22.04.2026
In 2026, the Ukrainian energy market is undergoing the largest transformation in its history. Amidst large-scale decentralization of generation, Ukraine is becoming a new field of opportunities for European traders and investors.
On June 9, Energy Club will host the Europe-Ukraine Energy Trading forum in Budapest. This is a meeting place for key energy market players — those who do not just observe the changes but monetize them. Participants will learn how the restoration of the energy system creates new trading instruments, how Market Coupling works in practice, and how to turn Ukrainian gas storage facilities into a stable asset for the EU.
One of the leading speakers at the forum will be Roman Volosheniuk, Commercial Director at Elementum Energy. On the eve of the forum, he told the Energy Club media department how financial PPAs work in Ukrainian realities, whether banks are ready to lend to RES without state support, what holds investors back, and where the economy of the new energy sector is actually being formed.
– Roman, Elementum Energy was one of the first in Ukraine to begin concluding financial Corporate PPA and Contract for Difference (CfD) agreements with large businesses. For example, the recent case with CEMARK plants. Tell us how this mechanism works in practice in our realities, and why it is currently profitable for industry to fix the price of electricity for a year or even more?
– A financial Corporate PPA or CfD is an instrument that allows fixing the price or price range of electricity for an agreed volume and period without physical delivery. The parties determine the price, profile, and term of the contract, and then the compensation mechanism works: if the market price goes above the agreed level or corridor, the producer returns the difference to the consumer; if it’s lower, the consumer compensates the producer. Thus, both parties receive a predictable financial result.
This is especially important in Ukrainian conditions, where the market remains volatile (for example, the base load price on the “day-ahead” market in April 2026 is more than 2 times less than in February 2026, namely 4,600 UAH/MWh against 9,800). Even now, price fluctuations can be significant, and long-term instruments are almost non-existent — most contracts are short-term. In such conditions, the CfD actually becomes a hedging tool that allows businesses to fix electricity costs for at least a year and include them in the cost of production.
For generation, this is also fundamental: the contract provides a more stable cash flow and a clear income model, which is important for planning and attracting financing. In Europe, such agreements can be concluded for 10–15 years and serve as a basis for the development of new projects. In Ukraine, we are still at the stage of shorter pilot contracts, but interest from industry is already growing.
– It’s interesting to hear about financing. Are Corporate PPAs a sufficient guarantee today for banks to credit the construction of new wind or solar parks without state support? Or are such projects still unrealistic without the “green” tariff?
– Banks evaluate not a single instrument, but the entire risk structure of the project: the “bankability” of the offtaker, contract terms, cash flow stability, technological, and regulatory factors. In this context, a long-term Corporate PPA or CfD provides the key element — a predictable movement of funds upon which debt servicing is built.
If the contract is qualitatively structured — with a clear price determination mechanism, a sufficient sales horizon to ensure investment payback, and a financially reliable counterparty — banks are already prepared to consider such projects without state support. In essence, the Corporate PPA reproduces the fundamental characteristics that the “green” tariff previously provided: a fixed or predictable price and reduced market risk.
In Ukraine, specific risks are added: market volatility, military factors, regulatory uncertainty, and a limited readiness of consumers to enter into long-term contracts. Furthermore, existing support mechanisms work unevenly. In particular, the “market premium” has several limitations: the absence of imbalances in the calculation base, the lack of advance payments, and the unrealized principle of priority dispatch. This is especially critical given payment delays from state enterprises, which ultimately fails to provide the stable predictability considered by banks when evaluating projects.
Projects without the “green” tariff are already possible with a reliable offtaker, commercially attractive Corporate PPA structuring, and a balanced financial model. Such agreements are now beginning to form the basis for a new cycle of investments in RES.
– Regarding debts. The state owes RES producers over 13 billion UAH. You have openly stated that this is a bad signal for new investors. Has the situation changed now, and what specifically does the state need to do to restore trust in its support mechanisms?
– The debt situation has partially stabilized but is not completely resolved, and investor trust has not yet been restored. Indebtedness accumulated over years, with its peak exceeding 30 billion UAH; as of March 2026, it remains at around 13 billion UAH — this has formed a systemic negative signal for the market.
For an investor, this is not just a question of the debt volume, but of the predictability of state policy and the reliability of contracts. The non-payment crisis in the electricity market, ongoing since 2019, has already influenced investor behavior: specifically, low settlements for delivered electricity in 2022 significantly reduced the appetite for investment compared to the 2017–2019 period. Accordingly, even partial payment delays translate into higher capital costs, stricter bank requirements, or postponed investment decisions.
