19.05.2026
On June 9, Energy Club is hosting the Europe-Ukraine Energy Trading Forum 2026 Recovery, MarketCoupling & New Trading Frontiers forum in Budapest.
Participants of the Ukrainian and EU energy markets will discuss the integration of the Ukrainian energy market into Europe, the development of Market Coupling, cross-border trade, energy storage systems, and new energy trading models in the context of post-war recovery.
One of the speakers at the forum will be Andrii Nemyrovskyi, co-founder of Negen, member of the board of NEC Ukrenergo (2018–2024), former director of Ukrenergo Digital Solutions; led the process of implementing a liberalized electricity market model in Ukraine; was responsible for the development of the market management system, Data Hub and other digital products.
In an interview with Energy Club journalist Olena Karpachova, Andrii Nemyrovskyi explained why the key barriers to Ukraine’s integration into the European market today lie in the financial and regulatory sphere, how Market Coupling will change competition and pricing, what role BESS and distributed generation will play, and why Ukraine has the potential to become an important balancing hub for the EU energy system.
– Mr. Andrii, Ukraine is already synchronized with ENTSO-E, but full integration into the European electricity market is a much more complicated process. At what stage, in your opinion, is Ukraine today in terms of real market integration?
– Personally, I am not ready to agree that the process of physical integration is simpler than the rest. What is market integration? There is market integration – RDN, VDR. And the obstacles for this are rather bureaucratic and regulatory, not technical.
Obviously, the market operator will update the software, but they have it from a Slovak manufacturer with relevant experience, so, in principle, they have all the functionality provided. The main thing is not to invent an “exclusive Ukrainian bicycle”. Perhaps it will be necessary to update, but there is nothing dramatic about it.
And as for the full operation of the balancing market, the ancillary services market and other specific things, there are indeed technological conditions for joining the relevant platforms.
As far as I know, this process is moving forward steadily and nothing is impossible. It takes some time and funding. There is enough expertise for now. The issue of debts that exist on the balancing market will definitely arise. In my opinion, this is the most difficult thing, despite the understandable technical solutions. That is, we need to stop accumulating new debts and somehow close the existing ones. The mechanics of what needs to be done are clear, but this has not been happening, and for many years.
Therefore, it is not a matter of technical, but of organizational, bureaucratic and financial problems that will need to be solved. And this is the most difficult thing.
– Market Coupling often sounds like a technical or regulatory term. If we explain it in business terms, what will it really change for Ukrainian traders, producers, consumers and investors?
– It should increase the level of competition, and accordingly – provide a fair, I emphasize – not high, not low, but a fair price for the consumer. For producers, increased competition should stimulate development, improve production efficiency, improve the quality of service provision, invest in maneuverability, fuel consumption, and so on.
There is a certain discrimination against Ukrainian producers, since European producers are not under attack from Russian “Shaheds” and missiles and, accordingly, do not suffer losses. But how to cover these additional loads? Will a sufficient margin be formed for producers? The market should show this. Therefore, Market Coupling for the consumer is a fair price, and for the producer – an incentive to improve.
The issue of additional costs should be resolved either at the state level, or by an additional uniform and fair burden, for example, through tariffs, an analogue of a military levy or a targeted excise tax. There can be many options for mechanisms, the main thing is not to interfere with basic market principles, primarily pricing.
– What are the main barriers today that are holding back Ukraine’s faster movement towards full integration with the European spot market: technical, regulatory, institutional, political or commercial?
– Organizational and political. There are no technical problems, it’s just a task that needs to be done. And when state institutions set themselves deadlines for adopting a regulatory framework that is essentially standard, and it just needs to be translated into Ukrainian, adapted and adopted, and this takes years, then this is probably not a technical problem.
– While working at Ukrenergo, you were involved in the development of the electricity market, IT infrastructure, market operations and digital solutions. To what extent is the digital architecture of the market a critical condition for Market Coupling and the trust of European participants?
– I think that digitalization and automation of processes should be identical to synchronize markets with European ones. Without this, it is impossible. The infrastructure and software complex should be similar to those used by system operators.
– Ukraine already has experience in exporting and importing electricity with EU countries. What needs to be changed so that cross-border trade becomes not an episodic tool for responding to deficits or surpluses, but a stable part of the business models of Ukrainian and European companies?
– The question is not in the network capacity for both exports and imports. And I believe that today it is greater than could be expected, given the situation. Therefore, there are no purely technical problems.
In order for this to become routine, first of all, it is necessary to synchronize the DAM/IDR rules and introduce auctions for access to the crossing with neighboring countries.
And then for the vast majority of market participants, the issue of import-export will become routine. Another thing is the synchronization of balancing markets, and here an important condition is the absence of debt in the market. It is unacceptable when, for example, the debt in the balancing market of Ukraine is 14 months. No relevant participant in the European market will tolerate such calculations.
