Changes in the Electricity Market Inclusion Procedure: How to Adapt to New Requirements

In August 2024, a Client approached us with the intention of entering the electricity market. As a result, they faced a series of important tasks: establishing a company, obtaining a license, and entering the electricity market with a comprehensive solution. Naturally, the Client needed guidance and training on what to expect at this stage and how to proceed.

It is worth noting that the client turned to us because we offer a comprehensive solution for every step of this process. Furthermore, our services coincided with updates to the procedure for entering the market. "Another update?" you may ask. Yes, the electricity market in Ukraine is updated almost every month, and this makes our services even more relevant and essential for those who aim to operate successfully amidst these changes. So, let’s explore the changes our client had to adapt to and what those entering the energy sector need to know.

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Registration and ECRB Code

To operate in the electricity market, the first crucial step is obtaining an ECRB code. Under the new requirements, all market participants were required to be included in the wholesale market register by February 2024. This process is regulated by the National Energy and Utilities Regulatory Commission (NEURC). In addition to being registered, each participant is assigned an identification code — the ECRB code. This has become another essential step for all market participants, adding one more code to manage.

Currently, the procedure for entering the electricity market is as follows: after obtaining a license, such as for electricity supply, the license holder must immediately register in the NEURC's wholesale suppliers register, even if they are not a wholesaler. Why is this necessary? It is difficult to draw a clear line between wholesale and retail electricity trading, and in practice, everyone involved in this sector is now considered part of the wholesale market.

Why is it so important to obtain an ECRB code? Without it, it is impossible to sign contracts with Ukrenergo for electricity transmission or balancing settlement, which in turn prevents the conclusion of agreements with the Market Operator or accreditation on the Ukrainian Energy Exchange. These steps are all interconnected, and the absence of an ECRB code can jeopardize the ability to fully operate on the market.

In short, entering the NEURC's wholesale market and obtaining the ECRB code from them is a key step. It is worth noting that, alongside obtaining the ECRB code, it is also possible to obtain the EIC code from Ukrenergo — another important registration for successful market operations.

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Escrow BRP Account and Other Key Changes

Recently, electricity market participants have encountered the requirement to open an additional escrow account — the escrow BRP (balance responsible party) account. Previously, escrow accounts could only be opened after a contract was signed with the Market Operator. However, now it is important to begin opening the escrow BRP account almost immediately. This is a condition set by Ukrenergo for entering into contracts for electricity transmission and imbalance settlement. Furthermore, this account can be opened concurrently with obtaining the ECRB and EIC codes.

The other two escrow accounts (for trading on the Ukrenergo platform and for the Market Operator) shall still be opened after entering the market, meaning after contracts are signed with the respective institutions. So, what is the purpose of the escrow BRP account? This account is designed to manage imbalances if they occur. As for other stages of market inclusion, such as signing contracts with the Market Operator and the Ukrainian Energy Exchange (UEE), no new changes have been introduced so far.

It’s always challenging to work under changing conditions, especially when these changes are happening now or have just taken place. However, this is not new to us, and we quickly adapt to new circumstances. For this client, we connected them to all the necessary platforms. Following that, by separate agreement, we: 

• Conducted training for their staff on how to use the Ukrenergo and Market Operator platforms.
• Clarified which reports need to be submitted, where to fill them out, and how to properly manage documentation. 

Are you planning to enter the electricity market and want all the legal aspects of the process handled by qualified specialists? We are ready to take care of all the legal matters and ensure you have peace of mind during the implementation of your project. Contact us for professional support.