The Energy Reform: An Investment Magnet
Starting in 2019, not one, but several electricity markets should appear in Ukraine.
Starting in 2019, not one, but several electricity markets should appear in Ukraine.
On June 8, as part of the implementation of the Third EU Energy Package, and as if in addition to the long awaited non-visa regime with the EU, the president signed Law No. 4493 on the Electricity Market. The head of state thereby defined the direction of the development of the Ukrainian energy market, at least in the short and medium term.
By reaching a compromise on multiple controversial issues and adopting this law in its current form, the authorities took a positive step toward the establishment of healthy competition on the Ukrainian electric energy market, which is clearly beneficial for the entire country.
Of course, the main profit will be a new liberalized model for the operation of the electricity market, as well as the conditions necessary for fair electricity pricing. Now, the price will be formed directly by the market, and not at the regulator's whim.
In 2019, when the reform will cover all the necessary aspects, not one, but several electricity markets should appear in Ukraine simultaneously. These are the next-day market, the intra-day market, the bilateral agreements market, the balancing market, and the market of supplementary services.
Such differentiation is beneficial and convenient for electricity consumers, and for the state, it means more precise accounting of electricity consumed. In addition, it will create new jobs, as it seems that each of these areas will involve different experts, technical and service staff, etc.
The main consequence of these decisions by the government should be the creation of a competitive and transparent electricity market, which will take actual demand for and consumption of electric power in Ukraine into account .
In the short and medium term, this will open up incredible opportunities for drawing new targeted investments to our country, which will clearly improve its overall economic condition.
Another logical consequence of this process should be the more active development of renewable energy, as Ukraine is one of the few countries in Europe with a rather high green tariff. If events really follow this scenario, then in just a few years, alternative energy will become a sort of a magnet for foreign investment in Ukraine.
Another argument in its favor will be the improved profitability of the construction of solar power plants, a trend we can already see taking shape.
Together, all of the above factors will enable alternative energy to become a full-fledged competitor for traditional energy in Ukraine rather quickly.
Once it's learned more about alternative energy, its possibilities and prospects, the private sector will join business in the race for accessible energy. However, this will require the popularization of the sector, and an entire information campaign will be required, with the support of the state.
It is also very important to conduct a comprehensive analysis of current Ukrainian legislation in order to detect obsolete technical requirements and norms for the installation and operation of alternative energy sources, in both the corporate and the private sectors.
The next stage should be the development of bills aimed at amending relevant laws and the lobbying of green projects in the Verkhovna Rada.