Participation in the expert discussion "Ways to Stabilize the Ukrainian Energy Market"

April 28, 2023

The director of energy and infrastructure programmes of Razumkov Centre V. Omelchenko took part in the Energy Freedom expert discussion of the ways to stabilize the Ukrainian energy market held on April 21 and 27, 2023. The event was organized by the Energy Club — the most influential expert platform in Ukraine in the energy sector. 25 leading industry experts took part in the expert discussion: heads of specialized enterprises, people's deputies of Ukraine, government officials, representatives of non-governmental organizations.

In his presentation, V. Omelchenko, in particular, noted the deepening of the financial crisis in the electric power industry due to the inefficient operation of the current electricity market model. For instance, due to the loss of the ZNPP and the decrease in demand for electricity as a result of the Russian aggression, the key company performing the functions of the supplier with public service obligations (PSO) is unable to compensate for the difference in prices for the population, which amounted to about 130 billion hryvnias during the year.

As a result, the debt of the Guaranteed Buyer to universal service providers (UPS) as of April 20 of this year reached UAH 32.5 billion and has a tendency to grow, especially in the period of spring-summer repairs, when the sales of commercial products of NNEGC "Energoatom" will decrease 2.5-fold, compared to February. This will create a cascading increase in debts in all market segments and will raise the risks for the 2023–2024 winter season.

In order to overcome the crisis situation, V. Omelchenko proposed to start an urgent step-by-step transition to market prices for households, taking into account the available solvent demand and providing targeted monetary subsidies to the poor. It was also proposed to use an emergency financial instrument to fill the market with liquidity by issuing special “energy” domestic governmental bonds.