There are positive changes — payment discipline has improved, and partial repayment is occurring. But the key problem remains: the absence of a long-term solution. The problem could repeat: financing continues to depend on the decisions of state players, such as the need to approve the transmission system operator’s tariff, which affects the sufficiency of funds for settlements for produced megawatt-hours of electricity.
Bottom line: the system is built in a way that does not provide confidence over a multi-year horizon. Consequently, other players are looking for opportunities to ensure reliable, long-term, and guaranteed electricity off-take in other ways, such as through the URMM (Ukraine Risk Mitigation Mechanism) model. But since this mechanism is not yet operational, we focus on what we can manage ourselves: market sales, pilot CfD projects, and gauging the appetite for cPPAs.
To restore trust, concrete actions are needed: full debt settlement with a transparent repayment schedule, guarantees of future payment discipline, and no worsening of the rules of the game. There were precedents of changing the rules, which led to lawsuits and project stagnation. The best lesson to learn is to focus on rules regarding regulatory legal certainty and, if changes are necessary, introduce compensators for the loss of expected profitability. Without this, risks and the cost of financing for Ukraine will remain elevated.
– Your portfolio includes many powerful wind and solar stations, so BESS seems like a logical next step. How does Elementum see its strategy regarding storage systems, and do the current balancing market rules allow for a quick payback on such investments?
– We view BESS as a tool to increase generation efficiency in conjunction with wind and solar stations, rather than as a separate business. Our portfolio allows us to search for and find optimal ways to integrate storage systems into assets.
Our main directions currently are optimizing deviations from forecasts due to the variable nature of electricity output and arbitrage: accumulating electricity during periods of low prices and discharging it during peak hours. From an economic perspective, arbitrage looks more promising.
We are testing this model comprehensively at our wind farm: arbitrage, imbalances, and working with generation constraints. This allows us to understand how storage integrates into the operational model and forms additional margin.
If we talk about payback, the current balancing market rules alone do not ensure a quick return on investment. At the same time, volatility and the difference between price periods create opportunities for arbitrage strategies provided there is a sufficiently flexible and adaptive operating model.
Therefore, we see the economics of BESS in a combined model — through integration with the RES portfolio, working with imbalances, constraints, and price.
– The recently adopted law on energy markets introduced the concept of a market premium and strict quotas for hybrid projects. In your opinion, are the new state auctions capable of attracting large systemic investors, or are their conditions again not very well suited for large-scale projects?
– The introduction of the market premium itself is a positive signal because it is a move toward a more market-based model. It combines the opportunity to work in the market with a certain level of income protection and, in theory, can become an alternative to previous support mechanisms. It’s a pity this issue was delayed: the first auctions should have taken place seven years ago, which would have allowed investors to transition smoothly from the familiar “green” tariff model to a more market-oriented auction price. Consequently, the drop in interest in new Ukrainian RES projects would not have been so sharp, and by today we would have more GW of dispersed, decentralized generation.
Now the key question is how it works in practice. Our experience shows that even with commercially attractive auction inputs (price, duration of off-take, etc.), the model may not yield the expected result if stability of settlements and predictability are not ensured. Specifically, the market premium mechanism, which was opened for “green” tariff players a few years ago, already faced payment delays, lack of advances, and generation constraints, which directly affects project economics and investor risk assessment. I think what was somewhat discouraging was not so much the emergence of the problem, but the long path to its resolution — everyone understands that a 9-month payment delay suits no one.
Therefore, the mere fact of having auctions is not enough. For large systemic investors, it is critically important that the model provides predictable income, has a clear calculation logic, and is financially secured. At the same time, there should be no gaps in regulation that could lead to a decline in payment discipline. Without this, it is difficult to talk about large-scale capital attraction.
A separate issue is the parameters of the auctions themselves and limitations for hybrid projects. It is important that they correspond to the economics of large objects and do not limit the possibility of scaling. Otherwise, there is a risk that participation will be limited to less capital-intensive players.
– Ukraine is on the threshold of Market Coupling with the EU. From your position as Commercial Director of the largest foreign independent producer in Ukraine, what main advantages and risks do you see in the integration of spot markets for our generation?
– The recent adoption of the law on market coupling already moves this topic from the level of plans to practical implementation. This is the integration of the Ukrainian spot market into the European price space, where part of the electricity flows to where there is demand and a competitive price.
