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Energy Community ‘welcomes’ Ukraine’s reforms in price caps and cross-border trade with Slovakia

The Energy Community Secretariat has “welcomed” the decision of Ukraine’s National Energy and Utilities Regulatory Commission (NEURC) on price caps for the electricity spot market and an agreement between Ukrainian and Slovakian transmission system operators on the sharing of congestion revenues (14 July).

By its decision, the NEURC has increased the price cap and decreased the price floor on the day-ahead and intraday markets from 4000 Ukrainian hryvnias (97 euros)/megawatt-hour (MWh) to 5600 Ukrainian hryvnias (135 euros)/MWh (07:00-19:00), 7200 (19:00-23:00) and for floor from 2560 Ukrainian hryvnias (62 euros)/MWh (07:00-23:00) and 1380 Ukrainian hryvnias (33.50 euros)/MWh (00:00-07:00) to a single value of 10 Ukrainian hryvnias (0.20 euros)/MWh.

In the balancing market, the price cap changed from 120 per cent to 125 per cent of day-ahead market price, while the price floor remained unchanged.

“The Secretariat welcomes this step towards further liberalisation and concludes that its further revision is an indispensable condition for the full integration of the Ukrainian electricity market with the European Union’s,” the Secretariat said via a press release.

Convergence with the European power markets and prices will also allow for imports from other EU and non-EU countries, the Secretariat said.

The Secretariat also recommended that a strategy for further price cap liberalisation be developed to “reflect the sequence” of markets and include an automatic mechanism for adjustment of the price caps based on a transparent methodology.

Separately, following negotiations between the Ukrainian and Slovakian transmission system operators (TSOs), Ukrenergo and SEPS an agreement has been reached on the sharing of congestion revenues between the two companies.

The TSOs perform unilateral capacity auctions on the interconnector connecting their system.

The agreement will allow electricity exports from Ukraine to Slovakia to resume, which were halted on 21 April in the absence of an agreement on revenue sharing.

Ukrainian power markets operate at a lower price than those of EU countries, the Secretariat noted. Ukrenergo signed the agreement last Thursday (13 July) following approval by NEURC.

Going forward, Ukrenergo and the neighbouring TSOs will implement joint cross-border capacity auctions on all borders following recent regulatory changes, the Secretariat said.

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