The National Commission of Ukraine for State Regulation of Energy, Housing and Utilities Services (NCER) will increase the forecast wholesale market price of electricity for the first quarter of 2018 by 9.5%, from the current UAH 1,366 per MWh to UAH 1,495/MWh (excluding VAT).

According to the decision made at a NCER meeting on December 28, the price for the second, third and fourth quarters of 2018 will be increased by another 6.1%, to UAH 1,587/MWh (excluding VAT).

In general, the average annual forecast wholesale electricity price for 2018 will be UAH 1,562/MWh (excluding VAT).

The commission noted that the key factors for the price revision are an increase in prices for coal and gas, the change in the hryvnia to U.S. dollar exchange rate, inflation, the growth of wages in industry, the increase in tariffs of power generating companies, the negative effect of the change in the structure of production in 2018 due to the expected decline in the share of electricity generated by nuclear power plants and the increase in the share of thermal power plants and combined heat and power plants.

According to the NCER, the last version (dated December 26, 2017) of the forecast balance for 2018 provides for the reduction in energy generation by nuclear power plants to 52.9% in the total output structure in the country compared to the expected 55% in 2017. At the same time, the share of thermal power plants in energy generation is expected to grow from 29% to 30.6%.In addition, the share of combined heat and power plants and cogeneration plants in 2018 is foreseen by the balance at the level of 7.4% (7% in 2017), hydroelectric power plants at 5.6% (5.7%), hydroelectric pumped storage power plants at 1.1% (1%), renewable sources at 1.3% (1.2%), and block stations at 1% (1%).