On 30 September, the National Energy and Utilities Regulatory Commission (hereinafter - NEURC) amended the Transmission System Code regarding the legal regulation of battery energy storages (hereinafter - BES). The amendments were introduced by the Law of Ukraine No. 2046-IX "On Amendments to Certain Laws of Ukraine on the Development of Battery Energy Storages", which entered into force on 16 June 2022.
The amendments establish:
- the procedure for the connection, installation and operation of the BES
- the ability of the transmission system operator to own, possess, use, develop, manage or operate the BES
a) the procedure for the connection, installation and operation of the BES
BES can be connected to the transmission system at the voltage level of 110 kV and above, the nominal installed capacity of which exceeds 20 MW and installations at the voltage level of 110 kV and above with capacity of 20 MW or less in accordance with the feasibility study.
The amendments also provide for tests to be carried out by the BES operators to confirm compliance with the requirements of the Transmission System Code. After such tests, a report and simulation models should be submitted to the transmission system operator (hereinafter - TSO). The TSO has the right to conduct its own simulations of the compliance of installations based on the reports and measurements submitted by their operators.
The procedures for connecting are different for BES with different capacities.
If the BES with a capacity of less than 1 MW is connected to the internal power supply networks, the operator must submit to the TSO a notification with the relevant annexes. After that, the TSO executes the transmission point passport within 5 business days.
In the case of connection of BES with a capacity of more than 1 MW to the internal power supply networks, the operator needs to develop a design task, which is submitted to the TSO. After that, the TSO approves the design documentation in terms of the requirements that were provided to the BES operator when approving the design task. Then, a generalized technical decision is provided based on the results of the review of the design documentation. The TSO should inspect the installation free of charge for compliance with the agreed design documentation upon receipt of the notification of the installation and connection of the BES. If there are no remarks, the TSO issues a transmission point passport within 5 business days from the date of the inspection report.
Operators and TSO conclude an agreement on the provision of services for dispatching (operational and technological) management. NEURC approves tariffs of payment for such services.
b) the ability of the transmission system operator to own, possess, use, develop, manage or operate the BES
The amendments to the Transmission System Code provide a clear algorithm for TSO to own BES. This is due to the statutory licensing limitation for power transmission. The TSO submits a request to the NEURC for consent to own such installations. The regulator notifies the Energy Community Secretariat of the approval of such request.
In this case, the NEURC hold public consultations at least once every 5 years on the existing BES to assess the interest of other parties in investing in such storages. Such public consultations do not apply to storages that are fully integrated elements of the TSO network and are not used for balancing or congestion management.
If other parties do not show interest in investing in the BES, the TSO retains the right to own the storages at least until the next public consultation.
If the NEURC establishes that other parties are interested and able to invest and develop the BES, the TSO should organize an auction for the sale of its installations.
The introduction of such amendments to the Transmission System Code will improve the development of the electricity market in Ukraine.
For more information, please contact Asters' Partner Yaroslav Petrov.
