NEURC meeting dedicated to price caps on electricity

June 09, 2023

On June 8, 2023, Razumkov Centre Energy and Infrastructure Programmes Director V. Omelchenko took part in a discussion of the issue at an NEURC meeting dedicated to setting price caps on electricity.

At the meeting, the Commission adopted a draft decision to approve the price caps in accordance with the current Methodology, approved by the NEURC in accordance with the Law "On Electricity Market". These decisions of the Regulator, according to the NEURC members, are intended to promote liberalization of the electricity market. They must provide conditions for predictable and financially balanced operation of all market participants, taking into account the current situation in the energy system and the market as a whole.

In his remarks, V. Omelchenko expressed the opinion that the current model of price cap setting does not correspond to the EU model, as it suppresses the development of the market and does not serve as a safeguard against price spikes. In addition, the level of price caps for electricity in the Ukrainian model is by two orders of magnitude lower than the price caps in the EU.

This problem creates market distortions that lead to critical losses for energy companies and complicates market synchronization with EU countries. It also significantly complicates the trade in electricity in the conditions of the need to cover the deficit in certain hours. V. Omelchenko offered to correct these flaws when making the final decision on price cap setting.

The meeting was attended by members of NEURC, heads of large industrial enterprises, representatives of the generating sector and a people's deputy of Ukraine.