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  • The National Energy and Utilities Regulation Commission approved a preliminary decision on the certification of Ukrenergo in accordance with the ISO model

    On 2 June 2021, the Regulator made a preliminary decision on the certification of NPC Ukrenergo as a European-style Transmission System Operator (TSO) in accordance with the ISO (Independent System Operator) model.

    “TSO certification constitutes a fundamentally important prerequisite for our integration into ENTSO-E, presenting a strategic goal not only for Ukrenergo but also for Ukraine in general,” said Maksym Yurkov, Member of the Board of NPC Ukrenergo. “The preliminary decision means the first stage of the certification procedure, which should confirm the compliance of the Ukrainian transmission system operator with the requirements of the Third Energy Package effective in the European Union. The final decision must be approved after fulfilling a number of conditions. In particular, they include the implementation of the list of measures defined in the previous decision and the obtaining of the Energy Community Secretariat’s opinion on the compliance of NPC Ukrenergo’s activity with the requirements of current European legislation. NPC Ukrenergo is now making every effort to ensure that the measures specified by the Regulator in the previous decision are implemented before the decision on certification is made on the merits.

    It is to be recalled that the certification of the transmission system operator is required by the Law of Ukraine “On the Electricity Market” and the EU Third Energy Package. At the end of 2019, NPC Ukrenergo applied for certification under the OU model (ownership unbundling). However, the Regulator failed to make a positive decision, while the Energy Community Secretariat did not issue a positive opinion due to the fact that the Ukrainian legislation lacks certain conditions for meeting the OU model. First of all, it was a question of legislative regulation of the transmission system ownership: according to the OU model, it should be owned directly by the transmission system operator. However, under Ukrainian law, the transmission system may belong only directly to the state and not to the state company.

    To solve this problem, in April 2021, the Verkhovna Rada of Ukraine adopted Law 1396-IX, which allowed certifying NPC Ukrenergo as a European-style TSO according to the ISO model. After that, the National Energy and Utilities Regulation Commission amended the operator certification procedure accordingly in order to be able to approve a decision on certification in conformity with the new rules. Law 1396-IX entered into force on 15 May 2021, and on 17 May, Ukrenergo submitted an application for certification to the National Energy and Utilities Regulation Commission.

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