only on paper.

In conclusion, I want to remind everyone that an effectively functioning energy market provides for minimizing the risks for Ukraine's energy security.

VOLODYMYR OMELCHENKO, DIRECTOR OF ENERGY PROGRAMS, THE RAZUMKOV CENTER


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