Hans ten Berge, head of Eurelectric, European electricity producers association, sees launching the electricity exchange as crucial for Ukrainian electric power market that needs to be cleaned of the corruption schemes.
This
could bring the prices up, but would allow to modernize the sector which
remains heavily dependent on the Soviet era’s production capacities.
After
signing the economic part of the association agreement with the European Union
on June 27 Ukraine has to gradually adjust its electricity system to the
European norms which imply less regulatory power over the market held by the
government. Market should be driven mainly by the forces of supply and demand,
according to the EU energy policy.
“What
Ukraine needs is an (electricity market) regulator that insures all is
functioning well. And the good regulator doesn’t not pay attention whether the
ownership (of electricity producer) is state or private. That means it provides
fair access, provides reasonable prices,” Berge said during a news conference
in Kyiv on July 2.
“We
saw positive signs from Ukraine’s side regarding developing and modernizing
its energy market. And today Ukraine is on the way of creating the energy
market of European type”, he added.
As
of now, state-owned corporation Energorynok, nation’s largest revenue-maker
with only Hr 50 million of net income last year, buys the electricity from the
generating companies and sells it to the consumers. Meanwhile, the Commission
on Regulating the Electricity Market sets the tariffs that are paid for the
power supplies.
Berge
sees a key problem in government’s involvement in both regulating electricity
market and making profits on it through Energorynok, business entity.
Mogul
Rinat Akhmetov’s DTEK controls more than 30 percent of the local electricity
market. Donbas-native billionaire, who used to be a close ally of ousted
president Viktor Yanukovych, was trying hard to get a loyal person appointed in
the office of the market regulator, according to The Insider, news website. As
of now, office is being held by Sergiy Titenko who was appointed there yet in
2011.
In
Ukraine, domestic consumers pay Hr 0.31 for a kilowatt/hour, while in the EU on
average they pay Hr 3.2, in Ukrainian currency terms.
Berge
foresees growth of the electricity prices in Ukraine as they will be adjusting
to the European pricing policy, though he emphasized that this should not be a
one-day process, since increase in prices should respond to the increase in households’
income.
Being
optimistic about Ukraine’s law aimed at introducing direct sales of electric
power from the producers to the customers, passed in October, Eurelectric head
thinks still a lot remains to be done by Verkhovna Rada in that direction.
Vadym Ulyda, Ukraine’s deputy energy minister, hopes electricity exchange
could be established before 2017 which will lead to country’s deeper
involvement into the European market.
Last year country’s electricity production slightly fell, reaching 193
billion kilowatt/hour – amount that would make it EU’s 6th largest power generator,
should it be a part of a 28-member bloc.
Kyiv Post staff writer Iana Koretska can be
reached at [email protected].
