Are Ukrainians Threatened by "European" Electricity Prices After the New Law on a Unified Energy Market with the EU?

President Volodymyr Zelenskyy signed law No. 4834-IX, which opens the way to the unification of the energy markets of Ukraine and the European Union. The document is one of the key steps towards integrating the Ukrainian energy system into the European energy space and provides for the gradual implementation of common electricity trading rules.

One of the main concerns for consumers is whether such integration will automatically lead to higher electricity prices for Ukrainians if prices rise in EU countries.

Will European prices affect tariffs for Ukrainians?

The Committee on Energy and Housing and Communal Services explained that there will be no direct and automatic linkage of Ukrainian prices to European ones.

At the same time, an impact is possible if electricity prices rise in Europe and Ukraine experiences a deficit in its own generation and is forced to increase import volumes. In such a case, the cost of electricity on the domestic market may increase.

However, the committee notes that recently there has been a different trend in the European market. Thanks to the active development of renewable energy in many EU countries, electricity prices, especially in the spring-summer period, tend to decrease.

Therefore, after the full unification of the markets and increased competition in Ukraine, prices may not rise but, on the contrary, gradually decrease.

When will the unified energy market start operating?

The full implementation of the law is planned over several years.

It is expected that the implementation of the new rules will take place during 2026–2027, and the full unification of the Ukrainian and European energy markets may occur in 2028. That is when the market coupling mechanism will start working, allowing national electricity markets to be united into a single space.

How the law will help avoid electricity shortages

One of the key outcomes of integration should be the simplification of electricity imports from the EU.

Currently, Ukraine also purchases electricity on the European market, but this process involves auctions, searching for suppliers, and going through a number of procedures. After the launch of the new model, imports will become faster and more automated.

This will allow for a quicker response to electricity shortages and cover deficits through supplies from European Union countries. Accordingly, the risk of scheduled outages during periods of generation shortages may decrease.

What will change for businesses and budget institutions?

The greatest impact of the new law will be on non-household consumers.

This includes industrial enterprises, electric transport, water utilities, hospitals, schools, kindergartens, and district heating companies that purchase electricity at market prices.

Thanks to the opening of the Ukrainian market to European suppliers, the number of electricity sellers will increase, and competition will intensify. This may contribute to lowering electricity costs for businesses and the communal sector.

As a result, changes may be reflected in the cost of services and goods. In particular, a significant part of the expenses of water utilities and electric transport is electricity.

Will tariffs change for the population?

Electricity tariffs for household consumers will continue to be set by the government.

Therefore, the launch of the joint energy market with the EU does not mean an automatic change in bills for the population. The main impact of integration is expected in the wholesale market and the non-household consumer segment.

At the same time, due to changes in the costs of enterprises and communal services, the consequences of the reform may gradually be reflected in the prices of certain goods and services.

Price caps are planned to be canceled in 2027

The law also provides for the cancellation of price caps — maximum prices for electricity on the wholesale market — from May 1, 2027.

However, in the event of an emergency in the energy system, the National Energy and Utilities Regulatory Commission (NEURC) will retain the right to temporarily reinstate such restrictions to prevent sharp price spikes.

An additional market protection tool will be legislation on REMIT, aimed at countering manipulation and abuse in the energy market.

Thus, the relevant committee believes that the unification of the energy markets of Ukraine and the EU does not automatically pose a risk of rising electricity prices for the population. On the contrary, provided current trends in the European market continue and competition develops, integration may create conditions for stabilizing and gradually lowering electricity costs.

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