Ukrenergo boosts decentralised generation with upcoming auctions 

In response to the significant damage inflicted on its energy infrastructure over the past two years, Ukraine is taking decisive steps to strengthen its energy security by promoting smaller, decentralised energy projects. These initiatives aim to reduce the country's vulnerability to external threats. 

To attract the necessary investments for enhancing Ukraine's energy system, national power company Ukrenergo is launching a series of auctions for ancillary services, creating new incentives for existing market participants and welcoming new entrants, including those in decentralised generation and energy storage. 

The first auction, set for August 15, will focus on procuring 99 MW of frequency containment reserves. A second auction, scheduled for August 22, will target 1,000 MW of upward regulation and 421 MW of downward regulation of automatic frequency restoration reserves. Both auctions will offer five-year contracts, with successful bidders required to be operational by September 2025. 

Ukrenergo projects that investments in these initiatives could be recouped within approximately three years, making them economically attractive for potential investors in decentralised generation. 

“The Ukraine Energy Support Fund (UESF) underscores the critical role decentralised generation plays in economic development, national security, and shaping a more resilient and sustainable energy future for Ukraine,” said Artur Lorkowski, Director of the Energy Community Secretariat.

The UESF is a financial mechanism managed by the Secretariat to support the recovery and stabilisation of Ukraine’s energy sector by channeling international aid and investments into critical infrastructure projects. 

The Secretariat urges Ukraine to quickly adopt the new Electricity Market Law transposing the Electricity Integration Package: “Ukraine needs to ensure a stable framework for investments and facilitate the integration of the country's electricity market into the EU’s internal market,” said Director Lorkowski.