some-alt
DTEK
About DTEK
Go to: About DTEK Mission, vision, values New strategy 2030 History Contact us Privacy policy Cookie Policy
#FightForLight Standing with Ukraine Our people Awards and Recognitions
Our businesses
Go to: Our businesses DTEK ENERGY DTEK RENEWABLES DTEK OIL&GAS DTEK GRIDS DRI
MODUS X Academy DTEK D. TRADING D. SOLUTIONS
Sustainability
Go to: Sustainability Our sustainability journey Investing in green Environment Standing with Ukraine Our people Governance Policies
Investors
Go to: Investors Governance Sustainability Reports
News and Insights
Go to: News and Insights Media releases DTEK and Fluence project In the media Image library Video library Contact us
Careers
Go to: Careers DTEK community Jobs
Toggle High Contrast
EN
UA
Home page News and Insights Media releases

Media releases

  • Home page
  • News and Insights
  • Media releases
  • DTEK considers the incentive tariff setting methodology adopted by the Regulator inconsistent with the best European practices
27 August 2020, Ukraine
DTEK considers the incentive tariff setting methodology adopted by the Regulator inconsistent with the best European practices
PDF version
Download
download
Subscribe to our news linkedin
DTEK considers the incentive tariff setting methodology adopted by the Regulator inconsistent with the best European practices

DTEK has always stood up and will be standing up for the European choice made by Ukraine, a market-conscious, transparent and fair operating environment, and a level playing field for all market players. Implementation of the European incentive tariff setting model would allow Ukraine to attract investments into its power grid infrastructure, improve energy supply quality, and reduce network losses. It would have a positive impact on the investment climate, strengthen the energy security and facilitate further transformation of Ukraine’s energy sector. The methodology proposed by the National Energy and Utilities Regulatory Commission (NEURC) lacks economic incentives for investments, which the market participants and experts were looking for. It calls into question whether it makes sense for DSOs to switch to the incentive tariff setting system and casts doubts upon the prospects of successful infrastructure refresh and connection cost reduction.

On 26 Aug. 2020, the state Regulator (NEURC) adopted the Incentive Tariff Setting Method splitting company assets into the ‘old’ base with a 3% rate of return and a ‘new’ base with a 16.74% rate of return. As part of public discussions, market players and industry experts repeatedly provided economic calculations and justifications based upon the international experience and current state of the industry.

The Regulator failed to fully incorporate the market’s position and experts’ opinion. The adopted approach goes against the European practices used to implement the incentive-based tariff setting model, which does not create opportunities to raise external financing for asset upgrades and move upwards in the Doing Business rating on the back of cheaper customer connections.

For many years, Ukraine has been using the ‘Cost+’ system, which kept the level of investment in 1 km of grid in Ukraine down to USD 230/km, in contrast to USD1,500 - USD 3,000/km in European countries. This resulted in an 80% wear of the infrastructure of distribution system operators in Ukraine (DTEK’s distribution system operators: 70 - 75%). The required amount of investments for full renovation and upgrade of the grids is estimated at USD1,000 - USD1,200/km, while the methodology proposed by the NEURC limits investments to about USD450/km.

Enhancements and upgrades of the distribution grids are key to ensuring economic development and further transformation of the energy sector. Effective reforms of the tariff setting system lay down the foundation for grid infrastructure development.

DTEK has always stood up and will be standing up for the European choice made by Ukraine, a market-conscious, transparent and fair operating environment for all market players, and a level playing field for everyone. DTEK is confident that the incentive tariff setting system based on the European model can be implemented in Ukraine, and economic tools can balance out the interests of businesses and consumers.

All news
All news
DTEK and Fluence battery storage
10 July 2025
DTEK and Fluence start commissioning phase of Ukraine’s largest battery storage ...
"Our energy powers life": DTEK updates its mission, vision, values and logo to mark the company’s 20th anniversary
08 July 2025
"Our energy powers life": DTEK updates its mission, vision, values and logo to ...
Read DTEK CEO Maxim Timchenko's all-staff message marking 20 years
06 July 2025
Read DTEK CEO Maxim Timchenko's all-staff message marking 20 years
DTEK: Two decades of transformation and investment in Ukraine’s energy security
06 July 2025
DTEK: Two decades of transformation and investment in Ukraine’s energy security
Stay Connected
Find press contacts, images, and information for the news media
E: pr@dtek.com
DTEK
About DTEK
Mission, vision, values New strategy 2030 History Contact us Privacy policy Cookie Policy #FightForLight Standing with Ukraine Our people Awards and Recognitions
Our businesses
DTEK ENERGY DTEK RENEWABLES DTEK OIL&GAS DTEK GRIDS DRI MODUS X Academy DTEK D. TRADING D. SOLUTIONS
Sustainability
Policies and public statements Our sustainability journey Investing in green Environment Standing with Ukraine Our people Governance
Investors
Governance Sustainability Reports
News and Insights
Media releases In the media Image library Video library
Careers
DTEK community Jobs
Sitemap
DTEK 20th Anniversary
Subscribe to DTEK
Stay up to date
DTEK
social media
DTEK CEO
on social media
2005-2025 DTEK
ALL RIGHTS RESERVED
Made by Frontmen, 2020
EN
UA
About DTEK
Mission, vision, values New strategy 2030 History Contact us Privacy policy #FightForLight Standing with Ukraine Our people Awards and Recognitions Cookie Policy
Our businesses
DTEK ENERGY DTEK RENEWABLES DTEK OIL&GAS DTEK GRIDS DRI MODUS X Academy DTEK D. TRADING D. SOLUTIONS
Sustainability
Our sustainability journey Investing in green Environment Standing with Ukraine Our people Governance Policies
Investors
Governance Sustainability Reports
News and Insights
Media releases DTEK and Fluence project In the media Image library Video library Contact us
Careers
DTEK community Jobs
I confirm the foregoing Do not confirm