Concept of creating and functioning of the electricity market in Ukraine Cover Image

Методология создания и функционирования рынка электроэнергии Украины
Concept of creating and functioning of the electricity market in Ukraine

Author(s): Konstantin Ushapovskiy, Alexandr Minkovich, Yuriy Kostin
Subject(s): National Economy, Energy and Environmental Studies, Economic policy
Published by: Університет Григорія Сковороди в Переяславі
Keywords: electricity; competitive electricity market; liberalization of market relations; market of bilateral contracts; wholesale market (the "day ahead "); balancing market ; generation; electricity sales;

Summary/Abstract: Research Subject. The external and internal economical technologies (processes) when organizing competitive electricity market with due consideration of global trends have been studied. Work Objective. A new version of electricity market has been analyzed with the meaning of the Act of Ukraine “On principles of electricity market performance in Ukraine” and some strategic approaches of prospective competitive markets have been developed. Method and concept of the research work performance. The method of system assessments for analyzing global trends of electricity markets liberalization has been used. The calculation-analytical comparisons of different methodological approaches have been applied in making an assessment of the prospects of energetic of Ukraine. Research results. The role of the legislative initiative when forming methodological principles of organizing competitive electricity markets has been indicated. In such a case Ukraine has to accomplish a set of the following conditions: the level of competition at the energy market, economic feasibility of the electricity cost, the possibility of the free choice of power suppliers. It is suggested to achieve the separation of the natural-monopolistic (electric-power transmission, operational-dispatching control) and potential competitive (production and distribution of electricity, maintenance and service) functions, and to create the structures specialized in certain activities instead of vertically integrated companies that perform all these functions. The availability of a guarantying supplier of electricity in the retail market structure may prove that the consumer will not get in a situation when he is abandoned to celebrate a contract for electricity supply (purchase and sale) by any disposal organizations. The wholesale electricity market is operated by several sectors: regulated contracts, free bilateral contracts, wholesale market and balancing market. The market of bilateral agreements can not only protect consumers from sharp price fluctuations but also make the electricity be treated as a commodity that has its own price and quality. Field of application. The organization and functioning of the competitive market has universal application with joint and several responsibility. Conclusions. The appearance of liberalized electricity markets in Ukraine is associated with considerable difficulties and endurance tests. This is a time consuming process involving the readiness of the government to solve complex problems of organizational and economic nature, which in years will guarantee real long-term benefits for the consumer.

  • Issue Year: 1/2014
  • Issue No: 22
  • Page Range: 161-166
  • Page Count: 6
  • Language: Russian