Expert: Start of daily auctions attracted new investors to the electricity market

Last Friday, the experts of the electricity market has presented a National regulatory Commission of energy and utilities (NKREKU) and “Ukrenergo” project methods of calculating cross-border capacities in Ukraine. Developed in cooperation with the Energy community in the framework of ЕU4Energy new technique designed to ensure effective cross-border trade and the effective integration of electricity markets in the country.

Most experts agree that the approval of the national Commission methodology will help in the implementation of the adopted by the deputies in the last year of the Law on electricity market. The program EU4Energy and international organization Energy community to help Ukraine and other countries of the EU’s neighbours to reform their wholesale electricity markets and their integration into the European energy market. And help effectively. The adoption of the methodology will allow Ukraine to take another step towards this integration.

The reform of the Ukrainian electricity market, which was launched a few years ago, is already beginning to yield very specific results. One of the undoubted achievements of the reform — the launch of “Ukrenergo” e-auctions for bandwidth export section. Start auctions allow the introduction of a dedicated IT platform for their implementation, which is set and implemented by the Czech company Unicorn Systems– it system operator has been successfully used for nearly two years. According to the management “Ukrenergo”, this year was unique, in terms of turnover resulting from auctions. Only the results of the annual auction revenue amounted to 300 million UAH.

Extremely important is the fact that the market has finally started daily auctions, whereby the proceeds from the sale of the section also increased. Historically in Ukraine for private companies — exporters of electricity first work permit system, then began the annual and monthly auctions in manual mode. Due to the fact that they took place well before the delivery, companies have traditionally taken into account in his price risks. That is, the price of 1 MWh, the annual auction has always been the lowest possible, on a month — slightly higher, but the company still could not pay much. To participate in monthly auctions could only afford the major vendors, and smaller companies were not able to enter the market.

Run daily auctions allowed to enter the market of the mass of new exporters that have significantly increased the level of competition in it. And, of course, the average price of 1 MW h-section have significantly increased, which has transformed into additional income “Ukrenergo” and the state. Since the money obtained from the auctions of energy can’t send to anything other than network development, direct investment in domestic energy has increased significantly.

Implemented “Ukrenergo” is a specialized IT platform of the company Unicorn Systems while expanding its functionality in the short term will allow you to run another strategically important direction for the market — the so-called joint auctions. They can start as early as 2020. Today the lines of energoparitet to the border is owned and distributed “Ukrenergo”, and outside — system operators of neighbouring countries. Accordingly, the exporter of electricity, for example, in Slovakia needs to by cut for the state-owned company, and its counterparty — the Slovak operator. System, to put it mildly, is inefficient, because the auctions of our countries are practically not related to each other . Europe has long been came to the conclusion that the operators agree with each other and bandwidth is allocated one of them on behalf of the two.

The adopted Law on electricity market joint auctions spelled out. Unfortunately, they still don’t start because of problems with the adoption of by-laws. Their rules need to negotiate not only with all our suppliers, and operators of the neighboring countries as well. Now the process is postponed at least a year, but inevitably will be over.