Monitor of Electricity Market Opening 03/2019

Monitor of Electricity Market Opening 03/2019
October 14, 2019 Monitoring Reports

Ukraine opened its electricity wholesale market on July 1st 2019. This monitoring report is the third issue of an analytical publication series that covers the latest developments on the wholesale market for electricity in Ukraine and provides detailed data analyses of the market segments.

The main take-aways of the current issue are:

• Market regulations continue to adjust financial flows in the system putting under pressure Energoatom and Ukrhydroenergo, but potentially also renewables, e.g. if price caps will be – as being discussed – decreased. We see, that more and more electricity is traded at regulated prices – undermining the very idea of market opening.
• Ukraine’s electricity imports from Russia and Belarus continue to rise. We discuss the implications.
• In Burshtyn trading zone producers execute their market power and maximize their profits by switching volumes to the balancing market segment. This pushed average day-ahead prices to their highest levels since market opening.
• In the mainland trading zone, making more low-cost electricity available to the GB may have positively affected the liquidity on the day-ahead market, leading to price decrease during last 2 weeks. However, liquidity was slightly boosted by increasing RES output, and this positive effect might decrease in autumn-winter, as Ukrainian RES is mostly PV.
• Average prices, at which state-owned TPP operator Centrenergo sells on exchange are significantly lower than on organised segments. Press reports indicate that this low-cost electricity is mainly bought by one business group that also allegedly exercises some managerial control over the Centrenergo management.

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