Ukraine introduces long-term contracts in the electricity market for businesses. The government has decided to launch transparent competitive auctions where non-domestic consumers can purchase electricity under fixed conditions for an extended period.
The Cabinet of Ministers announced the start of long-term contracts that will allow businesses to lock in electricity prices for a quarter, half a year, or a year in advance, thereby protecting consumers from sharp price fluctuations. Prime Minister Yulia Svyrydenko emphasized that this step makes the market more predictable and helps attract investment.
The first trades are set to take place soon, covering 4% of the generation volumes of state producers such as Energoatom and Ukrhydroenergo. Contracts will be distributed as follows: 2% — quarterly, 1% — half-yearly, and another 1% — yearly. This will allow consumers to plan costs and supply volumes in advance, and businesses to forecast income and avoid price drops in surplus months.
Svyrydenko noted that such practices are already common in EU countries, where they facilitate the attraction of funding for new energy projects. Given the stability of supply, banks are more willing to agree to financing.
For residential consumers, nothing will change as the program only applies to the commercial segment. The introduction of long-term contracts makes the market more stable and predictable for suppliers and consumers.
Let’s recall that starting June 1, a state program supporting distributed generation projects was launched in Ukraine. This will allow enterprises to receive loans for the construction of new generating capacities at reduced interest rates thanks to state compensations.
