Govt planning another tender for 1,322 MW of new generating capacity – energy minister
The government plans to announce another tender for new generating capacity of 1,322 MW for eastern, central, and southern Ukraine, First Deputy Prime Minister of Energy Denys Shmyhal announced following the third working meeting with representatives of the gas generation sector.
"Special attention should be given to the updated rules for holding tenders for the construction of new generation. We are interested in attracting strong players and implementing specific projects where the need is greatest. Specifically, in accordance with the government’s decision, we will put 1,322 MW of new capacity up for tender for the eastern, central, and southern regions," Shmyhal wrote on Telegram on Friday.
He clarified that the state support mechanism proposes a market premium model as a modern European instrument that guarantees a minimum income while simultaneously maintaining competition.
According to the Minister of Energy, systematic cooperation between businesses and Naftogaz Ukrainy is being established in parallel. This includes market conditions for gas supplies, the possibility of fixing prices for different periods, and risk hedging instruments.
"This will allow businesses to better control expenses and reduce their dependence on price fluctuations," Shmyhal emphasized.
He also described the new price caps on the electricity market, which the National Energy and Utilities Regulatory Commission decided to take effect on May 1, 2026, as "more realistic." He believes this will make gas-fired generation more profitable.
As reported, according to Law of Ukraine No. 4834-IX (bill No. 12087-d) on market coupling between Ukraine and the EU, tenders for new generating capacity will only remain in effect until May 1, 2028. As the bill’s author, MP Andriy Zhupanin, explained, European partners view such tenders (where Ukrenergo compensates for capital investments in generation facilities from the transmission tariff) as a hidden form of state support for business. Therefore, as he indicated, Ukrenergo will be able to hold such tenders in various regions until May 1, 2027. A transition period will be held until May 1, 2028, with tenders limited to energy-deficit regions.
On December 30 last year, the commission for the first tender for the construction of generating capacity, which had been blocked since April 2025, determined that seven companies, which had submitted proposals for the construction of a total of 316.4 MW of capacity, were the winners, and rejected proposals from three more with a total capacity of 107.12 MW.
The National Energy and Utilities Regulatory Commission (NEURC) set 24-hour maximum price caps on the day-ahead market (DAM) and intraday market (IDM) at 15,000 UAH/MWh, and on the balancing market (BM) at 17,000 UAH/MWh, effective May 1, 2026. Previously, these caps were differentiated by time and significantly lower.