For electricity producers, the main advantage is access to a more liquid market and a broader demand base. This creates the possibility for better monetization: during periods of deficit in the EU, Ukrainian producers can export surplus and receive high margins for short periods or small volumes, as price caps under EU law must be point-specific. Whereas in Ukraine, price ceilings apply constantly, and accordingly, the price ceiling in the EU is significantly higher. Parallel imports will help smooth out internal price peaks for Ukraine and strengthen competition.
Risks are also obvious. Ukrainian generation enters an environment of direct competition with European producers, including cheaper RES segments, often built with financing at lower rates due to lower so-called country risk. Furthermore, prices in Ukraine will be partly formed under the influence of fluctuations and volatility in EU markets. And the practical effect will largely depend on the available cross-border transmission capacity and the rules for its allocation.
For producers, this means moving to a more complex operating model — with more active trading, the use of hedging instruments, and portfolio flexibility. In this configuration, it is more of an opportunity, but it requires a different level of risk and price management.
– Another hot topic is the launch of a full-fledged market for Guarantees of Origin. Do you already see tangible demand from European companies to purchase green value from your stations, and how will this affect marginality?
– Yes, we already see tangible demand for guarantees of origin, particularly from European companies. This is happening even though the Ukrainian market is not yet fully integrated into the European system of recognition for guarantees of origin for reducing greenhouse gas emission obligations — we hope this is a temporary limitation and our European partners will allow guarantees of origin into full circulation in the EU and UK markets.
Demand is formed through the practical needs of business: decarbonization, ESG reporting, and the need to confirm the “green” origin of electricity. Ukraine looks competitive here — due to RES potential, cost, and geographical proximity to the EU. We see this in our own experience: after the mechanism launched in Ukraine, we have already concluded agreements for the sale of guarantees of origin and effectively tested this instrument in practice.
From an economic standpoint, guarantees of origin are an additional layer of income on top of the base electricity price. They increase the overall marginality of projects, improve the economics of new investments, and can strengthen commercial terms in PPAs, especially with international counterparties.
With further integration with the EU and mutual recognition of certificates, this market will become more liquid and transparent, and the role of guarantees of origin as a source of additional revenue will grow.
– Elementum continues to invest hundreds of millions of euros even during the full-scale war. What war risk mitigation mechanisms do you actually use, and what would you advise foreign investors who are still hesitant to enter Ukrainian energy?
– We decided not to stop projects but to adapt them to wartime conditions. This meant rebuilding the operating model, from the approach to construction to operational processes: changing contractors, strengthening security requirements, and a readiness to take on more risks and work with additional costs. Thus, we completed the second stage of the Dnistrovska WPP and continued the development of new projects.
The second element is the diversification of the commercial model. We began working more actively with market instruments: sales on the open market, financial PPA / CfD contracts, forming successful business cases, finding businesses for which we can form a value proposition, and developing cooperation. This allows for a different way of managing risks, identifying barriers to more autonomous operation of renewable generation in the market, and thus training ourselves to work on market principles, reducing dependence on RES support mechanisms.
The third direction is technological flexibility. Investments in storage systems provide the opportunity to work with imbalances, grid constraints, and volatility.
And separately — investments in people, which are critical. Especially in conditions of limited access to external contractors who usually provide exclusive services regarding the maintenance of external contractors.
For investors, the key is the horizon and the approach to risk. Renewable energy is about long-term investments with high capital intensity at the start, and in Ukraine, it is important not to avoid risks but to be able to manage them. This is exactly where the change in approach is currently occurring — at the level of companies and projects.
– And finally: what is the main message you plan to convey to European traders and investors at our forum in Budapest on June 9?
– The main message is that Ukrainian energy is developing working tools for the investor. We see this in practice: long-term contracts with price fixation are appearing, the market for guarantees of origin is launching, and integration with the European price space is being prepared. This forms the base upon which project economics can be built.
An important aspect is that this model consists of several elements simultaneously. Profitability is formed not by one mechanism but by a combination: market sales, PPA, guarantees of origin, and in the future — integration with European markets. It is this configuration that gradually makes projects more predictable.
Another point is the role of partnership. The market develops through the interaction of business, the state, and international players. Participation at this stage means working not only with projects but also with the very logic of how rules and instruments are built.
And the last thing is the investment horizon. We are talking about long-term projects tied to the transformation of the energy system and its integration with the EU. Accordingly, the evaluation of such investments is based on long-term dynamics, not short cycles.
Ukrainian energy is no longer just recovering; it is forming a new market model. And right now, at the stage of its transformation, the rules of the game, instruments, and partnerships are being established that will define its integration with Europe for years to come.
