15:59 20.08.2019

German experts call to strengthen competition on electricity market for cutting prices via privatization of Centrenergo

2 min read
German experts call to strengthen competition on electricity market for cutting prices via privatization of Centrenergo

The privatization of PJSC Centrenergo by a new player, which has not yet entered the electricity generation market, is one of the required conditions for solving the problem of high wholesale prices of electricity in the long-term outlook, according to experts of the Low Carbon Ukraine (LCU) project.

According to the LCU presentation made available to Interfax-Ukraine, among other long-term measures needed to increase competition in the market and establish real market prices, experts indicate integration with the European Network of Transmission System Operators for Electricity (ENTSO-E) and increased competition from renewable energy sources.

According to the experts, considerable attention should also be paid to the introduction of mechanisms that would motivate major players, in particular the DTEK energy holding, to downsizing. One of such mechanisms may be a review of price restrictions, but it carries a number of risks, including risks of shutting down electric power and reducing the effectiveness of reforms. In addition, this mechanism is dangerous because it is difficult to determine the necessary level of restriction and, in case of incorrect calculations, could lead to the termination of investments.

Among the more operational methods of influencing the price level, LCU experts point to the transition to tools to support vulnerable consumers that do not distort market mechanisms and prices, enhanced market monitoring, and the application of antitrust laws.

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