This problem will have to be solved. As soon as this happens, the only temporary difference that exists today in Ukraine will remain – the Government Resolution, which regulates that consumers who import electricity in a certain volume are not disconnected during the period of consumption capacity limitation, which, accordingly, somewhat distorts price signals, because plants are ready to pay, conditionally, any money, just so that they are not disconnected, and not the price dictated by the market.
That is, let’s say, the demand for imported electricity increases regulatoryly not only due to the price difference. I cannot say what the government’s decision is in wartime. This is indeed a certain attempt to find a fair solution when choosing to limit electricity supply. Because we understand that when, for example, food production is limited, where stopping the equipment for two minutes leads to the need to utilize the entire raw material base, this creates problems of a social nature, and not only for business. Therefore, there are certain productions that cannot be limited conditionally painlessly, because any restrictions are a pain for both the company, for business, and for the state as a whole.
On the other hand, the power system cannot satisfy the needs of all consumers due to the destruction caused by the eastern barbarians.
Therefore, if imports work to reduce the load on the domestic market, there are certain guarantees from the state.
The main condition is the end of the war – then the market will stabilize, the power system will stabilize, and all rules and processes must be synchronized. Then everything will work as it should. Because war is the most important factor that negatively affects all spheres of life.
– One of the key issues for traders is the available capacity of interstate crossings. What solutions can really increase commercial opportunities on the borders of Ukraine with the EU: investments in the network, regional coordination or changes in market design?
– Market design does not have a direct impact on network development. It is the design, not the results. Network development (construction of new interstate lines) should be carried out very carefully and not chaotically. Construction of new international connections is not just about building 20 towers and laying 4 km of wire. For this, there are special calculations that are performed by neighboring countries, agreed at the regional and pan-European level. And the trigger for such actions should be stable (!) market signals. This also often requires the development of substation equipment and low-voltage networks on both sides of the border. And this is a very long process.
But today, import capacity is more than 2 GW, which at peak times of the year gives approximately 15% of today’s consumption. And this is a very good indicator for ensuring competition.
Today, in addition to military risks, problems are created by administrative restrictions, price caps, in particular their unpredictability, the lack of guarantees of their stability and size, that is, there are no guarantees that they will not be revised downwards in a month, and it is not known what they will be in six months. But from the good news: from May 1, 2027, in accordance with the updated law, they are being canceled altogether. Therefore, as they say, there is not long left for this parameter to stop affecting the situation.
Therefore, for cross-border trade, specifically for increasing capacity, in my personal opinion, the existing capacity is still sufficient. And if there is a point in gradually increasing it, this should be done by introducing new technologies and implementing measures within existing lines, in particular reconstructions. And the construction of new lines is definitely after the victory, when there will be It is clear what our consumption structure is, what percentage of it these capacities occupy. And only then, together with our neighbors, decide which interconnectors to develop.
– How can the development of distributed generation, BESS and new flexible capacities change the Ukrainian balancing market and create new opportunities for traders and investors?
– It dramatically changes balancing, since before the full-scale invasion, the power system was balanced at the expense of hydroelectric power plants, hydroelectric power plants and thermal generation. The support reserve was, paradoxically, in the atom. But many classic generation facilities were destroyed by the attacks of the Muscovites. Highly maneuverable capacities, such as accumulators and gas piston, gas turbine installations that gain power in 5-7 minutes – they are not enough, but they have already added flexibility to the power system.
But the biggest problem is that all this balancing takes place precisely on the balancing market, where there is a multi-month debt, and you have to pay for gas now. And that is why this is a very big problem for the industry. And not only for those who invested in these projects, but also for the system operator, because it supposedly has flexibility in the system, but it is not available, because the producers have nothing to pay for gas because Ukrenergo does not pay them, because in turn, consumers have not paid them either.
I want to emphasize that if not 100%, then 90+% of systematic debtor consumers who, abusing their position, which for humanitarian reasons cannot be disconnected, are in state or municipal ownership.
This problem must be solved comprehensively, and no one, except state/municipal institutions, will solve the problem created by state and municipal institutions.
The development of distributed generation is doomed to help the energy system, and accordingly, all market participants, but it is held back by three things:
First, the war. The second is the unpredictability of price restrictions. And the third is that balancing capacities, due to debts, do not have the opportunity to work on the balancing market, which is “slightly” inadequate.
– In your opinion, what lessons should Ukraine learn from the first years of work in the European energy system after synchronization with ENTSO-E? What has already worked, and what needs a fundamental revision?
– The fewer artificial manual restrictions, interventions in market relations, the better. One of the most striking examples is that winter price caps were returned from May 1. Everyone was scared that the price of electricity would automatically increase. It did not increase at all, on the contrary, it decreased naturally due to seasonality. And this is normal. That is, in practice it has been proven that increasing price caps does not equal increasing the price of electricity even in conditions of not even super-high competition on the market in Ukraine.
The more competition there is, the more fair the price will be for the consumer, and competition is achieved by building new capacities, increasing the number of players on the market and market coupling, allowing our producers to enter neighboring markets, but also neighboring producers to enter ours.
