Ukraine's Energy Ministry proposes exempting consumers from power restrictions if at least 60% of demand covered by distributed generation

Ukraine's Ministry of Energy has proposed that the government refrain from applying electricity supply restrictions during periods of power shortages to consumers that cover at least 60% of their electricity demand through purchases from distributed generation facilities.

"We continue to create systemic conditions for the development of distributed generation in Ukraine," the ministry said in a statement published on its Telegram channel on Friday.

In addition, the Energy Ministry is launching the implementation of PPA (Power Purchase Agreement) contracts – direct electricity purchase and sale agreements concluded directly between producers and consumers.

"Companies will be able to secure the electricity they need, while producers will gain the opportunity to build generation facilities directly near industrial sites and have a stable energy sales market," the ministry explained.

The ministry added that, as a result, businesses should gain predictable pricing and operational stability, while the state will benefit from reduced pressure on the power system and greater regional energy resilience.

The Energy Ministry has already submitted the relevant amendments for government consideration, which would make it possible to conclude such direct agreements between consumers and producers, together with the proposal not to impose restrictions on consumers sourcing at least 60% of their electricity from distributed generation.

"In effect, this creates clear incentives: for enterprises and other consumers to transition more actively to local generation, and for industry businesses to invest in new gas piston and gas turbine units already now," the ministry noted.

According to the ministry, one of its priorities is to ensure that electricity is generated closer to consumers in order to reduce the risk of outages caused by damage to power grids.

As reported, citing First Deputy Prime Minister and Minister of Energy of Ukraine Denys Shmyhal, the energy sector plans to commission 1.5 GW of new distributed generation capacity by the end of 2026, in addition to the 1.5 GW already commissioned since the start of the full-scale war.