Analysis: Risks of opening the Ukrainian Electricity Market


Ukrainian power markets are not ready to start in July 2019

  • Crucial elements of market opening remain unprepared.
  • If markets opened under current conditions, those players with significantmarket power will be able to exercise it.
  • Opening the markets in July 2019 at current level of readiness adds no value and may lead to further inefficiencies and uncontrolled price increases.
  • Direct regulations via price limitations or caps will distort market mechanisms and do not address the problem of market power.
  • Mitigating risks ex ante is more effective than dealing with shocks ex post.
  • Market opening during turbulent political period implies significant risks – it is important that a functioning government is in place that can tackle any arising issue quickly.
Oleksii Mykhailenko, Dr. Matti Supponen, Dr. Georg Zachmann

What is a Policy Briefing?

Similar to Policy Papers, current or possible future policy topics are discussed. The economic analysis and policy recommendations are presented in a concise manner, focussing on the core arguments and results.