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  • Regulatory framework for the new electricity market model in Ukraine

    The Law was adopted within the framework of fulfillment of Ukraine’s obligations under the Treaty establishing the Energy Community and the Association agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part.

    This Law is aimed at implementing the Energy Community legislation in the field of energy, namely Directive 2009/72/ECconcerning common rules for the internal market in electricity and repealing Directive 2003/54/ECRegulation (EC) No. 714/2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No. 1228/2003, Directive 2005/89/EC concerning measures to safeguard security of electricity supply and infrastructure investment.

    In the process of implementing a new electricity market model, the leading role is assigned to two key operators, namely “NPC “Ukrenergo” (hereinafter referred to as the transmission system operator) and SE “Energorynok” (the market operator).

    Unbundling of monopoly activities (transmission, distribution) from competitive activities (generation/production, supply and trading) is one of the key prerequisites for the formation and strengthening of competition in the wholesale and retail electricity markets. To ensure independence of and compliance with requirements of the transmission system operator’s unbundling, the Law provides for the certification of the transmission system operator. Pursuant the Resolution No. 1016 of 10.08.2017, the National Energy and Utilities Regulatory Commission approved the Procedure for Certification of Electricity Transmission System Operator.

    To initiate Ukrenergo certification process as a transmission system operator, the reassessment of the company’s assets was conducted and the process of the company’s corporatization was commenced.

    Within the framework of implementation of the Action plan for introduction of the new electricity market model, Ukrenergo is responsible for the development, in particular, of:

    • Transmission Network Code, Metering Code;
    • Market Rules;
    • Connection Fee Methodology;
    • Congestion Management Rules and Procedure for cross-border capacity allocation;
    • Preparation of Ten-Year Network Development Plan (as a part of the Transmission Network Code).

    In order to implement the provisions of the Law of Ukraine “On Electricity Market,” the National Energy and Utilities Regulatory Commission, at the open meeting held on March 14, 2018, approved the main secondary legislation, namely:

    Market Rules (NEURC Resolution No. 307 of March 14, 2018, unofficial translation)

    DAM and IDM Rules (NEURC Resolution No. 308 of March 14, 2018)

    Transmission Network Code (NEURC Resolution No.309 of March 14, 2018, unofficial translation)

    Distribution Network Code (NEURC Resolution No. 310 of March 14, 2018)

    Commercial Metering Code (NEURC Resolution No. 311 of March 14, 2018)

    Draft annex to the Commercial Metering Code “Procedure for registration of electricity commercial metering services providers”

    Retail Electricity Market Rules (NEURC Resolution No. 312 of March 14, 2018).

    On April 18, 2018, the Transmission Network Code, the Metering Code, the Distribution Network Code and the Retail Electricity Market Rules were published in the official printed publication – newspaper “Uriadovyi Kurier,” and came into force on April 19, 2018. The Market Rules, the DAM and IDM Rules were published in the official printed publication – newspaper “Uriadovyi Kurier,” and came into force on June 23, 2018 and June 24, 2018 respectivly.