The Cabinet launches a long-term electricity contracts market: will anything change for household consumers?
Prime Minister of Ukraine Yuliia Svyrydenko announced that the government has decided to launch long-term contracts in the electricity market.
According to her, non-household consumers will be able to purchase electricity under fixed conditions for a long period through transparent competitive auctions.
“The first trades are expected to take place very soon. For the pilot launch, 4% of the generation volumes of state electricity producers — Energoatom and Ukrhydroenergo — will be offered: 2% through quarterly contracts, 1% through half-year contracts, and another 1% through annual contracts,” she said.
What will this change in practice?
Today, electricity consumers depend on the short-term day-ahead market, where prices can fluctuate significantly. In winter, prices rise due to high demand, while in spring or summer months they fall. The new mechanism allows fixing the price and supply volumes in advance, planning expenses, investments, and production.
“For electricity producers, this also means predictable income, clear working conditions, and protection from price drops in surplus months.
Such long-term contracts are a common practice in EU countries. They help attract financing for new energy projects since banks are more willing to lend when there is a guaranteed buyer and a clear future price.
For household consumers, nothing changes. The decision concerns the commercial segment of the electricity market. It will make the market more predictable, help energy companies attract investments, and build new capacities,” Svyrydenko added.
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