Ukrenergo opposes electricity price controls for businesses, citing 'strategic importance'
Ukraine's state-owned energy company Ukrenergo is advocating against setting price caps on electricity for businesses, Chairman Volodymyr Kudrytskyi told Ukrainian outlet Telegraf.
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He explained that the lifting of restrictions is necessary for the unimpeded import of electricity to Ukraine.
Current price caps in Ukraine are valid until June 30.
According to Kudrytskyi, they do not promote import when it is needed, and on the contrary, stimulate import when there is no need for it.
"On a sunny weekend, consumption is low, a lot of energy is produced by solar power plants, and the minimum price cap that operates on the market does not allow the price to fall below a certain level. And we see an absurd situation when we have a surplus, the price is kept at an artificially high level, and in Europe it is sometimes negative at such times. And then imports come to us from Europe, when we already have a surplus," said Kudrytskyi.
Currently, the regulator is discussing new price caps, but the company is still not satisfied with them.
REFERENCE. Until the end of June, the price caps established since the beginning of the full-scale invasion of Russia in 2022 are in effect in Ukraine:
→ lower – UAH 1,378.97 ($37) and UAH 2,646.25 ($72) per MWh for hours of minimum and maximum load;
→ upper – UAH 2,000 ($54) and UAH 4,000 ($108) per MWh for hours of minimum and maximum load.
From June 30, new limit prices may be set for the day-ahead market and the intraday market at the following level:
→ upper – UAH 2,706.63 ($73) and UAH 5,413.26 ($146) per MWh for hours of minimum (23:00 – 07:00) and maximum (07:00 – 23:00) load.
The minimum marginal price for the day-ahead market will be UAH 10.00 ($0.27) per MWh.
For the balancing market, the maximum marginal price will be 125% of the day-ahead market price, the minimum price will be UAH 0.01 (0.00027$) per MWh.
"According to our preliminary assessment, the new level of restrictions does not make it possible to guarantee the needs of Ukrainian consumers with imports. Therefore, we will appeal to the regulator with a proposal to establish such regulation that would not threaten the energy security of the Ukrainian energy system," he said.
The head of Ukrenergo believes that the regulator should fully liberalize the market.
"The abolition of price caps will not necessarily mean an increase in the price. It means that the price will sometimes be lower than now, sometimes higher. It is quite difficult to predict what the weighted average price will be. But I would venture to make an assumption that the average price itself will not increase much," he said.
"Abolition of price caps and liberalization of the electricity market in general is strategically beneficial for business, because it ensures greater stability of the energy system and reduces the probability of blackouts. And we know from the winter period that blackouts are much more painful for business, especially for enterprises with a continuous technological cycle, than a temporary price fluctuation," said Kudrytskyi.
Ukraine's state-owned energy company Ukrenergo is advocating against setting price caps on electricity for businesses, Chairman Volodymyr Kudrytskyi told