Debts owed to NEC Ukrenergo by market participants are twice as high as its liabilities
The balancing electricity market in Ukraine is facing a massive debt burden due to the insolvency of state-owned mines and other market players. Energy Research Centre Director Oleksandr Kharchenko emphasized the need for comprehensive government intervention. This was reported by RBC-Ukraine (Сергій Новіков), according to the portal PromPolitInform.
Attempts by NEC Ukrenergo to independently resolve its debt liabilities will fail because the total amount owed by other market participants to the system operator is roughly twice its own obligations. Such a strategy remains a dead end for the entire sector.
The accumulation of arrears is primarily driven by state-owned coal mines, including closed facilities that continue consuming electricity without financial resources to cover payments. They draw power directly from the grid without purchasing it through standard market mechanisms.
Flood Risks and Environmental Dangers
Continuous water pumping is critically necessary at these industrial sites to prevent environmental disasters caused by groundwater flooding. Consequently, shutting off power supplies to these facilities is technically impossible.
Because these objects consume power directly from the grid without paying, debts accumulate within the balancing market at the highest possible prices. Financial deficits will continue to mount regardless of how much capital Ukrenergo allocates toward its own obligations.
Impact on European Integration
This systemic payment crisis severely deters private investors from entering the Ukrainian energy sector due to ongoing market instability. Market integration with European energy structures also remains hindered by unresolved financial gaps.
Without a separate state financing mechanism for such consumption, debts will keep growing indefinitely. Experts agree that no viable solution currently exists outside of systematic government-level reforms.
Photo: RBC-Ukraine
