In March, at UEEX 11 companies auctions initiators formed 248 starting positions. Moreover, the number of starting positions in the commercial sections in the IPS of Ukraine has already exceeded the indicator for other sections and shows a growing interest of market participants to new opportunities offered by UEEX. Two auction sessions were also held, in which Energoatom-Trading and Ukrhydroenergo realized 5.36 million MWh of electrical power in accordance with the PSO.
The participants in the sections for buying and selling electrical power on market prices at UEEX were active. For example, on March 25, a new participant - Petroimpex Company - managed to sell 4843 MWh of base load for the first time. In March, the State Ukrhydroenergo, Kaluga TPP-Nova and Centrenergo sold a total of 1.62 mln MWh of electricity the IPS of Ukraine and Burshtyn Energy Island in accordance with Art. 66 of the Law "On Electric Power Market".
Both sale and for purchase auctions were successful. Thus, on March 19, the Guaranteed Buyer purchased the base load on the territory of Burshtyn Energy Island.
Sale prices were in a fairly wide range, depending on the type of sales schedule and trade zone. Thus, in the IPS of Ukraine the average weighted sale price varied from 959 UAH to 1550 UAH, and in the territory of Burshtyn Energy Island - from 1351 UAH to 2000 UAH/MWh, its traditionally higher from BCM in IPS of Ukraine.
On March 25, Energoatom-Trading for the first time initiated an auction to sell electricity at free prices, but then it was not possible to form a weighted average selling price. The next successful auction was held on April 1. According to its results, the company realized 133 thousand MWh of base load at the price of 1255 UAH.
It should be noted that Energoatom-Trading is not the first company that realized significant volumes of base load on UEEX. Thus, since the beginning of the year 479 thousand MWh of base load have been sold in the IPS of Ukraine. Of these, 60% of the volume falls on Centrenergo, and 29% is the volume that was sold by Energoatom only for the first successful trading session.
Average sales prices of base load electric energy of two companies, Centrenergo and Energoatom Trading, are almost identical and amount 1247.52 and 1247.93 UAH/MWh respectively. Growth of sale price of Energoatom Trading can be explained by the day-ahead market price increase in March. UEEX welcomes the growth in sales of the base load at auctions, because this is the main type of diagram, which should be realized under long-term contracts.
In March, the total generation of electricity, as well as some of its types, was steadily declining due to the decline in industry and the introduction of quarantine measures. Thus, for example, the total reduction over the four weeks of the month reached 2 GW - as of Sunday, March 29, the generation was 15.5 GW. NPP and TPP were most "affected" in this case.
However, electricity supply from renewable energy sources has increased record-breakingly due to the increased duration of the daylight hours and favorable weather conditions in general. Thus, "green generation" gradually replaced nuclear and thermal power from the market. And with the advent of spring, RES production will increase, which may lead to aggravation of existing problems.
In March, the situation in the trading zones was significantly different. Thus, during the month the price in the IPS of Ukraine was stable. The average price in the IPS of Ukraine was 1377.06. Only at the end of March, the weighted average price significantly increased, namely - to 25%, apparently due to the fact that Energoatom, limited the supply of electricity to Guaranteed buyer for the needs of the PSO, realized a certain amount of electricity in the day ahead market at higher prices.
In the territory of the Burshtyn Energy Island prices fluctuated in a very wide range. The average weighted price changed from 423 to 1844 UAH per MWh. The average price was 1496 UAH per MWh.
In March, compared to February, the weighted average price in the IPS of Ukraine increased by 11%, on the territory of the Burshtyn Energy Island decrease was 5%.
There was a surplus of electricity in both trading zones. Moreover, there was a surplus in the IPS at all hours of the day, and in the trade zone of the Burshtyn Energy Island there was deficit at night.
In terms of trade volumes, there was a steady downward trend. Thus, with the delivery on March 31, on DAM agreements on the purchase and sale of 106.6 thousand MWh on the IPS of Ukraine and 8353 MWh on the territory of Burshtyn Energy Island were concluded.
Spot prices in Western Europe have been generally volatile over the past month and there has been a downward trend. Thus, as of April 2, the price of basic electrical energy in France was 21.86 euro/MWh, in Hungary - 31 Euro/MWh, in Poland - 28.57 euro/MWh. As of April in March, electrical energy was traded at prices in the range of 16-42 euro/MW-hour. As of May in April it was 15-34 euro/MWh. By the end of the month, electrical energy prices in Europe continue to fall, most of all in countries where quarantine measures are strict enough. The COVID-19 outbreak led to a sudden and unprecedented decline in demand for electricity in Europe and stoppages of most energy-intensive companies.
Electrical power prices on European hubs, Euro/MWh.
During the last month, there were about 230 tenders for the purchase of electricity by public institutions. In general, electricity was purchased in the amount of 1.1 billion UAH. Price fluctuations were pronounced, especially in major tenders. But in general, the average price was 1.63 UAH / KWh. The largest contract was received by the company LLC "Kherson Regional Energy Supply Company". It will supply 6.3 million KWh of electrical energy to Chaplyn Water Management Department at the initial price of 1.72 UAH/kWh. The prices varied from 1.10 to 2.36 UAH/kWh.
TSO / DSO can buy electrical power for PTC at electronic auctions. According to the legislation, the TSO / DSO has the right to buy electricity under bilateral contracts in order to compensate for the technological consumption of electrical energy for its distribution, except for the volumes that are subject to mandatory purchase on the day-ahead market. According to the latest changes in the PSO, TSO / DSO shall buy electrical energy to cover its technological losses on the free market. At the same time, market participants have the right to freely elect counterparties under bilateral agreements, to enter into agreements in any form and on terms to be determined by agreement of the parties, including using the mechanism of electronic auctions, the functioning of which is provided by CE "Ukrainian Energy Exchange" and which fully comply with the principles of fair competition, non-discrimination of participants, objectivity and impartiality.
NERC approved the Rules for Management of Restrictions on Distribution of Interstate Crossing for Electrical power Export / Import and the Procedure for Distribution of Interstate Crossing Capacity on April 3. The rules provide for the auction office work, the function of which will be performed by NAEC "Ukrenergo". Access to cross over can be obtained either by purchasing a lot at an auction, or in case of dismissal - without an auction. Reduction of cross over capacity is possible only in the following cases: emergency repair of power lines to ensure operational safety of the network, force majeure and at the request of the neighboring transmission system operator. During the auction, bidders compete in the price they offer for the cross over. If the demand for cross over exceeds the capacity, the highest bidders will get the cross over. If the demand is equal to or less than the bidded crossing, then the cross over is provided free of charge.
USAID Energy Security Project (ESP) reviewed the draft resolution of the Cabinet of Ministers of Ukraine, which provides for liquidation of SE "Guaranteed Buyer" and determines SE "National Atomic Energy Generating Company Energoatom" as a guaranteed buyer of electricity from May 1, 2020. ESP reports that an in-depth analysis of industry practices and current legislation conducted by ESP’s analytical team shows that the hasty liquidation of SE "Guaranteed Buyer" and provision of guaranteed buyer functions to SE "Energoatom" will have very serious consequences for the functioning of the wholesale electrical power market. It can lead to market crash and impossibility to perform special duties (PSO), especially taking into account that the electric energy market is in a critical period as a result of corona virus pandemic.
Coal stocks at warehouses