PM Shmyhal names one of causes behind crisis in Ukraine's electricity market

Imbalances on the market forced the government to negotiate with investors in renewables.

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Ukrainian Prime Minister Denys Shmyhal says he is setting up an ad hoc group under the Ministry of Energy and Environmental Policy to understand how the operator of the Ukrainian integrated power grids Ukrenergo issued multiple permits on connection to the energy grid, which became one of the causes of crisis on the electricity market.

"I'm ready to set up a working group under the ministry that will study how an unlimited number of permits for connection the energy grid were issued. That led to imbalances where we were forced to enter into difficult negotiations and where super-expensive 'green' energy displaced cheap nuclear power," he said during an online broadcast of a meeting of the parliamentary Committee on Energy, Housing and Utilities on May 12.

According to Shmyhal, investors in renewables significantly increased the capacities of the "green" generation at an inflated tariff. Therefore, the fact of issuing a large number of relevant permits requires investigation.

"We need to probe this and figure out where it all stems from," he added.

Read alsoUkraine's government not to increase power rates for households

The prime minister says he supports the development of renewable energy, although it should be cheap, he believes. At the same time, he admits that amendments to the legislation will be adopted, allowing renewable energy operators to sell their produce under direct contracts.

As UNIAN reported earlier, according to Ukraine's National Energy and Utilities Regulation Commission (NEURC), the share of electricity from renewables grew to 8% in Ukraine, which accounted for 26% of the cash flow on the market.

In 2019, green power generation in Ukraine grew by 11.6%. In late April, renewables' capacity totaled 7.2 GW. It is also planned to commission the additional 1 GW facilities in June.

More than 20% of the country's renewable energy market belongs to Ukrainian businessman Rinat Akhmetov's DTEK energy holding. Then come Swedish, Chinese and Ukrainian companies.

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