26.08.2026
On August 26, Energy Club held a meeting for representatives of member companies and invited experts on the topic “Settlement Futures Contract on the DAM Index: Opportunities, Launch Conditions, and Risks for the Market.”
The Ukrainian electricity market has long operated under conditions of high price volatility. Price fluctuations in the day-ahead market directly affect the financial results of suppliers, traders, producers, and large consumers. At the same time, instruments that would allow market participants to lock in a price in advance and protect themselves from unfavorable changes remain insufficient in Ukraine.
One possible solution could be a settlement futures contract on the DAM index. Unlike a physical contract, such a futures contract does not provide for the delivery of electricity: the financial result is determined based on changes in the relevant price index. In essence, it is a price risk management instrument that allows market participants to plan their future financial results more predictably.
At the same time, launching such an instrument requires appropriate exchange, regulatory, and clearing infrastructure. In particular, the fulfillment of obligations under a futures contract must be ensured through a central counterparty.
That is why Energy Club has appealed to the National Bank of Ukraine to obtain clarity regarding the participation of a central counterparty and the possibility of organizing clearing services for a potential futures contract on the DAM index.
Importantly, this appeal does not mean that a specific model or parameters of the future instrument have already been agreed upon. Its practical implementation requires professional discussion of liquidity, the reliability of the price index, possible manipulation, contract terms, margin requirements, clearing, guarantees, and the real interest of market participants.
The meeting was moderated by Maksym Nemchynov, Vice President of Energy Club and former Deputy Minister of Energy of Ukraine. The discussion focused not only on the opportunities offered by the new financial instrument, but also on the practical conditions for its potential launch and the market’s readiness to use hedging mechanisms.
The concept of the settlement futures contract, along with its legal and practical preconditions, was presented to meeting participants by Anton Shevchenko, Project Manager at the Ukrainian Energy Exchange, who is engaged in research and development of a settlement futures contract on the DAM index.
“The DAM is volatile, which is why we want to give market participants the opportunity to hedge their risks,” the expert emphasized.
During the meeting, Anton Shevchenko presented a detailed presentation and explained the logic behind how the future instrument would work. In particular, he spoke about the functioning of similar mechanisms in European energy markets, exchange-traded contracts for hedging DAM risks, and the work of the Ukrainian Energy Exchange on developing a corresponding instrument in Ukraine.
According to him, the development of such a mechanism is especially relevant in light of the further integration of the Ukrainian market with the European one.
“When we join the EU market as part of market coupling, the market will be different. The EU covers the risks of futures contracts. This is a powerful instrument that also needs to be introduced in Ukraine,” noted Anton Shevchenko.
The expert explained that a futures contract is a standardized exchange-traded agreement to buy or sell an underlying asset in the future under defined terms, while a settlement futures contract involves financial settlement without physical delivery of the asset. For the energy market, its key purpose is to help participants protect themselves against unfavorable price changes.
Particular attention was paid to the legal aspects of such an instrument’s operation, the exchange and clearing infrastructure, financial collateral for transactions, and the possibilities for using the futures contract by different categories of market participants — producers, traders, suppliers, and consumers.
Anton Shevchenko also spoke about other price risk management instruments and explained the logic of interaction between suppliers and consumers in the hedging process.
An important part of the meeting was a practical case based on the situation in March 2025. Using a specific example, the expert demonstrated how the hedging mechanism could work and how it can help traders and suppliers reduce the impact of price fluctuations.
According to the expert, the Ukrainian market for such financial instruments is only just forming, so the most favorable conditions for development are currently for contracts for the current and following months.
The purpose of the Energy Club meeting was not only to present the potential futures instrument, but also to hold an open professional discussion of its future model. Participants had the opportunity to ask questions about the practical operation of the contract, risks, collateral, clearing, and the prospects for its use in the Ukrainian market.
Anton Shevchenko provided comprehensive answers to questions from company representatives and experts.
For Energy Club, developing price risk management instruments is an important component of building a mature and competitive energy market. At the same time, the effectiveness of the future futures contract will depend on how well its model meets the needs of real market participants, ensures sufficient liquidity, and operates within a coordinated exchange, regulatory, and clearing infrastructure.
The future DAM index futures contract is, for now, a concept still under development. But it is precisely the professional dialogue between the exchange, regulators, financial infrastructure, and direct energy market participants that may determine whether this instrument becomes a real mechanism for protecting businesses from price volatility.
