The European Network of Transmission System Operators for Electricity (ENTSO-E) approved the accession of NPC Ukrenergo to the European Inter-Transmission System Operator Compensation (ITC) mechanism for compensation of losses during electricity transit from July 1, 2024.

"I received a positive message from our colleagues from ENTSO-E, who approved the accession of Ukrenergo to the ITC mechanism from July 1. This mechanism operates in Europe and provides energy system operators with a transparent and understandable principle of cost compensation for the use of interstate interconnectors during the transit of electricity," the company's Head Volodymyr Kudrytsky said on his Facebook page on Wednesday.

According to him, from July 1, infrastructure costs and technological losses in the Ukrainian backbone network during the transit of electricity from European countries will be compensated by energy system operators ENTSO-E. Ukrenergo will also pay its share for the transit of Ukrainian electricity through the networks of neighboring countries.

"The amount of such compensation will depend on the annual volumes of transit electricity that passed through the Ukrainian network. The larger it is, the more funds we can receive for the further development of energy infrastructure," the CEO said.

As Kudrytsky noted, joining the ITC mechanism became possible after the Ukrainian system operator acquired full membership in ENTSO-E. Since January 2024, Ukrainian exporters and importers have received equal conditions for trading electricity with EU countries.

"The accession of Ukrenergo to the European ITC mechanism has forever removed the basis for long-term legal disputes in the Ukrainian electricity market over who should cover infrastructure costs in interstate exchanges," the CEO said.

In addition, Ukrenergo will receive another source of funds that it can use for the development of Ukrainian interstate power transmission lines, Kudrytsky said.

As reported, ENTSO-E increased from December 1, 2023 the permitted capacity for importing electricity from Europe to Ukraine and Moldova from 1,200 MW to 1,700 MW. The capacity for export from Ukraine and Moldova to Europe, in the ENTSO-E zone, from March 1, 2024 is 550 MW. There are no restrictions in Moldova.