08.12.2025
One of the key speakers on the panel “‘Bankable’ Project: How to Finance, Legalize, and Technologically Implement BESS” at the Energy Club forum “Energy of Freedom: Resilience and New Opportunities for the Energy Storage Systems Market in Ukraine,” held on November 20 in Kyiv, was Maksym Fedotov — attorney, CEO, and founder of the law firm FEDOTOV&PARTNERS. His firm supports over 50 companies in the energy sector, ranging from traders to energy storage system (ESS) operators.
His report was dedicated to the legal aspects of arbitrage trading in electricity using ESS, as well as the key risks and stages of implementing such projects.
The speaker reminded the audience that arbitrage is the purchase of electricity during hours of low prices and its sale during hours of peak value. This model can be integrated with on-site generation, such as solar, wind, or biogas.
1. Land Issues and Due Diligence
The investor’s first step is securing the land plot. It is critically important to conduct a legal audit of the asset, especially when the purchase occurs through the acquisition of corporate rights, as this is often where hidden risks arise.
2. Equipment
Acquisition Supply conditions and technical specifications must be carefully studied. A common problem is that equipment may not comply with the operating modes of the ancillary services market, causing the company to lose its warranty.
3. Grid Connection
For ESS, there are specific features for obtaining technical conditions — both for consumption (off-take) and for power delivery. Some Distribution System Operators (DSOs) establish their own nuances, but everything occurs within the framework of current legislation.
4. Licensing
This stage is not complicated, but the requirement to commission the equipment must be taken into account. During martial law, the use of comprehensive testing certificates is permitted, which significantly simplifies the procedure.
5. Market Entry: Concluding Mandatory Contracts The company must sign agreements regarding:
Transmission;
Dispatching;
Balancing;
Participation in a balancing group (private companies often invite ESS operators to enhance balancing).
Special attention should be paid to contract terms and calculation methodologies.
6. Contracts with Market Platforms – with the Market Operator, the Ukrainian Energy Exchange, and bilateral contracts with traders and suppliers.
7. Access to Cross-Border Interconnectors
Many ignore this step, but mistakenly so: an ESS operator has the right to import and export electricity, which is often profitable.
Maksym Fedotov highlighted several exceptions:
ESS with a capacity of up to 149 kW.
Use as an active consumer for internal balancing (up to 5 MW).
Operation in island mode without delivering electricity to the grid.
Installation of ESS at a Solar Power Plant (SPP) under the “green” tariff (provided it is charged exclusively by its own generation).
After launching the project, the company can operate in the following markets:
Day-Ahead Market (DAM) and Intraday Market (IDM) (Market Operator);
Bilateral Contracts;
Ukrainian Energy Exchange;
Balancing Market;
Ancillary Services Market;
Import/Export of electricity.
Particularly promising models involve ESS + solar generation, where “daytime” cheap electricity is sold during the expensive evening period.
Price volatility.
Price caps limiting earning potential.
Difficulty in forecasting demand during wartime.
Contractual risks — non-fulfillment of obligations.
Equipment degradation and rapid decrease in technology costs.
Warranty service risks.
Insufficient liquidity of the DAM during certain hours.
Maksym Fedotov drew attention to an important question: exactly when does a producer who has installed an ESS acquire the status of a storage facility operator? This affects the procedure for paying for transmission and distribution services.
FEDOTOV&PARTNERS has already applied to the NEURC (National Energy and Utilities Regulatory Commission) for an official clarification and promised to publish the response upon receipt and share the information with the Energy Club.
The speaker emphasized that energy storage systems are a promising and dynamic business that plays a key role in balancing systems with a high share of Renewable Energy Sources (RES). FEDOTOV&PARTNERS supports dozens of projects in this segment and is ready to ensure their safety, legality, and risk minimization.
