USAID recommends introducing the “Safe Mode” to open the wholesale electricity market

The USAID Energy Security Project (ESP) works with the Government of Ukraine, the private sector and community activists to improve the energy security of Ukraine and transform the energy sector of Ukraine into a modern, market-oriented and EU-integrated growth factor.

USAID gathered key stakeholders to discuss the latest preparations for the opening of a reliable wholesale electricity market in the time provided by law –  July 1, 2019.

Representatives of central executive authorities, national regulators of the energy and stock markets and participants in the electricity market gathered at a round table to discuss the degree of readiness of the segments of the wholesale electricity market, namely the bilateral contract market, the day ahead market and the balancing market.

Participants discussed risks for the effective functioning of the market after the opening on July 1. Additional work is needed to prepare the regulatory framework, IT systems, commercial accounting, and financial guarantee mechanisms. Given that only a few generation enterprises are on the market, there is also a risk that such a concentration of market weight may lead to an increase in electricity prices for consumers.

“We support the delay of the wholesale electricity market launch for three months and its launch in “Safe Mode” in order to limit the risks associated with market concentration and insufficient commercial metering. Safe mode will help to ensure a reliable supply of Ukrainian consumers of adequate quality at reasonable prices”, said USAID Senior Adviser on Energy Issues, Sukru Bogut.

The functioning of the wholesale electricity market in the “Safe Mode” means the opening of a market with certain restrictions during the transition period aimed at minimizing financial and technical risks.

International experts emphasize that the restrictions of the “Safe mode” should not impede competition or new, qualified participants to enter the market, as this will create equal conditions for all market participants and transparency of the market.

Source: kosatka.media

Tags: The Cabinet of Ministers, contracts, legislation, electricity, electricity market, foreign affairs

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