Energy Club has appealed to the NEURC regarding temporary safeguards in the balancing market pricing mechanism.

05.06.2026

Energy Club has submitted an appeal to the NEURC regarding the necessity of implementing temporary safeguard mechanisms within the balancing market pricing framework for electricity.

This appeal was prepared based on the outcomes of a closed-door expert meeting held by Energy Club on May 14, 2026, titled “Imbalance Prices Following NEURC Resolution No. 621: Market Risks and Potential Interim Solutions.”

The document was signed by Energy Club member companies that support the need for further discussion regarding the impact of new price caps on market participants, the debt component of the balancing market, and the financial stability of bona fide suppliers and traders.

In its appeal, Energy Club emphasizes that the Club’s position is not to abolish imbalance responsibility, but rather to introduce temporary, proportionate, and transparent safeguards for the duration of martial law.

Such safeguards are intended to mitigate excessive price distortions, preserve the liquidity of bona fide market participants, prevent further accumulation of debt, and simultaneously maintain economic incentives for accurate forecasting and balancing.

The letter notes that NEURC Resolution No. 621 of April 23, 2026, established new price caps for the Day-Ahead Market (DAM), the Intraday Market (IDM), and the balancing market. Specifically, the maximum price cap on the balancing market was set at 17,000 UAH/MWh, while the minimum was set at 10 UAH/MWh.

According to Energy Club’s assessment, the new configuration of price caps, combined with the current imbalance settlement mechanism, may create a significant asymmetry of financial outcomes for market participants.

During the preparation of this appeal, hourly actual imbalance prices across the Integrated Power System (IPS) of Ukraine for the period of January–April 2026 were analyzed. The calculations demonstrated that market participants face situations where a positive imbalance is effectively settled at the minimum price, while a negative imbalance can generate a disproportionately high payment.

Energy Club also draws attention to the significant mutual indebtedness in the balancing market. According to information shared during the discussion, as of April 30, 2026, the debt of market participants to NPC Ukrenergo amounted to approximately 46.5 billion UAH, while the counter-debt of NPC Ukrenergo to market participants totaled approximately 25.8 billion UAH.

In Energy Club’s view, mechanically increasing the financial liabilities of bona fide participants without addressing the underlying debt problem could undermine market liquidity and competition.

Separately, the appeal highlights that under martial law, market participants operate with limited access to information regarding the state of the power system, maintenance campaigns, infrastructure operating modes, and other data necessary for quality forecasting. While such restrictions are understandable from a security perspective, they objectively narrow the information base for market participants and increase imbalance risks.

Consequently, Energy Club requests the NEURC to consider temporary measures to resolve the situation by introducing safeguards into the imbalance settlement mechanism for the period of martial law.

Specifically, the appeal proposes the following:

1. Consider amending NEURC Resolution No. 332 of February 25, 2022, or another relevant regulatory act, to establish temporary safeguards in the balancing market pricing mechanism and imbalance settlement calculations.
2. Develop a temporary price corridor for imbalance payments relative to the DAM price of the corresponding settlement period:
   • Price for positive imbalance payment — not less than 80% of the DAM price;
   • Price for negative imbalance payment — not exceeding 120% of the DAM price.
3. Jointly with NPC Ukrenergo and JSC Market Operator, analyze the feasibility of applying similar temporary safeguards to balancing energy bids.
4. Conduct modeling of the proposed approach using historical data from 2025–2026, taking into account the volumes of positive and negative imbalances, actual balancing market prices, DAM prices, mutual debt, and the potential impact on balancing market funding sources.

Energy Club stresses that the proposed mechanisms are not intended as long-term administrative price regulation in the balancing market, but solely as a temporary anti-crisis instrument during martial law. These mechanisms aim to:

• Mitigate excessive price distortions;
• Preserve the liquidity of bona fide market participants;
• Prevent further accumulation of debt;
• Maintain economic incentives for quality forecasting and balancing.

The Club has also expressed its readiness to provide the NEURC with consolidated materials, additional calculations from market participants, and to organize professional discussions to prepare a balanced solution that maintains imbalance responsibility, competition, financial stability, and operational security of the power system.

Energy Club will continue its professional communication with the regulator, NPC Ukrenergo, JSC Market Operator, and the Club’s member companies regarding potential interim solutions to stabilize the situation in the balancing market.