ELECTRICITY MARKET REFORM IN UKRAINE

Abstract

Problem setting. Ukraine must reform the electricity market to ensure the energy security by diversifying the energy sources, to integrate with the EU market, to create the competitive conditions in the energy market. We should note that even with the positive world electricity reforming experience, the choice of a national model is the highly individual process that is conducted very carefully and in stages.
Target research. The aim of this article is to study the basic directions of reforming the electricity market. The object of the research is the legal relations on the energy market in Ukraine in terms of reforms and integration with the European market. Analysis of resent researches and publications. Today the researches in the alternative energy field are usually carried out in the economic and technical aspects by such scientists as Kontorovich A. E., Geletukha G. G. and others. In legal doctrine the energy issues consider by S. A. Svirkov, S. D. Bilotskyy, B. Kyshko-Yerli, O. Bytiak and others, but the issues of the Ukrainian energy system reforming haven’t been studied adequately. Article’s main body. Today in Ukraine operates a mixed market model with single buyer with the elements of market with unregulated wholesale trade. The law «On principles of functioning of electricity market» provides the introduction of bilateral contracts market and balancing market. Ukraine should create a competitive energy market and should connect to European ENTSO-E energy system after 2020, but it will be difficult due to the presence of monopolies in the market.
The legislation in this area ( «On electricity market» and «On National Commission of the regulation in the energy and public services fields (NCREPS)») should implement a phased liberalization of the market with following steps: restructuring (separation of generation, transmission, distribution and supplying, unbundling of vertically integrated companies); differentiation of various energy markets with its competition (competition in the retail, new participants accessing); regulation (establishing of independent regulator and providing the access of the external producers, stimulating regulation of transmission and distribution networks); privatization and approval of ownership by new subjects. Conclusions and prospects for the development. Particular attention in the new legislation should be paid to the following issues: guaranteeing of the independence and setting out the power of the National Commission of the regulation in the energy and public services fields; establishing of independent structures for transmission and distribution of the electricity (separation of the activities, unbundling of vertically integrated companies); determining the legal regime of small producers who are also the consumers and they won’t be able to cover the cost of joining the network and will require the special government incentives; establishing the energy ombudsman post.