Businesses will be able to purchase electricity in advance at a fixed price
17 June 15:34
The government has decided to introduce long-term contracts in the electricity market: businesses will be able to lock in electricity prices in advance for a quarter, half a year, or a year and avoid being affected by sharp market fluctuations.
This was announced by Ukrainian Prime Minister Yulia Svyrydenko, according to "Komersant Ukrainian".
“Non-residential consumers will be able to purchase electricity under fixed terms for an extended period through transparent, competitive auctions. The first auctions are expected to take place in the near future,” Svyrydenko said.
For the pilot launch, 4% of the generation capacity of state-owned power producers—Energoatom and Ukrhydroenergo—will be offered: 2% through quarterly contracts, 1% through semi-annual contracts, and another 1% through annual contracts.
Why This Is Beneficial for Businesses
According to Svyrydenko, the new mechanism allows companies to lock in prices and supply volumes in advance. This will enable companies to plan their expenses, investments, and production more accurately.
“Today, electricity consumers depend on the short-term day-ahead market, where prices can fluctuate significantly. In winter, prices rise due to high demand, while in the spring and summer months, they fall,” Svyrydenko noted.
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She noted that electricity producers will also benefit. For them, this means predictable revenues, clear operating conditions, and protection against price drops during months when electricity production exceeds consumption.
European Experience
According to Svyrydenko, such long-term contracts are standard practice in EU countries. They help attract financing for new energy projects, as banks are more willing to provide loans when there is a guaranteed buyer and a clear price for the future.
“Nothing will change for residential consumers. The decision concerns the commercial segment of the electricity market. It will make the market more predictable and help energy companies attract investment and build new capacity,” the head of government noted.
As a reminder, Ukraine has agreed with the IMF on an updated financing program that provides for a phased increase in utility rates for the population.
For now, gas and electricity prices for Ukrainians remain unchanged, and the government will be able to raise them only after launching social protection measures for vulnerable families.
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