Ukraine moves toward EU-style negative electricity pricing: key implications for investors
NEURC is proposing significant amendments to the Day-Ahead Market (DAM) and Intraday Market (IDM) Rules to introduce a mechanism for negative electricity pricing, in line with Law No. 4834-IX implementing European rules on energy market integration. The proposals would also introduce a new settlement tool – a "service to incentivise electricity consumption" – together with a netting mechanism.
Key change: negative and zero prices
The draft NEURC Resolution expressly provides that electricity prices on the DAM and IDM may be:
In practice, however, electricity will not be traded at a negative commodity price. Instead:
- electricity will be sold at the minimum permitted positive price
- the buyer will simultaneously provide the seller with a separate "service to incentivise electricity consumption" in an amount reflecting the negative component of the price
Economically, this structure achieves the effect of a negative price without requiring electricity to be sold at a negative value.
Practical significance for electricity generation
For electricity producers, particularly renewable generators, this means that during periods of surplus generation a producer may effectively have to pay to inject electricity into the system.
Similar mechanisms have long been used in EU markets. They are designed to:
- encourage flexible consumption
- support the development of energy storage
- reduce overgeneration
- enable market-based curtailment during low-demand periods
New financial security mechanism
The draft establishes specific rules for bids submitted at negative or zero prices.
For buyers
If a buyer submits a bid at a zero or negative price:
- the buyer will be deemed to purchase electricity at the minimum positive price
- a zero price will be used to calculate the buyer’s required financial security
For sellers
If a seller submits a bid at a negative or zero price:
- the seller must ensure in advance that it has sufficient funds to pay for the consumption-incentive service
- the relevant amounts must be deposited into an escrow account before trading begins
This is intended to reduce the risk of settlement defaults during periods of negative pricing.
Introduction of netting
The draft introduces the concept of "DAM/IDM netting" for the first time. This means the set-off of mutual claims between the Market Operator and a market participant.
Netting should allow parties to:
- reduce the number of reciprocal payments
- lower liquidity requirements
- simplify settlements between the parties
- settle electricity and consumption-incentive services on a net basis
The draft envisages separate documents, including:
- netting statements
- set-off certificates for mutual claims
- automated calculation of the net balance of obligations
New documents and reporting
The Market Operator will generate additional documents, including:
- statements showing the value of consumption-incentive services
- acceptance certificates for those services
- netting certificates
- VAT calculations for the relevant transactions
All documents will be signed using a qualified electronic signature.
Impact on settlements and VAT
The draft sets out detailed rules on:
- how the value of the consumption-incentive service is determined;
- how VAT is charged
- how settlements between the Market Operator and participants are made
- how consumption-incentive services are reflected in certificates and payment documents
Particular attention is given to ensuring that the negative-pricing mechanism is compatible with existing tax legislation. Tax treatment was also one of the key issues discussed during consultations with market participants.
When the amendments will take effect
Although NEURC has endorsed the concept of negative pricing, the draft provides that the Resolution should take effect:
- when single coupling of the DAM and IDM with EU markets becomes operational; but
- not earlier than the day after the Resolution is officially published.
At NEURC’s meeting on 14 September 2026, market participants emphasised that negative pricing should be introduced in parallel with:
- market coupling;
- the introduction of relevant technical price limits; and
- the resolution of tax and PSO-related issues.
Key takeaways for clients
- Ukraine is close to completing the regulatory framework for negative electricity prices, following an EU-style model.
- The amendments are expected to have the greatest impact on renewable energy projects, traders, suppliers and energy storage operators.
- Market participants will need to adapt their contracts, billing systems, financial security procedures and tax accounting to the new category of consumption-incentive services.
- Introducing negative prices is an important step in integrating Ukraine’s electricity market with the European market and is relevant to international support programmes for Ukraine.
For further information, please contact Asters Partner Yaroslav Petrov or Senior Associate Tetiana Piskun.
