Ukraine has set an approximate date for the complete abolition of price caps in the electricity market – May 2027. According to the regulator, this period was chosen as a compromise between the need to liberalize the market and the need to maintain control over prices in a war economy. The National Commission for the Regulation of Energy and Power Generation and Energy explains that by 2027 the power system must undergo several stages of modernization, restoration of generating capacities and the launch of new balancing mechanisms, without which complete freedom of pricing could cause sharp jumps in tariffs. This is reported by “Pershy Business“, the PromPolitInform portal reports.
The key argument is the expected restoration of some generation, in particular thermal and renewable, as well as the completion of integration with the European ENTSO-E market in an expanded format. This will allow for increased competition and reduced dependence on individual producers, which currently significantly affects price dynamics.
After the abolition of price caps, the market will operate according to a fully market model, where the price will be formed by supply and demand without administrative restrictions. It is expected that daily and intraday auctions will play a key role, as well as the balancing market, which will become the main tool for smoothing fluctuations in the system. NEURC predicts that competition between producers and importers of electricity should restrain excessive cost growth.
At the same time, the regulator emphasizes that full liberalization does not mean the absence of control. The state will maintain monitoring mechanisms, and in the event of manipulation or collusion between market participants, it will be able to apply sanctions. For household consumers, separate protection tools are also provided, including the possibility of temporary intervention in the event of sharp price shocks.
Recall that May 2027 is the date when the market should be technically and institutionally ready to operate without restrictions. By this time, Ukraine must complete the modernization of networks, increase generation reserves and ensure transparency in electricity trading.
