Energy imbalance: why Ukraine’s scarce electricity “goes straight into the ground”
20 March 16:35
There is a significant imbalance in the production and consumption of electricity in Ukraine’s energy system, which leads to multimillion-dollar losses for the state. This was reported by LIGA.net with reference to the statement made by Andriy Gerus, chairman of the Parliamentary Committee on Energy, Housing and Utilities, "Komersant Ukrainian" reports.
At the meeting of the Energy Committee, where this issue was discussed, the functioning of the electricity market was just being investigated.
Why is there an energy deficit in the morning and evening and a surplus in the afternoon?
The reason for the problem, according to Andriy Gerus, is that Ukraine is actively building solar power plants that produce energy mainly during the day.
This leads to an uneven supply throughout the day: in the morning and evening, there is not enough electricity, which leads to restrictions for consumers, especially industrial ones, and in the afternoon, there is too much, which forces the introduction of generation restrictions.
“This is the most unhealthy situation and the most financially inefficient, because every week we pay tens of millions of hryvnias for electricity that goes straight into the ground,” stated Andriy Gerus.
According to him, the problem became more acute in early March, especially on 7-8 March, when significant warming led to a decrease in electricity consumption by about 2 GW, and cloudless weather contributed to active electricity generation by solar power plants. At that time, the heating season was still in progress, which meant that the base of traditional generation (nuclear, thermal, and hydroelectric power plants) was high.
The energy imbalance is exacerbated by the price paradox
According to the feed-in tariff and the terms of take-or-pay contracts, the state is obliged to pay producers for electricity that they could not supply to the grid due to restrictions. In the period from April to October 2024, the cost of such paid but not consumed electricity reached UAH 954 million.
Andriy Gerus believes that the state’s pricing policy creates the wrong incentives for investors who continue to build solar power plants rather than invest in other types of generation or energy storage systems.
“When a consumer or investor looks at such a market, they think: it probably makes sense for me to continue building solar panels, because together with the grid tariffs, I get a good price and I will have a payback period of less than five years. And with such a market, when prices are quite high in the afternoon and not super high in the evening, there is no point in bothering with something more complicated to deliver some energy storage, to build some gas generation,” says the chairman of the Parliamentary Committee on Energy, Housing and Utilities.
According to Andriy Gerus, if this trend continues, we will continue to have huge generation restrictions.
Consumers pay for imbalances and paradoxes
Ukrainian businesses are paying with lost profits due to regular restrictions in energy supply, as well as with their own finances by paying high electricity tariffs. Household consumers also face problems both because of tariffs and the need to save electricity consumption, which Ukrenergo constantly calls for.
This morning, the National Energy Company reported that the level of electricity consumption as of 9:30 a.m. was 9% lower than at the same time the previous day. The reason for this is clear weather almost all over Ukraine, which leads to the efficient operation of household solar power plants and a corresponding decrease in energy consumption from the general grid.
Traditionally, they also reminded that it is advisable to use powerful electrical appliances during the period of the most efficient operation of solar power plants, i.e. from 10.00 to 16.00.
