Ukraine plans to increase electricity prices for businesses from 1 November 2024, but this does not apply to household consumers. This is stated in a draft resolution of the National Energy and Utilities Regulatory Commission (NEURC), Komersant ukrainskyi
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The draft resolution will be submitted for consideration on 1 October, and if approved, the new prices will take effect from 1 November. The reason for the revision of price limits (the so-called price caps) is significant fluctuations in the cost of electricity on the day-ahead, intraday and balancing markets, which were recorded by the Market Operator and Ukrenergo.
The main reasons for the price increase are the damage to critical infrastructure, which led to a decrease in generation, and the need to increase market liquidity to finance repairs and restoration. To stabilise the power system, it is necessary to increase electricity imports, which requires prices to be brought in line with neighbouring markets.
After the resolution is adopted, market participants will have the opportunity to submit their comments and suggestions to it.
How they want to raise prices for business
In the day-ahead market and the intraday market, marginal prices will be increased between 11:00 and 17:00. If now 1 MWh costs UAH 5,600, it is proposed to raise it to UAH 6,900, levelling the price to the morning peak.
The proposal looks like this:
- from 00:00 to 07:00 – 5600 UAH/MWh (currently 5600 UAH/MWh);
- from 07:00 to 17:00 – 6900 UAH/MWh (currently from 07:00 to 11:00 – 6900 UAH/MWh; from 11:00 to 17:00 – 5600 UAH/MWh);
- from 17:00 to 23:00 – 9,000 UAH/MWh (currently 9,000 UAH/MWh);
- from 23:00 to 24:00 – 6,900 UAH/MWh (currently 6,900 UAH/MWh).
The minimum price cap remains at UAH 10/MWh.
In the balancing market, the maximum price caps will not change:
- from 00:00 to 07:00 – 6600 UAH/MWh (currently 6600 UAH/MWh);
- from 07:00 to 17:00 – 8250 UAH/MWh (currently 8250 UAH/MWh);
- from 17:00 to 23:00 – 10000 UAH/MWh (currently 10000 UAH/MWh);
- from 23:00 to 24:00 – 8250 UAH/MWh (currently 8250 UAH/MWh).
The minimum price remains at UAH 0.01/MWh.
The National Commission considers it appropriate, in addition to revising the price caps for business, to ensure the introduction of the so-called import PSO (imposing special obligations on electricity market participants). This decision should be made by the Cabinet of Ministers.