On June, 22, 2022, Global REnew Day, the UWEA in cooperation with the law firm Asters, NPC Ukrenergo and SE Guaranteed Buyer held a webinar “Problematic aspects of compensation of imbalances by RES producers during the martial law”. The topic of the webinar has proved to be extremely important as the discussion was attended by as many as 100 RES market players.
In his introductory speech Yaroslav Petrov, a partner at Asters, highlighted the main idea of the webinar: “A significant number of the RES producers does not understand why they have received big bills for imbalances in some months of 2022, given the huge number of curtailments of green generation during exactly these periods. As the RES producers keep receiving extremely low payments for the delivered electricity along with such big bills for imbalances, they have to consider different options of protecting their rights and preventing their bankruptcy.”
Oleksandr Symomenko, Head of the Department of Special Obligations and Market Support of the NPC Ukrenergo, and Maksym Dyrenko, Head of the Department of Trade Operations in the Electricity Market of the SE Guaranteed Buyer spoke at the webinar to shed light on this problematic issue and discuss possible solutions.
Commenting the big bills for imbalances, Oleksandr Symomenko noted that the key reason is failure to provide the SE Guaranteed Buyer with full data on the number of curtailments of green electricity in the terms provided by the NEURC’s Resolution No641 from 26.04.2019. “Upon receiving these data, SE Guaranteed Buyer takes them into account when calculating Guaranteed Buyer’s share of compensation for imbalance. Otherwise, the national off-taker considers that there has been no curtailments of RES generation by the TSO in the accounting month and such RES generator is fully liable for imbalance. The reason for the failure to submit the data on curtailments at the proper time to SE Guaranteed Buyer is the delay in signing the relevant acts to settle the imbalances and execute other payments,”
Mr. Oleksandr explained.
Maksym Dyrenko added a number of other factors that cause high bills for imbalances: “In general, three main factors have created this problem: i) legislative, namely inadequacy of the regulation and this year increase of RES producer’s liability for imbalances from 50% to 100%; ii) technical, that associates with forecasting issues and the increase of the average monthly deviation among members of the balancing group from 5% in 2021 to about 40% in 2022, which, in turn, is closely linked to active hostilities and the inability of some generators to clearly assess the status of operation of their power plants; and iii) current decrease in demand in various market segments.” Commenting the situation in the market he added: “SE Guaranteed Buyer does its best to reach the pre-war levels of electricity sales and in May the national off-taker managed to sell 64% of electricity proposed in the market.”
Q&A session of the webinar resulted in a long and comprehensive discussion. Thus, Maksym Sysoiev from Dentons, member of the UWEA, inquired about Guaranteed Buyer’s opinion on the intention of some RES market players to leave its balancing group and sell electricity directly in the market. “The enterprise has nothing against such a step provided that this process will be legalized, since at time being the suspension of the participation in the SE Guaranteed Buyer balancing group could be grounded only with the repair works,” Maksym Dyrenko informed.
Oleksandr Symomenko, in turn, added that the TSO has been actively involved in drafting regulations on joining-leaving the balancing group of SE Guaranteed Buyer, and warned that “the RES producer who has left the balancing group automatically becomes a participant of the balancing market and is obliged to submit on regular basis to the TSO applications for full capacity loading and unloading”.
It should be noted that both speakers encouraged the webinar participants to actively participate in the relevant working groups on amendments to the legislation, as such a format allows to form a common position of all market participants on a particular issue related to the operation of the market.
Concluding the webinar, Andriy Konechenkov, Chairman of the UWEA Board, congratulated once again all the participants on the Global REnew Day and expressed hope for a quick resolution to the ongoing problem and further stabilisation of the functioning of the electricity market in Ukraine.
Recording (in Ukrainian): https://www.youtube.com/watch?v=9cVZdS07dNA&t=582s
