Next Energy Policy Talk in a series to address
energy issues in Ukraine will take place on 19 February 2016 in Kiev. The
talk will be hosted by the EU-funded programme INOGATE and will be opened by
the Minister of Energy and Coal Industries, Volodymyr Demchyshyn, and senior
figures from energy ministries and other related state agencies, as well as
representatives of the EU Delegation and the European Commission.
Deregulation in the electricity industry aims
to create an efficient trading process for the forces of competition as well as
a market with a robust system of security and reliability. A competitive
wholesale market follows three-way segmentation: unbundling of generation,
transmission and distribution, as well as providing a centralised framework for
an economical electricity service. This assumes a large number of competitors
with no barriers to entry or exit.
Ukraine’s new Electricity Law will underpin electricity market reforms and provide a new
electricity model consistent with the Third Energy Package which fulfils Ukraine’s
Energy Community commitments. The EU new standardised electricity market model
(regulated third party access; unbundling; opportunities for new generation,
independent TSOs, DSOs and MOs; an open retail market and an independent
regulator) is designed to create the procedures for the wholesale buying and
selling of electricity, including a risk-minimising element due to
electricity’s inability to be stored, in the form of different markets.
The key question is how this can be applied
to Ukraine. Most cost savings are realised in the generation sector. As
ownership of generation in Ukraine is a mix of state and private sector
ownership and includes few players, will this limit competition and affect the
effective workings of the market after July 2017 when the new market is
operating? Both the regulator and the Antimonopoly Committee will have an
important role to play in monitoring and enforcement.
How will liquidity in the market be
increased and how quickly? What will happen to the existing debts in the
current market? How will support for renewables and CHP be financed? How will support
for the vulnerable be financed?
This Energy Policy Talk will propose the
following questions for discussion:
- What conditions for structure
of the market will be needed to establish a workable market model for a
competitive wholesale electricity market?
What are the expected benefits and problems with the new electricity
- What legal, policy, regulatory
and other measures should be undertaken in the next 18 months by the Government
to maximise the chances of a successful transition by the electricity industry
into the new market model? How quickly
can this happen?
- What should be the future power
generation mix? What will be the role of Renewable Energy Sources? Thermal power
plants? How will these ongoing electricity reforms benefit Ukrainian and other
consumers? How will prices develop? How will support to vulnerable consumers be