On April 13, 2017, the Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Electricity Market”.
The purpose of the new electricity market is to introduce competitive mechanisms for the electricity market functioning, ensure the free choice of counterparties and the consumer’s right to choose a supplier of electricity freely. The Law provides for various mechanisms for the purchase and sale of electricity, namely bilateral agreements, a day-ahead market and an internal market. In order to ensure sufficient amounts of electricity necessary for real-time balancing of electricity production and import and electricity consumption and export, settlement of system constraints in the integrated power system of Ukraine, as well as financial regulation of electricity unbalances, the operation of the balancing market and the market of ancillary services is provided.
Adoption of the Law is a prerequisite for structural changes in the Ukrainian electricity sector and constitutes a basis for the industry’s modernization and the integration of Ukraine’s electricity market into regional energy markets, with the subsequent accession to the pan-European energy market.
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 the European Atomic Energy Community and their 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/EC concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC, Regulation (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 SE “NPC “Ukrenergo” (hereinafter referred to as the transmission system operator) and SE “Energorynok” (the market operator).
Separation of monopoly activities (transmission, distribution) from competitive activities (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 for the transmission system operator’s separation, the Law provides for the certification of the transmission system operator. Pursuant to 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 System Code, Commercial Metering Code;
– Market Rules;
– Draft Accession Fee Formation Procedure;
– Rules of limitations management and Procedure for interstate sections throughput capacity distribution;
– Procedure for preparing the transmission system development plan for the next 10 years (as a part of the Transmission System 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:
Transmission System Code (NEURC Resolution No. 309 of March 14, 2018)
Electricity Commercial Measuring Code (NEURC Resolution No. 311 of March 14, 2018)
Market Rules (NEURC Resolution No. 307 of March 14, 2018)
Rules of the day-ahead market and internal market (NEURC Resolution No. 308 of March 14, 2018)
Distribution Systems Code (NEURC Resolution No. 310 of March 14, 2018)
Rules of Retail Electricity Market (NEURC Resolution No. 312 of March 14, 2018).
On April 18, 2018, the Transmission System Code, the Commercial Measuring Code, the Distribution Systems Code and the Rules of Retail Electricity Market were published in the official printed publication – newspaper “Uriadovyi Kurier,” and came into force on April 19, 2018.