Power rates for industry grow by 30% since launch of new electricity market in Ukraine

CEO of NEC Ukrenergo, which operates Ukraine's integrated power grids, Vsevolod Kovalchuk says power rates for the industry in Ukraine have grown by 30% since the launch of a new electricity market on July 1, 2019.

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"In fact, power rates for the industry have shown a much greater growth than the government expected, that is at 5-6%. The price of electricity for the industry soared by 30% in the first 10 days of the [new electricity] market operation. The tendency is that the difference will be increasing," he said at a press conference on July 11.

According to Kovalchuk, the price has increased, but the final cost of electricity for July has not yet been formed. It will be set only by the end of the month when data on the imbalances of the new market becomes available.

The CEO added that such a significant price hike was due to an incorrect model for imposing special obligations since the potentially large player, Ukraine's national nuclear energy generating company Energoatom, had been withdrawn from the market.

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.

UNIAN memo. The national energy company, Ukrenergo, operates trunk and inter-state transmission lines and is in charge of centralized control over Ukraine's integrated power grids. It is wholly owned by the state and subordinate to the Energy and Coal Industry Ministry.