Economy

The government has changed the rules for selling electricity: what we know

The Cabinet of Ministers of Ukraine has updated the procedure for conducting electronic auctions for the sale of electricity under bilateral contracts. The new rules expand opportunities for electricity producers at distributed generation facilities and are intended to make the market more transparent and competitive. This was announced by Prime Minister Yulia Svyrydenko, according to "Komersant Ukrainian"

These changes are intended to support the development of decentralized generation amid ongoing Russian attacks on energy infrastructure.

What exactly has the government changed?

The government has updated the procedure for conducting electronic auctions for the sale of electricity under bilateral contracts. It has also clarified the scope of participants and the conditions for their participation in such auctions.

The key change is that electricity producers at distributed generation facilities now have the option to voluntarily sell electricity through electronic auctions under bilateral contracts.

This means that such producers will be able to use a transparent electronic mechanism for selling electricity, rather than merely negotiating directly with buyers outside the auction process.

What Are Bilateral Contracts in the Electricity Market

A bilateral contract is an agreement between an electricity seller and a buyer. In such a contract, the parties specify:

• the volume of electricity;
• the price;
• delivery dates;
• payment terms;
• other commercial details.

The procedure for electronic auctions for the sale of electricity under bilateral contracts in Ukraine was approved by Cabinet of Ministers Resolution No. 499 of June 5, 2019. It defines the mechanism for organizing and conducting such auctions.

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What is distributed generation

Distributed generation refers to the production of electricity not only at large power plants but also at smaller local facilities located closer to consumers.

Such facilities may include:

• small gas-fired power plants;
• cogeneration plants;
• solar power plants;
• bioenergy facilities;
• other local sources of electricity.

In wartime, this model becomes particularly important, as it reduces the power grid’s dependence on large facilities, which are often targeted by Russian attacks.

Why were producers given this new opportunity?

The goal of the decision is to increase transparency and competition in the electricity market. The government also aims to support the development of decentralized generation, which can help critical infrastructure operate more reliably.

The new rules can provide producers with:

• a clear channel for selling electricity;
• access to electronic auctions;
• greater transparency in contract negotiations;
• the opportunity to operate in a competitive environment;
• additional incentives for the development of local generation.

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