18.12.2024
On December 12, 2024, a meeting of the working group was held to consider the draft law, reg. No. 12087 “On Amendments to the Laws of Ukraine on the Integration of the Electricity Markets of Ukraine and the European Union” (author A. Zhupanyn) and the alternative draft law, reg. No. 12087-1 “On Amendments to Certain Laws of Ukraine on the Implementation of the Norms of European Law on the Integration of Energy Markets, Improving Security of Supply and Competitiveness in the Energy Sector” (author O. Kucherenko).
The meeting was attended by the Chairman and Members of the Committee on Energy and Housing and Communal Services, representatives of the National Commission for the Regulation of Energy and Utilities of Ukraine, the Ministry of Energy, the National Securities and Markets Commission, the Antimonopoly Committee of Ukraine and the Energy Community Secretariat, electricity market participants, representatives of associations and other interested parties.
Opening the meeting of the working group, the Chairman of the Committee emphasized the need to accelerate the process of processing integration draft laws, given their relevance and importance, both separately for the electricity market of Ukraine and for the economy of the state as a whole.
The authors of the draft laws, Andriy Zhupanyn and Oleksiy Kucherenko, drew the attention of those present to the almost complete identity of the draft laws, but at the same time they highlighted a number of issues that require additional processing, in particular, the choice of the model of functioning of the nominated market operator and the issue of one- or two-session electricity trading on the day-ahead market.
They also appealed to representatives of the National Commission for the Regulation of Energy and the Ministry of Energy with a request to accelerate the process of providing official positions on the indicated issues, since they are extremely important when discussing the draft laws at the meeting of the Committee on Energy and Utilities.
Like the authors of the draft European integration laws, the majority of those present expressed their support for choosing a competitive model of functioning of the nominated market operator.
Thus, representatives of the transmission system operator, electricity generation companies, representatives of the European Business Association, the American Chamber of Commerce, the Ukrainian Energy Exchange and the Energy Club spoke in favor of competition in this matter.
Member of the NSSMC Arsen Ilyin noted that the Commission supports a competitive model of functioning of nominated market operators because:
The foundations are laid for the provision by competing NEMOs (directly or indirectly) not only services for organizing trade in the day-ahead and intraday markets, but also services that arise before and after trading, including clearing services.
The emergence of at least two NEMOs in Ukraine (there are three in Poland) will lead to the emergence of competing clearing services that will be interested in introducing new technologies, client-oriented services that will inevitably find distribution in capital markets and organized commodity markets.
Competition between clearing services will lead to the introduction of processing efficiency and a reduction in the costs of these institutions, which traditionally leads to a reduction in the cost and an increase in the quality of services provided to participants in capital markets and organized commodity markets.
However, Arsen Ilyin drew attention to the fact that the draft laws (the combined draft law) must take into account the requirements of the MIFID directive, and other directives of the European Union and the legislation of Ukraine on licensing professional activities in capital markets and organized commodity markets, including on the organization and conduct of electronic auctions for the purchase and sale of electricity under bilateral agreements, as well as clearing activities.
Vice President Maksym Nemchinov spoke on behalf of the Energy Club members in support of the choice of a competitive model for the functioning of the nominated market operator, given that the choice of such a model will open up the possibility of national NEMOs entering other markets, namely, the possibility of organizing trade in the price zones of other countries that have chosen a competitive model (for example, Poland, Romania and other countries).
Oleksandr Gavva, General Director of JSC Market Operator, spoke in favor of a monopoly in organizing electricity trade with a single market connection, noting that the choice of a competitive model may lead to the emergence of debt in the day-ahead market, therefore the Market Operator promotes the monopoly model of appointing a nominated market operator and conducting single-session electricity trade in the day-ahead market.
However, the people’s deputies noted that since the Market Operator currently has a conflict of interest in the issue of the chosen day-ahead market functioning model with a single market connection, when working on the draft laws, the Committee will rely on the position of the Ministry of Energy, as the governing body in the energy sector.
Representative of the Energy Community Secretariat Inna Surzhok emphasized the need to clearly adhere to the requirements of European legislation, the norms of which are transposed into Ukrainian energy legislation, when working on the draft laws and reported that Energy Community will necessarily process the submitted draft laws and provide them with an appropriate assessment.
In general, the participants of the working group unanimously agreed that the implementation of European law on the integration of energy markets will expand the possibilities of regional cooperation, and the cross-border exchange mechanisms provided for by the draft laws will contribute to increasing the security of electricity supply in Ukraine.
