HOW COVID-19 AFFECTING THE ENERGY SECTOR IN UKRAINE
13/05/2020
The COVID-19 pandemic has caused an economic and social crisis around the world over the past few months, and Ukraine is not an exception. The pandemic has significantly affected all aspects of life, including the energy sector.:
- fall in electricity consumption by up to 8% compared to the same period last year;
- significant growth of electricity production from renewable energy sources;
- increasing non-payment by consumers;
- the quarantine period has become extremely unfavorable for the construction of "green" projects (ban on entry into Ukraine, delays in the supply of equipment).
At the end of April 2020, the Ukrainian authorities adopted a number of changes in the regulation of the electricity market in Ukraine:
1. On April 28, 2020, the Ministry of Energy and Environmental Protection approved a new Forecast Energy Balance of Ukraine to ensure:
- safe schedule of nuclear power plants (due to reduced consumption) and repair of NPP power units;
- reliable operation of the power system of Ukraine due to the lack of balancing capacity;
- sustainable operation of the coal mining sector due to the shutdown of most coal mines in Ukraine.
2. On 29 April 2020, the National Energy and Utilities Commission of Ukraine (NEURC) has approved a draft resolution on the implementation of RAB regulation and published it on its website for public discussions. Proposals to the draft resolution can be submitted by 1 June 2020.
3. On 30 April 2020, NEURC adopted changes to the Resolution No. 766 “On the Actions of Electricity Market Participants during the Quarantine Period and Restrictive Measures Related to the Spread of Coronavirus Disease (COVID-19)”, which entered into force on 30 April 2020.
Abovementioned changes to the Resolution No. 766 changed the conditions for the formation of price bids of the Guaranteed Buyer in the “day-ahead” market.
4. On 30 April 2020, Ukrainian parliament adopted in the first reading the Draft Law No. 2386 (“Draft Law”) on measures to pay off debt generated on the wholesale electricity market. The Law draft is designed to solve the issue of debt arising in the wholesale electricity market before the introduction of a new market in July 2019.
The Ukrainian Government hopes that the above measures will mitigate the effects of COVID-19 on Ukraine's energy sector.
This document provides general information on the subject and does not constitute a legal opinion or recommendation. Consulting a specialist is recommended before taking an action. No claim arising from the content of or relating to this document can be asserted against NAZALI.