NPP Analysis – May 2020

NPP electricity generation in May was significantly below the economic efficient level. This cannot be explained by Covid-related demand decrease or a high RES generation share.

Regulating Curtailment

Curtailing and compensating RES can be cheaper than taking up 100% of RES electricity through investment into conventional plant park or transmission.

Seven months of market opening – stocktaking

Frequent changes to the legal framework fail to address the structural problems. Loopholes undermine the market and speed up debts’ accumulation. Extended data transparency is an upside of the reform.

Energy Strategy 2035. Implementation progress Nov 2019 – Feb 2020

Progress of Ukraine’s 2050 Green Energy Transition Concept. Legislative amendments to the electricity market. FIT restructuring issues. Signing of gas transit deal. Regulatory framework on energy storage. Carbon taxation.

Recommendations on energy storage

Ukraine’s electricity market does not need state support for energy storage projects. It needs a properly working electricity market aligned with the EU 4th Energy Package to boost the flexibility of the grid.

Electricity for all

Basic technological & economic features of electricity markets (in EU countries). Challenges in market development: new forms of trading, sector coupling and digitalisation.

LCU Workshop on energy markets held in Kyiv

On December 14th, 2019, LCU experts gave an introduction into aspects of energy and climate policies to a group of experts and parliamentarians, most of them members of the energy committee of the Ukrainian Verkhovna Rada. The aim was to provide newly elected MPs with fundamental expertise on the complex topic of electricity markets, to discuss specific challenges of integrating renewable energy sources into Ukraine‘s energy system, and to look into challenges of coal phase-out in Ukraine.

Renewable Energy in Ukraine

Further RES expansion is needed to replace the ageing power plant fleet and to sustain energy security. To account for a higher variability in the system, different instruments can be utilized.

RES quotas for 2020 – 2024

Different sets of RES quotas are analyzed. In the best-case scenario, 3 GW wind & solar are built and RES quotas set at 1.6 GW, enabling a RES share above 20% in 2025.

CO2 taxation in Ukraine

Tax revenues from a potential upstream carbon tax in Ukraine of 27UAH/t CO2 are estimated between UAH 5.6 and 6.1 bln. Price increases from taxation are strongest for coal (+3.5%-4.3%).

Energy Strategy 2035. Implementation progress Aug-Nov 2019

Progress on gas TSO unbundling and certification, corporatisation and certification of Ukrenergo, licensing in upstream sector. Analysis and recommendations on ESU action plan implementation.

Limiting the cost of feed-in-tariff subsidies

Assessment of feed-in-tariff, related expenditures for RES, current scheme of financing, impact on state budget and electricity prices. Analysis of risks of retroactive change in support scheme.

Russian Ukrainian Electricity Trade

Increasing electricity imports from Russia can help to improve competition, reduce prices and reduce emissions. But it should be regulated to minimize adverse effects.

Developments on the electricity market Sep 2019

Market power remains strong and starts exploiting balancing market. Changes to PSO does not help the competition. Prices in the IPS start to drop as nuclear power ramps up production.

Aspects of RES-support in Ukraine

The Ukrainian electricity system can absorb fluctuations of higher RES shares and support a further expansion with RES auctions.

Limiting the cost of feed-in-tariff subsidies

The rising cost of RE support pushes electricity prices beyond affordable level in Ukraine. Yet the revision of the established FIT scheme should be carefully designed and consider potential risks.

The Benefits of RES Curtailment in Ukraine

Analysis of curtailment as a flexibility option in the short and long run, including mitigation of the ‘green-coal paradox’ and comparison with hardware solutions. Overview of curtailment experiences across the world.

Developments on the electricity market Jul-Aug 2019

Prices are stable as the market shows no signs of effective competition. Increase of import to the BEI does not affect prices. Price caps are higher than the estimated marginal costs of coal generators.

Energy Strategy 2035. Implementation progress Apr-Jul 2019

Progress on ensuring of the NEURC’s independance, unbundling and PSO on gas market, and launching the NECP development process. Key priorities in energy policy for the new administration.

The first two weeks of market opening

Ukraine has finally opened its electricity market despite many concerns. Prices are high, some market segments do not work properly, and the smaller BEI trading zone is under the reign of monopoly.

Challenges of the Electricity Market Reform

Analysis of implementation challenges related to wholesale market reform, in particular preparation, coordination, issues of market design, concentration and liquidity.

Debts in the Ukrainian Electricity System

Accumulated debt poses a major obstacle on the way towards a new electricity market. A solution to this problem needs to be found before the new market design is introduced.

Energy Strategy 2035. Implementation progress Feb-Apr 2019

Developments on the law introducing RES-e auctions, launch of daily balancing on gas market and Naftogaz issues. Deep dives into the issue of debts in the Ukrainian electricity system and progress with electricity market reform.

RES auctions in Ukraine Quota Sizing

25% of electricity generation can come from Renewables in 2035 when annually installing around 500MW, what seems realistically as of today.

Local curtailment charges for RES

The concentration of wind and solar plants in high-yield regions increases balancing needs and grid constraints. We recommend introducing a transparent curtailment charge mechanism.

Energy and Climate Targets – An Overview

Key messages: Multitude of energy & climate obligations must be coordinatedRES share surpasses unambitious targetsDiffering indicators in national strategies – risk to cause confusionProgress in energy intensity – but still a long way aheadEmission targets are not ambitious

The Draft Law on Renewable Energy Sources

Recommendations: Dynamically adjusting FIT based on project duration. Incentives for a smart & grid-friendly location selection. FIT reduction in 2019 to contain costs.

Stabilizing the support for renewables

Ukraine is about to adopt changes to the RE support law and introduce auction-based remuneration scheme. But is it not too late? Will the conservative changes to FIT help to contain the expensive boom?

Energy Strategy 2035. Implementation progress Nov 18 – Jan 19

Changes in the environmental taxes and related challenges, new PSO rules on the gas market and supply billing issues. Deep dive into the draft law on new RES support scheme (auctions) and introduction to Ukraine’s National Energy and Climate Plan.

Balancing of fluctuating renewable power sources

Based on a LCU’s Optimised Dispatch Model (ODM), we assess that the current Ukrainian power system can balance fluctuations of up to 15 GW of wind and solar (in-depth analysis).

Location selection and wind solar mix

Wind and solar installations should be distributed over the country. Policy should strive for an optimal mix of wind and solar installations in order to reduce system cost.

Balancing Renewables in Ukraine

Based on a LCU’s Optimised Dispatch Model (ODM), we assess that the current Ukrainian power system can balance fluctuations of up to 15 GW of wind and solar (overview of results).