Our 5th issue of the MEMO series now takes stock of the first 12 months of operation under the new wholesale market.
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.
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.
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.
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.
Basic technological & economic features of electricity markets (in EU countries). Challenges in market development: new forms of trading, sector coupling and digitalisation.
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%).
Increasing electricity imports from Russia can help to improve competition, reduce prices and reduce emissions. But it should be regulated to minimize adverse effects.
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.
Analysis of (inflated) wholesale prices after electricity market opening. What could be done in the short and long run to fix this?
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.
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.
Before the deadline for electricity market opening, Ukraine’s official work hard to patch the holes in the upcoming regulatory framework. Does it help or constraints the future market?
Main features of a successful electricity market based on the 20 years’ history in opening the EU electricity market. Lessons learnt and best practises for the Ukrainian context.
Ukraine is about to liberalise its electricity market. Yet the devil is in the details: the rules are far from perfect and key players are not ready. What are the risks?
The market opening on July 1st may have negative impact on final prices for industries and economy as a whole. With little time left, at least critical risks should be mitigated.
Analysis of implementation challenges related to wholesale market reform, in particular preparation, coordination, issues of market design, concentration and liquidity.
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.
Ukraine’s 2035 electricity demand is estimated based on GDP growth, electricity price and energy efficiency trajectories. Only in a high GDP growth scenario, demand increases substantially.