On April 15, Verkhovna Rada of Ukraine adopted in the second reading and as a whole the draft law №3364-1 (d), which allows to certify NPC Ukrenergo as a European-style transmission system operator (TSO) according to the ISO (Independent System Operator) model. After the entry into force, Ukrenergo will have the opportunity to submit to NEURC the documents for certification, which is a mandatory prerequisite for the integration of the integrated power system (IPS) of Ukraine into the power grid of Continental Europe ENTSO-E.
Ukrenergo welcomes this important step made by parliamentarians and expresses gratitude for the fruitful cooperation to the authors of the legislative initiative, the Chairman of Verkhovna Rada Committee on Energy, Housing, and Utilities Services Andriy Herus and the Chairman of Subcommittee Andriy Zhupanyn, Chairman of Verkhovna Rada of the IX convocation Dmytro Razumkov, the Cabinet of Ministers of Ukraine, the Reforms Delivery Office of the Cabinet of Ministers of Ukraine, the Ministry of Energy, members of NEURC, the Secretariat of the Energy Community, as well as People’s Deputies who made efforts to adopt this important document.
Special thanks for the support to the Deputy Prime Minister for European and Euro-Atlantic Integration of Ukraine Olha Stefanishyna.
“We are very grateful to all those who made efforts to create and adopt the draft law №3364-1 (d). It was a difficult but very important job that allows us to get one step closer to the integration into ENTSO-E. We hope that we will continue to work together effectively to achieve this strategic goal for Ukrainian energy sector”, said Volodymyr Kudrytskyi, Chairman of the Management Board of NPC Ukrenergo.
It is important to emphasize that during the preparation for the second reading the draft law №3364-1 (d) was supplemented with the provisions that open opportunities for joint auctions for the allocation of cross-border transmission capacity.
Joint auctions for the allocation of cross-border transmission capacity between Ukraine and neighbouring TSOs of ENTSO-E area will significantly simplify the export/import of electricity to/from Europe. In particular, it will ensure unimpeded access of all market participants to the cross-border transmission capacity, minimize the number of procedures required to ensure electricity cross-border trade, and significantly speed up the passage. These measures will create conditions for maximum competition between electricity producers and importers and the formation of a fair electricity market price.
In addition, the introduction of joint auctions will solve the problem of charging for transmission services for the export of electricity. This is extremely important to ensure the financial stability of the transmission system operator, as a number of litigations between the TSO and electricity exporters are currently ongoing. After the introduction of joint auctions, Ukrenergo will be able to reimburse the costs of transmission services during the export of electricity in accordance with the ITC (Inter-Transmission System Operator Compensation) mechanism, which operates in the ENTSO-E countries.
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