Director of the EUAA warns of a record level of debt necessitating government intervention
The director of the Energy Efficiency Agency of Ukraine (EUAA), Vereshchynska, has highlighted the severe financial difficulties facing the energy sector, revealing that the debt owed by market participants to NEC “Ukrenergo” has reached an alarming 46.4 billion UAH. Additionally, Ukrenergo itself is grappling with over 30 billion UAH in debts.
This overwhelming debt is largely attributed to protected consumers, such as state-owned mines and municipal enterprises, which are prohibited from having their electricity supply cut off. “Currently, market participants owe a total of 46 billion UAH to Ukrenergo, including VAT,” Vereshchynska stated.
Vereshchynska emphasized that the lengthy payment terms in the balancing market, which often exceed one year, have effectively stifled investments in new energy projects. She noted, “The payment timelines for electricity suppliers in the balancing market range from 12 to 18 months, which is excessively long.”
According to her, potential solutions to this issue include mutual settlements among market participants and utilizing resources from state energy companies. However, she stressed that these solutions require government involvement and the identification of funding sources to address the debts of protected consumers.
Vereshchynska concluded by stating that resolving the outstanding debts is vital for attracting investments into energy storage systems and flexible generation capacities.
Context
- In May, Energy Minister Denys Shmyhal indicated that reforming the balancing electricity market is one of the key areas for transforming Ukraine’s energy sector.
