A new model of the electricity market has been launched in Ukraine
Starting from July 1, according to the law "On the Electricity Market", the work of a new liberalized model of the electricity market began with ever first electricity trading sessions based on bilateral agreements for day-ahead, intraday, and electricity balancing markets.
The market for electricity bilateral agreements
On June 27, on the website of the Ukrainian Energy Exchange (UEEX), there was the first in the history of Ukraine auctions of electricity needs for households and network losses (within the mechanism of assigning Public Services Obligations (PSO). The auction under the July 2019 bilateral contracts will cover 138 GWh of electric power by "Ukrhydroenergo" (at price of UAH 0.6738 / KWh) and 4144.8 GWh "Energoatom" (at price of UAH 0.5667 / KW). This auction ushered Ukraine into new electricity market and ensured price stability, guaranteed by law, for domestic consumers.
“This is a really significant event in the electricity market. Today, 4 days ahead of the 1st of July, the launch of the market has actually started, as the segment of bilateral agreements market opens first, prior to launch of the day-ahead market, as well as the intraday and balancing markets. The auctions were held in the form of a specialized session, and I can evaluate them as successful, and validate the fact of launching a new model of electricity market in Ukraine", commented the results of the auction, the Chairman of the Exchange Committee of the UEEX Oleksiy Dubovskiy.
Also, on June 27, the first auction was launched for the sale of electricity under bilateral agreements in the free market segment. The UEEX hosted e-bid proposals by heat generators, Kalush CHPP (price for peak and off-peak -UAH 2.35 / kWh), PJSC Centrenergo (UAH 2.355 / kWh for the peak and UAH 1,103/ kWh for off-peak), and the Kremenchug CHPP (UAH 2.402 / kWh for peak and UAH 2.402 / kWh for off-peak). These auctions are scheduled for July 2, 2019.
The day-ahead electricity market
On June 30, in the lead-up of new model of electricity market launch, on the eve of launch, on the basis of the XMtrade/PXS e-platform, the State Enterprise "Market Operator" successfully traded their day-ahead offers. 192 companies took part in those auctions to compete over 150.9 GWh in the trading zone of the Integrated Power System of Ukraine (IPSU), and 9.4 GWh within the Burshtyn TPP Energy Island. The average selling price on the first day of the market operation, July 1, was UAH 1.594 / kWh in the IPSU and UAH 1.776 / kWh within the Burshtyn TPP Energy Island.
"The electricity market has started! Today, the first bids for the day-ahead market have taken took place. I congratulate the SE "Market Operator", NEC "Ukrenergo", "Oschadbank" and [Igor Nasalik [Minister of Energy and Coal Industry of Ukraine - Ed.] with the successful introduction of an important reform for Ukraine ", as commented on the successful completion of the trading session by Mr. Volodymyr Kistion, Deputy Prime Minister of Ukraine, being in charge of fuel and energy complex of Ukraine.
The launch of the day-ahead market was also commented by Mr. Igor Nasalik, Minister of Ministry of Energy and Coal Industry of Ukraine, as saying that 100 regulations and rules were adopted in order to launch the market, with one-thirds of the regulations worked out by specialists of his Ministry.
The intraday electricity market
At the same time, on June 30 there were some problems with the work of the XMtrade/PXS e-platform for trading in the intraday electricity market, which were successfully resolved in the morning of July 1. So far, results of the auctions for July 1 have been remaining unpublished.
The electricity balancing market
The launch of the electricity balancing market was successful as well, reported by Ukrenergo , the only operator of this segment of the electricity market of Ukraine.
"A historical moment. July 1 has came, a new market has been started. No blackouts has happened. We have successfully launched the electricity balancing market ", writes on her Facebook Maria Tsatoryan, Head of the Department of Communications and International Cooperation.
The first results of the market segments generated both positive reviews and criticism, including the one from Mr. Andrew Gerus, Representative of the President in the Cabinet of Ministers of Ukraine. The latter, on his Facebook, criticized the starting prices during the auctions by thermal generators. In his opinion, such price indices are "absolutely inadequate result of the reform". Mr. Gerus also drew attention to the problems with the launch of auctions in the domestic intraday market, and reminded of the bills by the President of Ukraine suggesting to postpone the new electricity market.
In response to Gerus's remark, DTEK Energo Communications Director Irina Milyutina noted that price caps for market segments (the day-ahead and intraday ones) had been set by the NKREKP (state regulator). Also she consideres the failure of the e-trading software for the intraday market as a "temporary delay".
"The collapse did not happen. There is light. Everything works. Prices for the residential consumers remained unchanged... There do exists open market competition. Market reform has made its first step", wrote Ms. Milyutina in her Facebook-account.