Obtaining a Trading License: Choosing Between Supply and Resale

Recently, a client approached us wanting to engage in the resale of electricity, requiring an appropriate license. Since a license for resale (trading) is less common than an electricity supply license, we immediately suggested obtaining a supply license, as it offers broader opportunities. Essentially, suppliers can also function as traders, while traders cannot act as suppliers since they cannot deliver electricity to end consumers. The client hesitated a bit, so we had to provide a more detailed explanation of the difference.

So, using this case as an example, we will illustrate the rights you'll gain by becoming a participant in Ukraine's energy market with a license for supplying electric energy, and what rights you'll have with a license for reselling electric energy. If you're seeking not just information but also expert assistance in entering the electric power market, reach out to our specialists. You'll receive not only professional guidance on license selection but also comprehensive support throughout the acquisition process, saving you significant time and effort.

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License for Supplying Electricity vs. Trading License: What to Choose for Market Participants and Why?

What rights does a license for supplying electricity grant, and what about a trading license? The primary function of suppliers is intended for supplying electricity directly to end consumers. However, in practice, suppliers are not deprived of the right to trade among themselves within Ukraine and to export or import electricity through the Single Auction Platform (SAP). A trading license only allows for resale and does not grant the ability to supply electricity to end consumers, such as households, and so on.

And now a logical question arises: if a trading license grants less benefits than a supply license, then why is it necessary?

1.      Not everyone wants to supply electricity to end consumers: The reality is that not all participants in the electricity market are interested in supplying electricity directly to end consumers. Many are intrigued by the opportunities presented by buying, selling, and resale activities. This interest is especially heightened by the possibility of accessing the international market through the Single Auction Platform.

2.      Traders face fewer requirements compared to suppliers:

• Less stringent website requirements: Although both types of licenses require a website, traders may have less information on their site compared to suppliers. For example, traders may only need to provide their full contact information and a link to the regulatory acts governing their activities. Meanwhile, suppliers must provide a sample electricity supply agreement, delivery terms, dispute resolution procedures, and so on.
• Not obligatory to have a call center for consumers: There is no requirement for a consumer service center, so traders do not need to ensure its accessibility to individuals with disabilities.

Therefore, after hearing our explanations, the client decided that a trading license suited him best. We then entered into a contract with him and took responsibility for obtaining the license from start to finish: we developed a website meeting the aforementioned requirements, filled out the application, collected the necessary information, and prepared other required documents. Subsequently, we scheduled a date and time for document submission through the electronic portal using the client's electronic digital signature (EDS) via remote computer access software. It's worth noting that documents for trading activities, as with all documents at the National Energy and Regulatory Commission (NEURC), are submitted exclusively in electronic format, requiring an electronic digital signature.

If you require a trading license (for the resale of electric energy), a license for supplying electric energy, or other services related to the electricity market, don't hesitate to contact our team. Our approach to each client is built on years of successful practice in this field and tailored attention. With our extensive experience, we can efficiently obtain the licenses mentioned above and seamlessly integrate your company into the electricity market. We not only assist in obtaining the license but also offer comprehensive support thereafter, if necessary.

Don't delay—become one of our clients today, and we'll ensure your success in obtaining licenses for participants in the electricity market!