News State electricity prices 471 29 November 2024
The Federation considers such increases to be destructive for the country's economy
The Federation of Employers of Ukraine has opposed the unjustified increase in electricity transmission and dispatching tariffs proposed by the National Energy and Utilities Regulatory Commission (NEURC). This is stated in the message of the Federation.
On November 13 this year, the regulator approved the draft tariff for electricity transmission services at UAH 665.27/MWh, which means an increase of 26%. In addition, according to the FEU, the tariff for dispatch (operational and technological) control was approved at the level of 95.07 UAH/MWh.
The Federation considers such increases dangerous for the country’s economy.
“The increase in these tariffs is an additional burden for Ukrainian enterprises, which can lead to catastrophic consequences in times of war. For instance, if only one tariff for electricity transmission services is increased, energy costs will increase by more than UAH 13 billion, which will reduce the competitiveness of products,” the FEU said in a statement.
During the war, many domestic enterprises suffer significant losses, in particular due to the destruction of infrastructure and production facilities. According to the Federation, the increase in tariffs will lead to a drop in production, which will negatively affect foreign exchange and tax revenues in the context of the budget deficit.
The FEU notes that some of the costs included in the draft tariffs are excessive. For example, the draft tariff for dispatching provides for the cost of ancillary services of UAH 11.4 billion. However, an analysis of data for 2024 shows that the actual costs are much lower. In the first nine months of this year, only UAH 2.6 billion was spent on dispatching, and only UAH 67 million was spent on the purchase of replacement reserves. Given the rise in electricity prices and the lack of need to subsidize gas-fired units, these costs can be significantly reduced.
The Federation proposes to optimize the tariff structure for 2025, in particular, to set the tariff for electricity transmission services at no more than UAH 530/MWh, and for dispatching services – no more than UAH 60/MWh.
The FEU emphasizes the need to take into account economic realities and the need to ensure stability in the energy sector, as the increase in tariffs may become an unbearable burden for production and significantly worsen the socio-economic situation in the country. The Federation has sent official objections to the NEURC, NPC Ukrenergo, the Ministry of Economy and the Ministry of Energy, arguing its position and proposing a compromise solution.
As GMK Center reported earlier, Ukraine and the EU have agreed to increase the possibility of importing electricity in winter. Starting from December 1 this year, the maximum capacity for electricity imports from the EU will be increased from the current 1.7 to 2.1 GW. Ukraine will also have an additional 250 MW of guaranteed capacity for emergency power flows from the EU.
