Parliament adopts law on certification of Ukrenergo

The Parliament of Ukraine adopted in the second reading the Draft Law №3364-1-d “On certification of the Transmission System Operator of NEC Ukrenergo”, which promotes the integration of the Integrated Power System of Ukraine into the ENTSO-E.

On April 15, 2021, there were 296 MPs voting in favor of the Draft Law №3364-1-d.

According to its content, the Draft Law №3364-1-d sets requirements for the separation of the NEC Ukrenergo from electricity supply systems, which will not be a part of a vertically integrated business entity and carries out economic activities that are independent from electricity generation, distribution, supply, and trading.

The Draft Law №3364-1-d states that according to the Conclusion № 1/20 of the Secretariat of the Energy Community, the NEC Ukrenergo, given the specifics of Ukrainian legislation, cannot be certified by the model of ownership unbundling (OU), as the company still owns backbone network.

However, the NEC Ukrenergo can be certified according to the ISO model (which stipulates that the transmission system operator uses property that ensures the integrity of the grid system of Ukraine and manages electricity dispatch (operational and technological), main and interstate electricity networks, while the latters remains in state ownership. The Draft Law №3364-1-d also amends the Commercial Code to allow the NEC Ukrenergo to manage Integrated Power System of Ukraine on the right of economic management.

In addition, the Draft Law №3364-1-d will provide the NEC Ukrenergo with access to joint financing mechanisms for interstate connection projects aimed at synchronizing the Integrated Power System of Ukraine with the ENTSO-E, and joining the mechanism for compensation of costs arising from cross-border transmission of electricity (ITC mechanism (Inter-Transmission System Operator Compensation), in accordance with the requirements of the EU Regulation 838/2010.

According to MP Andriy Gerus, the Draft Law №3364-1-d also provides for:

  • simplification of electricity export-import procedures with Ukraine and EU countries (conducting coordinated auctions of access to interstate electricity interconnections);
  • introduces restrictions / bans on electricity imports from the Russian Federation and the Republic of Belarus (due to the end of the heating season and the growth of coal reserves in TPP warehouses);
  • introduces the obligation of generating companies that are in communal ownership to sell electricity exclusively through competitive auctions.

As earlier reported by ExPro, on April 9, 2021, the Parliamentary Committee on Energy, Housing, and Communal Services approved the Draft Law № 3364-1-d for the second reading by the Parliament of Ukraine. One may recall the Draft Law № 3364-1-d to have passed its first reading at the Parliament of Ukraine on February 19, 2021.

18:05 / 15 April 2021

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