– European companies often evaluate Ukraine through the prism of military risks. What, in your opinion, do they underestimate in the context of the Ukrainian electricity market: technological readiness, human capital, speed of adaptation, flexibility potential or future marginality?
– Many underestimate the Ukrainian market precisely because of military events and shelling of the energy system.
The state has made many positive decisions to simplify connection to the grid in Ukraine. Currently, connecting an electrical installation to the grid is many times easier than in any other country in the European Union. This is the first thing that European companies underestimate.
The second is that Ukraine already has a sufficiently powerful connection to Europe. And due to the same gas storage facilities and the rapid development of storage systems, the Ukrainian power system should take a leading place in the market balancing of neighboring countries not only in short-term balancing, but also in the long term.
That is, the spread between negative prices during the day and high prices during peak hours in European countries will be smoothed out due to power plants installed in Ukraine.
It is precisely the bringing of all market mechanisms to a single, common denominator that should serve as such a price equalizer for everyone, and this means greater predictability, which in turn means the possibility of concluding long-term contracts and business planning.
– How do you assess the prospects for corporate PPAs in Ukraine? Can they become a real tool for financing new generation, or is the market not yet ready for such long-term contracts?
– I believe that it would be very useful to increase the share of corporate PPAs in Ukraine and move away from, albeit not directly, but veiled linking of the price of electricity for the end consumer to the spot market.
But this is very difficult to do. Unfortunately, this is a difficult task. Cultivating such a culture will take years. And for this, three categories of companies should be actively involved: powerful consumers achi, private investors in the development of generation or energy storage systems and the banking system for financing these projects.
– Your current activities at Negen are related to private business and technological solutions. How has your experience working at a system operator changed your view on what the market needs: more regulation, more competition, more digitalization, or more responsibility of participants?
– Even during my time at Ukrenergo and until now, I have been convinced that regulation should be critically minimal, but sufficient to ensure the operational security of the energy system. Any additional regulation above the critical minimum is harmful to all market participants: consumers, producers, and everyone else.
Therefore, the new experience did not change my beliefs, but rather confirmed them. The only thing that has become even more obvious is that it is more difficult for private business to operate in a market environment of debt.
– In the perspective of 2030, what should be the role of Ukraine in the European electricity market? Exporter, importer, flexible balancing resource, platform for investments in new generation or a full-fledged participant in regional trade?
– All three last roles are not mutually exclusive. I would not fight for net imports and net exports. Of course, it is very good when a country is a net exporter. But the question is: what to count in? If in megawatt hours, then it is not difficult, but this should not be the goal.
In my opinion, the sequence of priorities of the TETs should be as follows:
As a result, we should get a sustainable energy system in Ukraine with a low carbon footprint, low marginal costs and competitiveness in all European market segments, which is more than premium. Thus, additional value appears in Ukraine
It should have started back in 2023. We at Ukrenergo did everything possible to ensure that such a development began. Unfortunately, we were the only ones who, apart from super-powerful slogans, worked in this direction.
After the victory, the report on the assessment of the conformity (sufficiency) of generating capacities will become open to the general public again. At the moment, it is hidden for obvious reasons. It should already give clear figures on how much and what the energy system needs, but I am sure that the ideology will not change for years to come.
– What three decisions, in your opinion, need to be made in the near future so that Ukraine becomes not just a synchronized energy system with Europe, but a full-fledged competitive participant in the European energy market?
– The first and second are to minimize the influence of any state institutions in the work of energy generating companies in volumes that are greater than the critical level.
Ukrenergo must balance the system, if it is necessary to limit producers, limit consumption to protect operational security – this must be done. But we must not allow any preferences to domestic producers, limiting the volume of imports, or vice versa, limiting exports in the absence of a fuel shortage. All throughput capacity in any direction must be given to the electricity market, and market participants must work with this.
Also, we must not give preference to any companies when activating on the balancing market, regardless of their form of ownership or technology. The offer price must be the activation factor.
However, to address specific network constraints, that is, when only one, two, or three stations can provide capacity in the region, of course, the operator must activate them. But such cases must be investigated by the National Commission for the Regulation on And the state should install donated equipment in regions where risks are higher: in the East of the country, Kharkiv region, Dnipropetrovsk region, Zaporizhia region, where there are the most problems, and where it is very difficult for a private investor to take on these risks. It is difficult to put this into an official regulatory document, but there must be a logic, approved in some way. , probably, the Ministry of Energy, is included in the strategy and, accordingly, proven to state and municipal institutions that receive such equipment.
Ukraine’s energy sector should be an investment-attractive industry that ensures the availability of energy to consumers at a fair price and pays taxes to the state budget, the primary source of which will be foreign energy markets, and not a manually/semi-manually managed debt pit, which is managed for the purpose of shadow enrichment of certain people.
Ukraine already has the technical prerequisites for deep integration into the European energy market, but further progress will depend on the state’s ability to minimize manual regulation, solve the problem of debts in the market and provide predictable rules for investors. It is competition, the development of flexible capacities, market synchronization with the EU and the creation of conditions for private investment that will determine Ukraine’s role in the new energy architecture of Europe.
