Consulting and reporting on the Ukrainian energy market

Training for Operations and Reporting in the Electricity Market

If you're looking to gain expertise in presenting both essential company reports and specific reports to the regulatory authority (NKRECU) in the electricity market, our company offers comprehensive training services tailored to these processes.

Our training courses cover a wide range of reporting requirements, equipping you with the knowledge and skills to effectively manage your company's reporting obligations in accordance with regulatory standards and NKRECU guidelines. 

For details on training options, refer to the packages above or consult with our specialists.

Taxation in the Ukrainian Electricity Market

On the Ukrainian electricity market, businesses operate under the general taxation system. As electricity traders, companies are also responsible for Value Added Tax (VAT) payments.

Under the general taxation system, the corporate income tax rate is set at 18%.

The Value Added Tax rate applicable to electricity trading activities is 20%.

For employees, obligatory contributions include the Single Social Contribution (minimum of 1474 UAH), Personal Income Tax (18%), and Military Tax (1.5%).

Furthermore, in addition to meeting NKRECU reporting requirements, companies engaged in electricity supply or trading must comply with standard reporting obligations applicable to all businesses. Our company takes care of your reporting needs as an electricity supplier or trader, including accurate tax calculations and timely submission of mandatory reports.

Inclusion to Additional Oblenergos

When registering in the Ukrainian electricity market, one important step is to establish connections with Oblenergos. Typically, new participants choose a specific Oblenergo to partner with. However, in our experience, there have been cases where companies opted to connect with all Oblenergos across Ukraine simultaneously.

As your presence and activities in the Ukrainian electricity market evolve, you may find the need to expand and connect with additional Oblenergos. Rest assured, we are well-equipped to assist you in this process.  

How the Electricity Market Works in Ukraine

The electricity market in Ukraine comprises several key players, including producers, traders, electricity suppliers, consumers, distribution system operator, guaranteed buyer, market operator, and transmission system operator.

Electricity Producer: These are licensed companies responsible for generating electricity in Ukraine. Power is generated through nuclear, thermal, and hydro power plants, as well as alternative energy sources.

Electricity Trader: Licensed traders engage in the buying and selling of electricity, exclusively for resale purposes. They do not supply electricity directly to end consumers but focus on trading activities.

Electricity Supplier: Licensed suppliers are authorized to sell electricity to end consumers. They enter into supply contracts with consumers and can also purchase electricity for resale purposes.

Consumer: Consumers can be individuals, including sole proprietors (individual entrepreneurs), or businesses that purchase electricity for their own consumption. They are the final users of electricity.

Distribution System Operators (DSOs) is a company responsible for the safe, reliable, and efficient operation, maintenance, and development of the distribution system. They ensure the long-term capacity of the distribution system to meet the justified demand for electricity distribution while considering environmental protection requirements and energy efficiency. Since January 1, 2018, the functions of the DSO have been assumed by regional electricity distribution companies (oblenergos) in accordance with their licenses for electricity distribution.

Transmission System Operators (TSOs) is a licensed company that carries out activities related to the transmission of electricity. The TSO is responsible for operating, dispatching, maintaining, and developing the transmission system and international power transmission lines. In Ukraine, these functions are performed by the State Enterprise "NPC Ukrenergo."

Guaranteed Buyers (GBs) are state-owned enterprises that represent the interests of citizens and the state in the electricity market. They purchase electricity from producers who receive a "green" tariff and ensure the functioning of the Public Service Obligation (PSO) mechanism. GBs also organize auctions for renewable energy generation.

The Market Operator (MO) is responsible for organizing electricity trading in Ukraine's Day-Ahead Market (DAM) and Intraday Market (IDM). The MO plays a crucial role in maintaining a balance between electricity supply and demand in the market.

Structure of the Ukrainian Electricity Market

The Ukrainian electricity market operates through various interactions among market participants involved in buying, selling, transmission, distribution, and supply of electricity. Here are the main market segments and their characteristics:

Bilateral Contracts: These involve direct agreements between two participants outside the organized market segments. Electricity is bought and sold based on mutually agreed terms, except for consumer supply contracts.

Day-Ahead Market (DAM): This segment facilitates trading of electricity for the next day at competitive prices determined through open competition.

Intraday Market (IDM): After the Day-Ahead Market concludes, participants can continue trading electricity during the delivery day, allowing for adjustments and additional transactions based on real-time needs.

Balancing Market (BM): The Balancing Market ensures real-time balancing of electricity supply and demand within the current day. Participants trade electricity to address any imbalances, and prices are determined according to market rules.

If you are entering the Ukrainian electricity market and wish to learn how to navigate it effectively or prefer to entrust your reporting obligations to professionals, feel free to reach out to us!