Ukraine Electricity Markets June 2021

1. RENEWABLES
IN UKRAINE - 2021
The GoU approved Ukraine’s strategy on energy markets - 25% of
RES in total primary energy supply until 20351)
. Previously the target
set to 11% of electricity utilization for 2020, including large hydro.
1)
http://mpe.kmu.gov.ua/minugol/control/uk/doccatalog/list?currDir=50358,
2)
Own estimation of Ukrainian Association of Renewable Energy,
3)
Own monitoring of Ukrainian Association of Renewable Energy,
4)
https://www.gpee.com.ua/main/news?id=342,
5)
https://www.nerc.gov.ua/
Investments in RES decreased in 2020 significantly from 4.1
bln USD in 2019 to 1.4 bln USD in 20202)
. Total investments
conducted from 2010 until 2020 - >12 bln USD.
Since 2019 until May 2021 seven top managers, ministers or
acting-ministers were changed at the Ministry of energy of Ukraine3)
.
Existing administrative price-cap regulation and the
pro-households cross-subsidy policy restrict perspectives
of RES development and improvement of balancing market.
The GoU’s draft Law #5600 defines axcise for electricity
generated from RES - this is ad-hoc measure for“solving the
debt crisis”. The solution is poorly designed and is not in
common with practise.
The debt crisis in Ukraine electricity market is not
RES’specific. Guaranteed buyer owes 16,5 bln UAH
(34% of RES sales) for electricity generated in 2020,
as of 1 June 20214)
.
As of 1st April 2021, there are 961 companies among RES
operating 1478 RES power plants representing 8004 MWt of
installed capacities5)
. Households operate > 779 MWt as of
1st January 2021.
RES is vastly misunderstood in society due to opponents’
media activities and disinformation campaigns.
Court case is in the process regarding the constitutionality
of the RES feed-in-tariff. The case is negativelly
influances the business climat. Second case filed to the Antitrust
Committee of Ukraine that feed-in-tariff should be defined as
state direct financial aid which is not affordable.
Source: Energy Efficiency Agency of Ukraine, Ministry of Energy Source: UARE’s own estimation
Minister,
Nasalyk Ihor
04(16Y) – 08(1Y)
Minister,
Orzhel Oleksiy
08(19Y) – 04(20Y)
Acting minister,
Shubin Vitaliy
03(20Y) – 04(20Y)
Acting minister,
Buslavets Olha
04(20Y) – 11(20Y)
Acting minister,
Boyko Yuriy
11(20Y) – 12(20Y)
Acting minister,
Vitrenko Yuriy
12(20р) – 04(21Y)
Minister,
Herman Halushchenko
04(21Y) – current
Source: UARE’s own observation
961
companies
1478
power plants
16,5
bln UAH
of debt to
RES from 2020
MAJOR ELECTRICITY MARKET INDICATORS
347,43
312,14
116,54
116,54
116,54
116,54
155,40
155,40
155,40
155,40
155,40
155,40
155,40
240,23
240,23
240,23
240,23
312,76
293,93
293,93
293,93
293,93
TSO tariff of NEC Ukrenergo incl. pay to RES,
uah per 1 MWh
1500
2000
2500
3000
3500
4000
4500
Average of prices for electricity for non-households, uah/ MWh
max avg min
11
8
11
13
15
14
19
6% 5% 7% 8% 9% 9% 12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
2
4
6
8
10
12
14
16
18
20
2014 2015 2016 2017 2018 2019 2020
bln
kWh
bln kWh (left axis) RES share (PV, Wind, Hydro) , %
0,8
1,7
2,9 3,5 3,7 3,8 4,0 4,3
6,7
10,8
12,3
0,8 0,9 1,2 0,6 0,2 0,1 0,2 0,3
2,4
4,1
1,4
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
bln
USD
Investments accumulated, bln USD Investments annually
Source: the regulator
Source: DAM, Market Operator, the regulator, incl. VAT