“Ukrenergo” certification on the ISO EU model

by Olha Povaliaieva
Friday, September 24, 2021

The parliament of Ukraine adopted the law on certification of the transmission system operator “Ukrenergo” on the ISO model in accordance with the requirements of the EU Third energy package

According to the report of the Information department of the parliament of Ukraine, on 15 April 2021, the law On the introduction of amendments to certain legislative acts of Ukraine concerning the certification of the operator of the transmission system was adopted.

"The Act regulates the issue of certification of the operator of the transmission system (OTS) on the basis of the ISO branch model, which provides that the operator of the transmission system shall use the property, which ensures the integrity of the unified energy system of Ukraine and the dispatching (operational and technological) management, main and inter-state electrical networks, while the said property remains in the ownership of the State," сomments by the information department of the parliament of Ukraine

Ukrenergo operates the main and inter-state transmission lines as well as the central dispatching of the country’s interconnected power system. The national energy company is under the Ministry of finance.

According to Volodymyr Kudritsky, head of the Ukrenergo department, the law includes norms allowing the introduction of joint auctions for the allocation of capacity of inter-state sections between Ukraine and ENTSO-E zones. These norms will simplify the import-export electricity process with Europe.

"All market participants will have unhindered access to the capacity of inter-state sections, the number of procedures necessary to ensure inter-state electricity trade will be minimized and their passage accelerated," noted on the Ukrenergo website.

The act will also address the issue of payment for transmission services for the export of electricity. "This is very important for the financial stability of OTS, as there is ongoing litigation between OTS and exporters on this issue. However, joint auctions will allow Ukrenergo to offset the cost of transfer services in the course of export through the mechanism of ITC (Inter-transmission system operator compensation) operating in ENTSO-E countries," commented in Ukrenergo.

Andrei Gerus, head of the energy committee of the parliament, reported in his Telegram channel that the law imposed a restriction/ban on importing electricity from Russia and Belarus due to the end of the heating season. The regulator was given the right to limit capacity until the end of the year, distributed at monthly and annual auctions for sections with non-European energy community countries). The Act also makes it mandatory for publicly owned companies to sell electricity at competitive auctions.

In contrast to the current Electricity Act, according to the ISO certification principles, the transmission system operator may be the owner of the transmission system and the economic entity of the State form of ownership in the preliminary transfer of the right to operate.

According to the press service of the National commission, in the plans of Ukrenergo for 2021 — the investment of €4,33 mln in the development of networks:

  • €3,23 bln in equipment and network refurbishment;
  • €1,1 bln.

The program is partly invested by foreign financial institutions, among them the International bank for reconstruction and development, the Bank of the government of Germany KfW, the European investment bank, the European Bank for reconstruction and development, and the European investment bank.

The main tasks of the program are the realization of the program of replacement of transformer equipment, automatization of substations, development of networks for output of power generation, improvement of power supply reliability of individual power units and border Western and Eastern regions for stable operation of power system while further integration in ENTSO-E.

The investment program is based on a 10-year plan for the development of the transmission system, which is updated annually by Ukrenergo and approved by the National commission for government regulation of energy and utilities

Let us remind, that in 2020 in the development of networks were invested €3,12 bln.

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