Ukraine approves new law to make energy market more competitive

Ukraine`s Parliament (Verkhovna Rada) has approved the Law of Ukraine On the Electricity Market which introduces a series of reforms to liberalize the country’s energy market.

According to its promoters, the law No. 4493 will create more market-oriented relations between all players in the energy market and will enable end consumers to buy power from several providers.

The Energy Community, which is an international organization consisting of the EU and several non-EU eastern European countries including Ukraine, and aiming to extend the EU’s internal energy market to southeastern Europe and the Black Sea region, has welcomed the approval of the new law, claiming it was a necessary step to bring the Ukrainian legal framework into compliance with the requirements of the European Union’s Third Energy Package, which came into force in September 2009.

The European Union approved the disbursement of €600 million in assistance to Ukraine in mid-March. The loan is part of a €2.81 billion Macro-Financial Assistance (MFA) program to Ukraine, which is expected to sustain the implementation of a wide-ranging structural reform agenda, including the reform of the energy market.

The Ukrainian Association of Renewable Energy (UARE) has welcomed the new law claiming it has always supported the introduction of market principles and a more effective mechanism of the market.

“However,” said Irina Krymus from UARE, “it is important to keep state guarantees to stimulate renewable energy development and they are saved in new Law of Ukraine On the Electricity Market adopted last week. We carefully look at such new required elements of the new market as the introduction of imbalance cost, but hope for their effective implementation, taking into account the current limited (1.25 % RES share) development of renewable energy in Ukraine.”

Ukraine is currently implementing a FIT scheme for solar. Feed-in tariffs are set at €0.1599 ($0.1726)/kWh for ground-mounted solar power plants commissioned in 2016 and €0.1502 ($0.1621)/kWh for projects connected between 2017 and 2019.

The country’s cumulative installed PV power reached 530.8 at the end of 2016. Local agency SAEE predicts 150 MW of new PV installations for 2017, while the association UARE expects between 300 MW and 400 MW.