How the price of electricity will change: Minister’s statements, MPs’ opinions, business reality

24 May 2024 15:34

ЕКСКЛЮЗИВ

The first day of summer for Ukrainians may also be the first day with new electricity tariffs. Experts have been talking about this for a long time, and the topic has been raised after the massive shelling of power facilities. Read how electricity prices for businesses and households will change in the article by "Komersant Ukrainian".

What will happen to electricity prices: Minister’s statement

By the end of May, the Government will make a final decision on the new electricity tariffs for household consumers. This was announced today by Energy Minister German Galushchenko during an hour of questions to the Government in the Verkhovna Rada.

“This issue is under consideration, today we are making final calculations, the decision will be made in the coming week, i.e. by the end of May,”

– galushchenko said.

He stressed that a differentiated approach to consumers will most likely be used depending on the amount of electricity used.

“We are currently considering a differentiated approach. I do not think that one tariff will be replaced by another – there will be differentiation depending on the volume of electricity consumption,”

– said the Minister.

According to him, the current electricity tariff for households does not cover the cost of electricity production by Energoatom and Ukrhydroenergo.

“We have the tariff calculations, and we are verifying them in terms of what additional revenues the state budget will receive in terms of the corresponding payment of dividends by these two companies (Energoatom and Ukrhydroenergo – ed.) and in terms of balancing the entire energy market,”

– halushchenko summed up.

How electricity prices for households will change: MP’s opinion

The exact prices for households have not yet been set, but experts and MPs predict a significant increase in the price, which is currently UAH 2.64 per kWh.

In an exclusive commentary to Kommersant Ukrayinsky , Sergiy Nagornyak, a member of the Parliamentary Committee on Energy, Housing and Utilities, and MP of the Servant of the People faction, said that the price for households is likely to be between 4.5 and 5 UAH/kWh.

According to him, the price increase is not a manipulation, but a real necessity due to massive Russian missile attacks on generation facilities.

“And not just at generation facilities, but at manoeuvring capacities: hydroelectric power plants and thermal power plants. We have about 70% of them under repair, and we need resources: both time and money. So, yes, there has been talk of raising the price. The price is likely to be between UAH 4.5 and 5 per kW. It is not known whether there will be other figures, because consultations are still ongoing, the price should be affordable for everyone,”

– said Mr Nagornyak.

According to him, in any case, people should be told the truth, explained in simple terms why the price of electricity is rising, and most importantly, explained that there will be blackouts in any case, whether the tariffs are raised or not.

“Raising tariffs does not guarantee that we will have electricity 24/7 in winter. According to my forecasts, in winter we will have restrictions on consumption at 0-5 degrees – 16 hours with light, 8 hours without. At temperatures of -5-10 degrees, 14 out of 10 without. This is assuming that we restore some of our capacities, there are no massive rocket attacks or we have good air defence. If the tariff is not increased, the restrictions will be greater, because Ukrhydroenergo will not have the resources to restore its power plants and Energoatom will not be able to build new facilities,”

– said Nagornyak.

What tariffs have already been adopted for business: they will be effective from 1 June

The National Energy and Utilities Regulatory Commission (NEURC) has recently adopted new electricity tariffs for businesses.

On the day-ahead and intraday markets:

from 00:00 to 7:00 and from 11:00 to 17:00 – UAH 5,600/MWh (previously UAH 3,000)
From 7:00 to 11:00 and from 23:00 to 24:00 – 6900 UAH/MWh (previously 5600 UAH/MWh and 3000 UAH/MWh respectively)
from 17:00 to 23:00 – 9000 UAH/MWh (previously 7500 UAH)

The minimum price cap is UAH 10/MWh.

As for the balancing market, prices will change by:

from 00:00 to 7:00, the maximum prices will be 6600 UAH/MWh (previously 4000 UAH/MWh)
from 07:00 to 17:00, the price will not change – UAH 8250/MWh, and the cost of electricity in the period from 23:00 to 00:00 will also increase to this figure;
from 17:00 to 23:00 will increase to UAH 10,000;

The minimum price cap will be UAH 0.01/MWh.