UEEX’s mission is to create a reliable, transparent and efficient trading mechanism - Oleksii Dubovskyi

Chairman of the Exchange Committee Oleksii Dubovskyi gave a long interview to Interfax, in which he spoke about the signing and implementation of a Memorandum on the development of a gas exchange based on the UEEX, assessed the impact of the latest legislative changes on the activities of commodity exchanges and shared plans and achievements for the development of new directions and instruments of the UEEX. In the interview, they talked about the situation on the energy markets, in particular about the changes in the conditions of the PSO on the electricity market, as well as the possibility of further liberalization of the gas market.

Thus, Chairman of the Exchange Committee said that the EBRD and the Energy Community initially considered the idea of attracting foreign companies to create a gas exchange in Ukraine. However, the rapid development of UEEX has demonstrated that such an exchange is already present in Ukraine and most of the work has already been completed. Then it was decided to support the development of a competitive and liquid market based on the UEEX. This intention became the basis for the Memorandum signed this summer.

A big step has already been taken in its implementation – UEEX has opened trading in natural gas in the direction of Daily balancing, to which the GTS Operator of Ukraine is to join soon.This instrument gives to the natural gas market participants the opportunity to independently resolve the imbalances that arise. The development of this market segment will contribute to the liberalization of the industry and will create a reliable market benchmark for gas prices in Ukraine.

The basis for the development of exchange trading in Ukraine was laid by the adoption of Law №.2284, which defined the concept of derivative, forward and clearing.

“These are exchange-traded instruments that are used all over the world, which give energy markets the opportunity to operate more flexibly, is reflected in the price of energy for buyers. This is a signal of transparency and attractiveness of the market for investors,"- Dubovskyi underlined.

In the understanding of the newly adopted Law, UEEX is already offering clearing services to trading participants by clearing obligations and applying mechanisms of guarantee collateral, compensation and fines.

Currently, work is underway to develop instruments in the derivatives market, namely forward contracts. Options and futures contracts are in development, as well as new risk hedging instruments.

Oleksii Dubovskyi positively assesses the changes in the liberalization of the electricity market, although some problems that aggravate its work remain unresolved. In particular, the accumulation of debts and the imperfection of the PSO mechanism.

There is a positive trend in the market of bilateral contracts, which operates at UEEX: “Companies have begun to more actively use the new instruments offered by UEEX. Recently, state-owned enterprises have received this opportunity. The participants began to conduct auctions in the coefficient trading mode (formula pricing). There is high competition in the auctions of state generation. The number of buyers at auctions reaches several dozen, the auctions are held in anonymous mode, last for several hours, ensuring the formation of a reference and transparent price."

In the future, UEEX will focus on the development of markets that have an upward trend. First of all - electricity and gas. The mission of the exchange is to provide a reliable, transparent and efficient trading mechanism.