From July 1, 2019 many have had questions about possible changes in electricity prices and the Ukrainian Energy Exchange is ready to answer. The new approach to market pricing is associated with the beginning of the second phase of energy market reform, namely the energy wholesale sector. The Law of Ukraine "On the Electricity Market" came into force, which introduces a new market model.
Forming electricity price on the exchange before market reform
Previously the price of 1 MWh of electricity on the exchange for enterprises was formed based on the average indicators of electricity consumption in a particular region, regardless of what time of day the enterprise consumes electricity. The imperfection of this system is the formation of electricity prices through a single state regulator - the National Commission, which provides state regulation in the field of energy and the provision of composite services (NCREP).
Electricity price changes on the exchange after July 1, 2019
After come into force of the Law "On the Electricity Market", the conditions of activity of the participating companies changed. Prices for non-household consumers are formed based on the following indicators:
- volume of consumed electricity;
- calculation schedule;
- timely payment;
- volume of electricity consumption per one day.
A mechanism for the operation of special obligations in accordance with the PSO has also been implemented, which obliges producers, namely PJSC “Ukrhydroenergo” and NAEK “Energoatom”, to sell electricity to the population at prices which sagnifically below market prices.
But in the future the cost of all electricity generated by nuclear and hydroelectric power plants will be regulated by the market and companies producing electricity from coal or natural gas will not have to dominate the market and set prices.
Price for 1 MWh of electricity on Ukrainian Energy Exchange
An important component of the new market is the launch of electricity trade under bilateral contracts. In June 2019, the CE “Ukrainian Energy Exchange” was appointed as a temporary organizer of auctions and in September UEEX won the tender and is currently a permanent organizer of online auctions for the sale of electricity under bilateral contracts.
The current price for 1 MWh of electricity on the UEEX can be viewed on the website ueex.com.ua, going to the section "Exchange quotations: Electricity". Electricity quotations are constantly updated, according to the results of auctions. Recent trends show that the market is becoming competitive and relatively stable. Launching electricity trading in the market of bilateral contracts allows participants to be on equal terms.
Electronic auctions on UEEX contribute to the formation of a transparent and market price for electricity. This will allow businesses to objectively assess the market situation and make investment decisions. And for consumers - to choose the supplier who offers the best price.
To be able to participate in auctions for the purchase and sale of electricity, you must be accredited and meet certain requirements. Our Telegram bot will help you follow the new auctions.