Court decision on tariffs for Ukrenergo makes functioning of new electricity market model impossible
The decision of Kyiv's District Administrative Court to satisfy the claim of JSC Nikopol Ferroalloy Plant against the National Commission for Energy, Housing and Utilities Services Regulation (NCER) in the form of suspending the regulator's decisions on tariffs for Ukrenergo makes the functioning of a new model of the wholesale electricity market impossible, Ukrenergo has said.
"The decision of the Kyiv District Administrative Court will lead to the collapse of the new market, since the suspended decisions of the regulator were adopted to provide new algorithms of the market's operation," the company's press service said citing Head of Ukrenergo Vsevolod Kovalchuk.
He said that the new tariffs set for the company in June took into account such necessary costs to ensure the operation of the new wholesale electricity market as expenses of electricity in the transmission networks, compensation for electricity generated from renewable energy, the cost of ancillary services provided by generation companies for the unified power grid to provide the necessary level of reserves.
"Non-application of these tariffs makes it impossible to pay for electric energy consumed in backbone networks, compensate to manufacturers who operate with feed-in tariffs, as well as pay for ancillary services, that is support for reserves in the unified power grid, and therefore makes it impossible for the market to function," Kovalchuk said.