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The European Business Association calls on the National Energy and Utilities Regulatory Commission of Ukraine (NEURC) to review the level of price caps in the organised segments of the electricity market and set them at an economically justified level<\/strong> that reflects the actual needs of the energy system ahead of the heating season.<\/p>\n According to members of the Association\u2019s Energy Committee, the current approach to price caps should be reviewed in light of the need to attract electricity imports from the EU, develop new flexible generation capacity and ensure the effective functioning of the balancing market.<\/p>\n One of the key issues is the ability to attract imports during periods of shortage.<\/strong> If electricity prices in interconnected European markets exceed the price cap set in Ukraine, commercial electricity imports may become economically unviable. In such a case, the technical capacity to import electricity exists, but market conditions do not allow it to be used to its full potential.<\/p>\n This is particularly relevant during the winter period, when prices in European markets may vary significantly depending on weather conditions, natural gas prices and the balance of supply and demand. Therefore, price cap levels should leave sufficient room for imports precisely during the hours when the energy system needs them most.<\/p>\n At the same time, it is important to create appropriate conditions for the development of new flexible and distributed generation<\/strong>, including gas piston, gas turbine and cogeneration units. Such facilities can rapidly increase electricity generation during periods of high demand, which is essential for balancing the system.<\/p>\n However, attracting private investment in flexible and distributed generation projects requires a market model that allows generation facilities to operate economically during periods of shortage. According to the Association\u2019s experts, price cap levels are among the factors that directly affect the economics of gas-fired generation and the investment attractiveness of new capacity.<\/p>\n The situation in the balancing market further highlights the need to review the approach to price caps. During the first ten days of September, the price of balancing electricity for upward regulation reached the current maximum price cap in certain hours. This dynamic may indicate that the existing price ceiling limits further price formation and the mobilisation of additional supply during periods of high demand.<\/p>\n The Association also draws attention to the European integration dimension<\/strong> of the issue. Ukraine\u2019s energy system has been synchronised with ENTSO-E since 2022, while the next step should be full commercial integration with the EU internal energy market and the introduction of market coupling. Therefore, the approach to setting price caps should gradually move closer to the European model and avoid creating additional barriers to cross-border trade, electricity imports and the development of new generation capacity.<\/p>\n <\/p>","protected":false},"excerpt":{"rendered":" The European Business Association calls on the National Energy and Utilities Regulatory Commission of Ukraine (NEURC) to review the level of price caps in the organised segments of the electricity market and set them at an economically justified level that reflects the actual needs of the energy system ahead of the heating season. According to […]<\/p>\n","protected":false},"author":33544,"featured_media":777335,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false},"categories":[4,5,22],"tags":[],"yoast_head":"\n