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  • The Agreement on Accession of Ukraine’s IPS to ENTSO-E finalized

    During the meeting of 23 May in Lisbon, ENTSO-E Continental Europe Regional Group has finalized the Agreement on Accession of Ukraine’s IPS to ENTSO-E. The signature of this Agreement in June 2017 must become the starting point for integration of Ukraine’s Integrated Power System into the European association.

    The synchronization will undoubtedly have positive consequences for the country in general.

    Security aspect

    Technologically, synchronization with ENTSO-E will greatly enhance strength of the Integrated Power System of Ukraine and minimize its dependence on the stability of coal deliveries to thermal power plants. Ukraine will be able to receive emergency assistance to its IPS from power systems of ENТSO-E member states. In addition, the system’s overall technological level of operation will also increase due to ENTSO-E’s strict requirements.

    Economic aspect

    Simultaneous operation of Ukraine’s IPS with ENТSO-E will also help boost electricity exports to Europe thanks to more efficient utilization of existing generating capacities (including NPPs), mutually beneficial exchanges and diversification of energy resource exports. In addition, free exports will automatically improve investment attractiveness of Ukraine’s energy sector from the viewpoint of development of generating capacity. Overall, according to Ukrenergo’s estimates, the export volume may increase from today’s 5 billion kWh to 18-20 billion kWh, which in turn, would increase the revenues from electricity exports up to US 1.5 billion. The synchronization opens the opportunities for Ukrainian hydroelectric power plants to participate in the balancing of peak loads in the neighboring power systems of European countries (the average price in balancing markets amounts to almost 70 euros per MW).

    Institutional aspect

    Synchronization with ENTSO-E will intensify competition in the domestic electricity market as well, forcing monopolists to compete for domestic consumers by offering better prices and service quality. It will create the foundation necessary to reduce dependence of consumers (households and businesses) from suppliers.

    “Finalization of the Agreement on Accession of Ukraine’s IPS to ENTSO-E and passage by the Verkhovna Rada of the Law of Ukraine On the Electricity Market of Ukraine will give real freedom to the electricity market”, Ukrenergo CEO Vsevolod Kovalchuk said. “In just a few years, we’ll be able to freely exchange electricity with European countries and will have real competition in the hitherto always closed market”.

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