Ukraine's new electricity market being launched July 1

REUTERS Ukraine&#39;s new electricity market, which will allow households choosing their suppliers, will start work on July 1. To implement the norms of the law, the Cabinet of Ministers of Ukraine created two enterprises on the basis of the state-owned operator of Ukraine&#39;s united power grids, Ukrenergo, to work in the new model of the wholesale electricity market: the Market Operator and the Guaranteed Buyer state enterprises. The National Energy and Utilities Regulation Commission (NEURC), at its meeting on June 24, made the final decisions that are required to launch a new electricity market in Ukraine on July 1. According to Ukrainian Energy and Coal Industry Minister Ihor Nasalyk, the price of electricity for the industry could grow by 5-6%. Earlier, Ukrainian President Volodymyr Zelensky&#39;s envoy to the Cabinet of Ministers Andriy Gerus, speaking at a government meeting on this issue, said that, according to the NEURC, if a government decree on special obligations was adopted, electricity prices for non-residential consumers would increase by 40-50%, which would have negative consequences for the economy. Read alsoUkraine&#39;s most important battle is for energy independence – Forbes The National Bank of Ukraine predicts after the introduction of a new market, electricity prices will rise by 25%. This will have a minimal impact of 0.2 percentage points on consumer inflation, since the share of electricity in the basket is 1%. According to Ukrainian Prime Minister Volodymyr Groysman, the Cabinet of Ministers made all the necessary decisions to prevent the rise in electricity prices. On June 5, the Cabinet of Ministers placed special obligations, related to the electricity supplies for households from July 1, 2019, to December 31, 2020, on state-owned energy generating companies, namely Energoatom, Ukrhydroenergo, Ukrenergo, as well distribution system operators. According to Nasalyk, the decision will make it impossible to raise electricity prices for households in the country&#39;s new electricity market. According to the government&#39;s decision to place special obligations, Energoatom will have to sell no more than 90% of its electricity at a fixed price, and Ukrhydroenergo will have to sell no more than 35%. The sale of electricity in the new electricity market at auctions under bilateral agreements will be temporarily carried out on the Ukrainian Energy Exchange within three months. On June 26, Ukrainian President Volodymyr Zelensky submitted to the Verkhovna Rada, Ukraine&#39;s parliament a bill to lower the price of electricity in the country. The Delegation of the European Union and the Representative Office of the European Investment Bank in Ukraine, as well as the European Bank for Reconstruction and Development recommended that the introduction of a new electricity market in Ukraine be postponed for a limited period due to unavailability of important regulatory standards and IT systems. The World Bank, one of Ukraine&#39;s key lenders, supports the country&#39;s law on the electricity market aimed at introducing competition, but recommends rescheduling the launch of the new electricity market for October 1, 2019, due to unavailability of certain provisions of the regulatory framework and IT systems. UNIAN memo. In April 2017, the Verkhovna Rada passed the Electricity Market Law of Ukraine. According to one of the authors of the document, the bill will lead to a competitive relationship in the segments of electricity generation and supplies for final consumers, which will force producers to increase their efficiency and remove inefficient power generation from the market. The introduction of the new electricity market will also allow people to choose electricity suppliers. The first trading of electricity in the newly formed market segments is expected to start in Ukraine on July 1, 2019.

Ukraine's new electricity market being launched July 1

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