Principles of the balancing market in Ukraine

3.08.2022
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Principles of operation of the balancing market in Ukraine

In connection with the reform of the electricity market in Ukraine, it was necessary to implement a number of changes that affected the activities of all its players. Now, to work, they need not only to get acquainted with such a definition as “unbalanced electricity”, but also learn how to work with it correctly. The Single Balancing Market was approved by the Law on Electric Energy, which states that each SWP has the right to purchase and sell electricity in order to control supply and demand. In this way, it will be able to correct the existing imbalances. This method allowed to reduce energy costs and improve the accuracy of forecasts between suppliers and buyers of electric energy in the industrial sector.

In Ukraine, a market for additional services has been formed, where you can order the necessary types of work to adjust the frequency and capacity in the UES. This event allows you to maintain the necessary characteristics for obtaining high-quality resources.

What does “unbalanced electrical energy” mean?

This term refers to the difference between the planned amount of electricity and its actual costs.

The energy provider of this type of resource is financially responsible if there is an unbalance, so in order to avoid such situations, it needs to draw up graphs of realized, purchased and consumed energy literally by the hour. Only proper planning and accurate calculations will help eliminate the causes of unbalance. NEK “Ukrenergo” is responsible for calculating the cost of these unbalances. Their activities are carried out in accordance with the agreement that was signed with the OSP.

Any company that supplies this type of resource can become a member of the balancing group, where it can delegate responsibility for unbalances to other energy market providers.

What is the difference between a balancing market and an unbalanced market?

Some consumers may incorrectly think that these terms refer to one sector of the energy market. In fact, there are differences between them that players should be aware of. The balancing market and the unbalanced market are completely different concepts.

In the first case, the participants generating electric energy interact with the OSP represented by Ukrenergo. Energy suppliers do not participate in this event. Energy providers can only work in the unbalanced market, where they sell excess electricity and purchase additional amounts. Often, the purchase of energy is carried out at higher prices than the usual purchase. It is also not profitable to sell excess energy, because the provider has to conclude a deal at the lowest price multiplied by a coefficient of 0.95.

The unbalanced market functions quite differently, since energy providers who work with a large number of clients can manage unbalanced products almost without financial losses.

Novice energy providers are recommended to become a member of the balancing group. It consists of providers that have signed a partnership agreement. Their main goal is to settle unbalances. In this association, only one organization is responsible for the balance sheet.

This law was put into effect with the aim of demonopolizing the Ukrainian energy market. The government believes that the reform will help to attract investment for the development of the market.

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