The Ukrainian industrial company Interpipe has called on the Ministry of Energy and the NCREC to fully liberalize the electricity market in Ukraine by introducing all the tools of the free market: long-term contracts, transparent information about the state of the system, and forecasted import conditions. Since only an increase in price caps does not lead to a reduction in risks, but to shifting them to the industry, which is already bearing the burden of war.
This was announced by Vasyl Goncharuk, Director of Dneprostal-Energo LLC, an energy supplier within INTERPIPE, during the round table "Ukraine's Electricity Market: Challenges for Industry and MMC", organized by the GMK Center.
"If we are really moving towards European market liberalization, we need to launch all its mechanisms: long-term contracts, transparent information about the state of the system, and forecasted import conditions. If only increasing price caps works, this is not reducing risks, but shifting them to the industry, which is already bearing the burden of war," he said.
According to him, for Interpipe, affordable and competitive electricity is a critically important cost factor and competitiveness in global markets. "According to our simulations, after the introduction of new price caps, the cost of electricity for our industrial assets will increase by more than 26%. This is a direct blow to high–value-added production, exports and, eventually, budget revenues," said Vasily Goncharuk.
He recalled that when discussing the increase in marginal prices in July, two main arguments were voiced in favor of this decision: integration into the European market and attracting additional imports.
"However, integration into the EU market is not only the abolition of price restrictions. In Europe, there are also long–term contracts - quarterly, semi-annual, and annual - that allow you to plan expenses and smooth out market fluctuations. There are no such instruments in Ukraine yet, and we are forced to work solely on the basis of spot prices," said the director of Dneprostal-Energo LLC.
The second point, according to him, is the lack of open information about the balance of the energy system. "In European countries, market participants have access to generation forecasts, deficits, and surpluses. We don't have this data available, which makes it impossible to understand the pricing logic. Suppliers and traders are actually working in the dark, not knowing when the system is in deficit and when it is in surplus," said Vasily Goncharuk.
"Regarding the import. Without long-term access to interstate crossings, imports remain short-term, unpredictable and, consequently, expensive. We cannot conclude a contract with a European supplier for at least a quarter because of
