EBRD notes absence of condition for competition on electricity market

The European Bank for Reconstruction and Development (EBRD) today does not see conditions for competition on the wholesale electricity market in Ukraine.

“Will Ukraine reach the goal of creating competition? Let’s be realistic – the industry is oligopolistic. We know the main players. We understand that Energoatom sells electricity at a regulated tariff of Hr 0.57 per kWh, and thermal power plants – at a tariff more than twice as high. We understand that the heat tariff will shape the market price. There are no conditions for competition yet,” Senior Banker at EBRD Olga Yeriomina said at a conference organized by the European Business Association (EBA) in Kyiv on May 21.

In turn, national energy company Ukrenergo CEO Vsevolod Kovalchuk, commenting on the high concentration in the electricity generation market, where the two largest players – Energoatom and DTEK – have about 80 percent of the market, said that the formation of an adequate level of competition in the new market can be possible only after harmonization of the Ukrainian power grid with the European one.

According to him, the import opportunities that open up for Ukraine after the launch of the new wholesale market will not allow competition to be created that will ensure market self-regulation.

“There cannot be a full-fledged competitive market unless we either have intergovernmental interconnections and associations, or partial unions of markets provide for more than 20 percent of domestic consumption, or until we can limit the market power of those players which are operating now,” Kovalchuk said.

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