18.11.2025
The successful implementation of projects in a new field like BESS is impossible without clear legal structuring and an understanding of regulatory rules. Investors need guarantees and transparent operational mechanisms.
Maksym Fedotov, attorney, CEO and Founder of the law firm “FEDOTOV&PARTNERS”, will speak about the legal and regulatory aspects of business models at the Energy Club forum “Energy of Freedom: Resilience and New Opportunities for the Energy Storage Systems Market in Ukraine”, which will take place in Kyiv on November 20.
From the expert’s speech, forum participants will learn which legal aspects are key when structuring ESS projects, how to protect investments in new energy assets, and will also learn about practical cases – legal challenges in connection and operation in the balancing market.
Ahead of the forum, in an interview with the Energy Club media department, Maksym Fedotov explained why legal support is becoming a critical element for investors in BESS projects in Ukraine. He outlined the key risks during equipment procurement and grid connection, named the “thinnest places” in the regulatory field, and also explained why the presence of price caps hinders the development of long-term contracts in the electricity market. The expert shared practical cases from his work and advised on what investors should pay attention to at the start of projects.
— Mr. Fedotov, the “Energy of Freedom” forum gathers key players to discuss resilience. From a legal point of view, how ready is Ukraine today for the mass implementation of storage systems? Where is the “thinnest place” in the legislation right now?
— A rather rapid process of BESS development is currently underway, and a lot of money is being invested in these technologies. If we talk specifically about the thin places in this process that we see when accompanying such projects, it is, first of all, the difficulty in forecasting the profitability of this technology that investors face. Because it is possible to build a forecast only on retrospective data.
Another problem for investors is the guarantee of payments from the state, especially if we consider storage systems for providing ancillary services to “Ukrenergo”.
— One of the forum’s topics is how to make storage profitable. What specific legal mechanisms or regulatory changes (perhaps “green” tariffs for ESS, tax incentives, simplified connection) are needed for an investor to see a clear ROI and start investing money?
— It is worth noting that investors already see the payback of these technologies, and that is why BESS projects have become so popular, especially over the last year.
We constantly accompany this business and can say that most often questions arise related specifically to land plots and connection conditions. So, if we talk about simplifying procedures that investors would like to see, it concerns precisely the change in the designated purpose of land plots and obtaining technical specifications, although there are not always problems with this; everything depends on the specific location of the object.
And the regulatory framework is rather not an obstacle, but a certain reality in which we live. There is a certain indicative that everyone knows about – with any sale of electricity, we have benchmarks on price caps in the day-ahead market. And we believe that if they are canceled, and they will be canceled sooner or later because this is one of the conditions for Ukraine’s integration with European markets, then perhaps everything will be more predictable – the price of electricity, its purchase and sale. In our opinion, the presence of price caps prevents state and private generation from selling long-term contracts that can form the price of electricity for a year or half a year in advance.
— From a legal point of view, what risks can you name for an investor who wants to build Energy Storage in Ukraine?
— Firstly, these are risks related to equipment. It is very important to analyze the purchase agreements for this equipment in detail and legally correctly at the first stage – so that the investment object can really work as intended. We call this legal due diligence of an investment project. In our practice, there were cases where an investor considers purchasing energy storage systems and sets the goal of work – providing FCR, aFRR ancillary services. But when they receive the technical documentation for the goods they are buying, it turns out that these stations will not work correctly in this mode.
And this is very important because an investor can buy equipment, and it simply will not work for its intended purpose. Therefore, competent legal and technical support for BESS projects is necessary already at the initial stages of their implementation.
The second risk can be called connection to the grids. However, provided there is competent legal support, it can be avoided. Then the investor will understand where they are connecting, how much it will cost, and that no one wants to make extra money off them.
Thirdly, there is a possible risk of changing the rules of the game in the market because we are currently living under martial law, the regulatory field changes sharply, and it is difficult to predict what the market will be like even in a month.
There is also a risk of non-payments by the state – and it must also be kept in mind and factored into projects.
— Representatives of OTGs (United Territorial Communities) and water utilities are invited to the forum. Are there any special or accelerated legal procedures for critical infrastructure facilities (hospitals, pumping stations) for installing storage systems, especially in the context of military challenges?
— To name clear legal procedures for acceleration, one must understand that the installation of an energy storage system at a facility for own needs is not a very long procedure anyway, provided that these entities have the necessary financing. Therefore, there is no need to speed up this process if we are talking about a storage system for a hospital or a water utility as a backup additional power source. Such projects are implemented as a priority and without problems.
— Based on the experience of the first implemented projects in Ukraine, what unexpected legal problems did business face? Perhaps it was customs clearance of equipment, environmental permits, or disputes with the grid operator?
— Every investor, entity, and lawyer accompanying such projects faces different problems. Everyone has their own. Therefore, it is difficult to single out specific general ones for everyone, but it is worth emphasizing the points that should be paid attention to.
Equipment compliance is very important. When installing ESS units, there may be disputes with grid operators regarding capacity. But these are not surprises, but predictable moments. They exist, they need to be and can be solved, and Energy Club members emphasize them during meetings.
— How to legally protect expensive equipment (ESS) installed in a region with increased risks? Do standard insurance contracts cover military risks, and what legal instruments can help here?
— Unfortunately, there is no legal instrument that will insure equipment against rocket fire or drone attacks. The legal guarantee of security is the implementation of Article 5 of the North Atlantic Treaty (this is the principle of collective defense, which means that an armed attack on one or more member countries is considered an attack on all members of the Alliance and obliges each NATO member state to provide assistance to the attacked party, including the use of armed forces, to restore and maintain security in the North Atlantic region), which everyone talks about, but we, unfortunately, have not seen how it works.
Therefore, each specific insurance company that offers insurance contracts needs to carefully and attentively approach the conclusion of agreements because we know from our practice that insuring objects against military risks, especially in territories located near the front line, is very risky.
— In conclusion, why should a chief power engineer, financial director, or owner of an agricultural holding put aside their affairs and come to forum on November 20? What practical legal answers or solutions will they receive there?
— Within the framework of the presentation, the speech at the forum, we will consider the legal features of implementing ESS projects at all stages – from equipment procurement to market entry (if we are talking, for example, about large stations for commercial arbitrage).
We will see in which market segments ESS operators will be able to work, and also talk about risks and important legal aspects along the entire path of BESS project implementation: what to pay attention to, what we can help with in this. I think it will be interesting for the participants.
