On 31 May 2023, the National Energy and Utilities Regulatory Commission (NEURC, the Regulator) made an important decision regarding price regulation in the electricity markets.
The NEURC amended Resolution No. 332 dated 25 February 2022 (Resolution No. 332), which regulated the maximum and minimum price caps on the day-ahead market (DAM), intraday market (IDM) and balancing market. The amendments suspended the provisions of Resolution No. 332, which established the following price caps:
- The maximum prices for maximum load hours were 4,000 UAH/MWh, and for minimum load hours – 2,000 UAH/MWh.
- The minimum prices for DAM were 2,646.25 and 1,378.97 UAH/MWh for maximum and minimum load, accordingly. For DAM, the floor price was set at 102% of the DAM price determined for each billing period. The Guaranteed Buyer also had to take this price into account when submitting bids for the purchase of electricity on the intraday market.
- For the balancing market, the maximum price cap was 120% of the DAM price.
When making the decision, market participants stated that the price caps did not allow them to engage the necessary volumes of electricity imports to cover a possible shortage in the summer.
In justification of the Resolution, the NEURC stated that it is currently working on setting new price caps in accordance with the Methodology for Determining Significant Price Volatility and Setting Price Caps on the DAM, IDM and Balancing Market. The Regulator approved this Methodology by Resolution No. 1221 dated 27 September 2022. According to the Methodology, the NEURC must receive proposals from NPC Ukrenergo, JSC Market Operator and the Ministry of Energy of Ukraine. The NEURC is currently awaiting proposals from the relevant ministry.
The Resolution will enter into force on 30 June 2023.
For more information, please contact Asters Partner Yaroslav Petrov and Junior Associate Marko Malinovskyi.
