DTEK calls for the continuation of reforms in Ukraine’s electricity market

During a company press conference, DTEK CEO Maxim Timchenko announced today that DTEK advocates for the introduction a comprehensive set of strategic measures to ensure the long-term and stable development of Ukraine’s energy industry ahead of its integration into continental Europe’s energy system in 2023.

According to Maxim Timchenko, the current crisis in the electricity market is a consequence of fundamental economic mistakes linked to arbitrary administrative interference in pricing. The industry has already accumulated a financial deficit of more than UAH 50 bln since the launch of the new market model in 2019.

“The debt increase in the power system has led to a reduction in repair expenditure and investments in the main equipment of both thermal and nuclear power generation. As a result, we are seeing an increase in accidents and a decline in the reliability of the country's energy supply. Despite criticism from the regulator and certain political actors regarding the unstable operation of TPPs this winter, DTEK remains the backbone of the Ukrainian energy system, said DTEK CEO Maxim Timchenko. The solution to these systemic problems lies in the creation of a professional management team capable of overseeing the development of the energy sector, the application of best practices from our European partners, the integration of the Ukrainian energy system into ENTSO-E, and the establishment of market approaches to pricing. Ukraine's integration into the European energy market will increase competition, reduce prices and improve the quality of services provided. However, the government must simultaneously continue to be vigilant and monitor the implementation of the integration plan between Ukraine and the EU’s energy systems”.

The deadline for the synchronisation of all activities between these two power systems is 2023. At the same time, parallel work with ENTSO-E throughout 2022 will be preceded by testing the operability and sustainability of the Ukrainian power system. During this period, Ukraine must demonstrate its ability to provide reliable energy supply without importing electricity. The results from this test will determine whether a switch to the parallel operation of the Ukrainian power system with ENTSO-E will be made.

According to Maxim Timchenko, Ukraine has come close to a critical point, when there is almost no time left to take action. In order for the country's energy system to be integrated into the European energy space, it is necessary to resolve a number of economic issues in today’s energy market:

• • Eliminate uncertainty in personnel policy by creating a professional team with supervisory powers in the relevant government departments.
• Pay off the debt of the State Enterprise "Guaranteed Buyer", which to date has exceeded UAH 24 bln to renewable energy investors.
• Forbid administrative interference by the regulator in the work of the market.
• pursue a consistent policy on tariff liberalisation, while paying attention to the need for balanced social support for consumers.

Consequently, addressing these issues will be imperative to protecting the long-term future of Ukraine’s energy market.