Our 5th issue of the MEMO series now takes stock of the first 12 months of operation under the new wholesale market.
2020 electricity consumption might decrease by 5% (best case) to 8% (worst-case scenario).
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.
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.
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.