Ukraine is launching long-term electricity auctions

Long-term auctions for the sale of electricity under long-term bilateral contracts are set to begin in Ukraine. This was announced by Andriy Gerus, Chair of the Verkhovna Rada Committee on Energy, Housing and Utilities.

These auctions became possible after the government introduced final amendments on 8 July to Resolution No. 499, which introduces the sale of electricity under contracts with terms of one quarter, six months and one year.

The first auction for the supply of electricity (for August–September) will take place on 13 July.

The others are scheduled as follows:

• 20 July — for contracts covering August–December 2026,
• 27 July — for contracts covering August 2026–June 2027.

The chair of the relevant parliamentary committee stated that each auction will last three days. On the first day, no more than half of the volume put up for sale may be sold; the entire volume must be sold within the allotted timeframe.

The first sellers at the long-term auctions will be JSC ‘NAEK ‘Energoatom’ and PJSC ‘Ukrhydroenergo’.

As Andriy Gerus noted, electricity will be sold in lots of 5 MW. In his view, large lots may restrict competition and have a negative impact on price levels.

To ensure the fulfilment of contracts, security deposits and bank guarantees are required. Contracts must be fulfilled in full and for the entire duration.

“This is the first step, but over time, I hope we will reach a point where contracts are concluded for 5–7 years. This will add predictability, send clearer signals to investors and provide a new impetus for lending to energy projects,” concluded the chair of the relevant parliamentary committee.

It should be recalled that the Ukrainian government decided to launch long-term contracts on the electricity market in June this year. As noted, 4 per cent of the generation volumes of state-owned electricity producers — Energoatom and Ukrhydroenergo — will be offered for the pilot launch: 2 per cent through quarterly contracts, 1 per cent through half-yearly contracts and a further 1 per cent through annual contracts.