Ukraine and its EU neighbours agree to improve cross-border electricity trade

4 April 2019

Electricity transmission system operators and energy regulators of Ukraine (Ukrenergo, NEURC) and four neighbouring EU Member States – Hungary (MAVIR, HEO), Romania (Transelectrica, ANRE), Slovakia (SEPS, URSO) and Poland (PSE) - agreed to jointly allocate capacity at their electricity interconnections at a meeting hosted by the Secretariat. Existing capacity allocation mechanisms are highly inefficient and create significant barriers to cross-border activities. Their improvement is key to allowing efficient commercial exchanges with EU Member States and advancing market integration. Ukraine’s capacity allocation regime has also to be brought in compliance with the acquis.

It was agreed that a joint working group, coordinated by the Secretariat, will prepare the common auction rules and other agreements necessary for the successful allocation of yearly, monthly and daily capacities. Once in place, this should result in the increased availability of cross-border transmission capacities and thus more efficient cross-border trade.

According to a commonly agreed schedule, the target is to launch the joint allocation of yearly capacities for 2020 on the electricity interconnections between Hungary, Romania, Slovakia and Ukraine by the end of 2019. The interconnection Ukraine-Poland will follow at a later phase.

Reaching these goals depends first and foremost on the strong commitment of Ukrainian stakeholders to complete electricity market reforms in line with the Third Energy Package and remove existing barriers to trade without further delay.  Ukraine’s capacity allocation regime has been subject to a decision by the Energy Community Ministerial Council establishing a breach of its obligations under the Energy Community Treaty. The breach concerns maintaining the State Foreign Trade Company Ukrinterenergo as the company with an exclusive right to transit and import electricity from and to the EU and linking the right to participate to allocation of capacity with participation to the Ukrainian electricity market.

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