REUTERS
The new electricity market was launched on July 1.
Ukrainian Prime Minister Volodymyr Groysman has said the launch of a new electricity market in Ukraine automatically eliminated the effect of the "Rotterdam Plus" formula for calculating the price of coal in electricity tariffs based on the European API2 index.
"We've launched a new electricity market. This is the official 'funeral' of the 'Rotterdam Plus' formula. I congratulate everyone on this, because the move has made it possible," he told a Ukrainian TV channel on July 2.
The prime minister noted his main task in this regard, that is, the elimination of any hikes in electricity prices for households.
Read alsoZelensky introduces bill to lower electricity price in Ukraine
"The task has been accomplished. The market has been operating since July 1, while the price of electricity for Ukrainian citizens has not increased by a kopiyka," he said.
As UNIAN reported earlier, a new electricity market was launched in Ukraine on July 1 under the Electricity Market Law, the draft of which was passed by the Verkhovna Rada, Ukraine's parliament, in April 2017. The law provides for the introduction of more competitive relations in the energy market, and meets the requirements of the European Union's Third Energy Package.
According to DTEK's energy holding, during the first biddings to sell electricity on the day-ahead market, the price of electricity from DTEK's thermal power plants (TPPs) dropped by 12% against the first half of 2019, to UAH 1,569 (US$59.89) per kWh.
UNIAN memo. The "Rotterdam Plus," or Rotterdam+, is a method of forming a price of a coal in power generation by thermal power plants in Ukraine. It was introduced in March 2016 and became effective in May 2016.
The introduction of the "Rotterdam Plus" formula was predetermined by the loss by Ukraine of its coal-producing area in Donbas after Russia unleashed war in the east of Ukraine.
Almost all coal mines producing anthracite consumed by most of Ukraine's thermal power plants are now located on the territory beyond Ukraine government control.
Resolution No. 289 of the National Energy and Utilities Regulation Commission introducing the formula determines the indicative price of coal based on the average market price at the ports of Amsterdam-Rotterdam-Antwerpen for 12 months.
NEURC officials claimed that the measure would help Ukraine ensure energy independence and accumulate enough coal for a heating season. They also stated this method of calculation should eliminate manual price regulation, and ensure independence from supplies from the warzone.
The formula has been criticized by experts, as well as by the government.