In 2024, Ukraine significantly increased its electricity imports, raising the volume by 5.5 times compared to the previous year, reaching 4.4 million MWh. According to monitoring data from ExPro Electricity, the largest electricity supplier was Hungary, accounting for 39% of total imports. Other suppliers included Slovakia (23%), Romania (18%), Poland (14%), and Moldova (5%). The largest importers were the following companies: D.TRADING LLC, LLC DE TRADING, JSC “ECU”, DNEPROSTEEL-ENERGO LLC, LLC AXPO UKRAINE, and EUROMIN ENERGY, LLC.
As of December 1, 2024, the maximum volume of electricity imports from Europe to Ukraine was increased from 1.7 GW to 2.1 GW.
How did this become possible?
A major achievement for Ukraine was its connection to the unified continental European power system, ENTSO-E, and notably, this occurred one year ahead of the originally planned schedule.
The timeline of Ukraine’s synchronization with ENTSO-E is as follows:
- February 24, 2022 – The Ukrainian power system began operating in isolation due to russia’s full-scale invasion of Ukraine;
- February 28, 2022 – European energy ministers approved Ukraine’s connection to ENTSO-E;
- March 16, 2022 – The Ukrainian power system was synchronized with ENTSO-E;
- April 26, 2022 – Ukrenergo was granted observer member status in ENTSO-E;
- November 28, 2023 – ENTSO-E confirmed that Ukrenergo had fulfilled the requirements of the Technical Measures Catalogue;
- December 14, 2023 – The ENTSO-E Assembly, the highest governing body, granted Ukrenergo full membership status in ENTSO-E.
Types and Conditions of Participation in Auctions
In accordance with the legislation of Ukraine and the European Union, granting access to cross-border transmission capacity for electricity through interconnections to market participants via auctions is one of the responsibilities of the Transmission System Operator (hereinafter referred to as the “TSO”). The sole TSO in Ukraine is NPC "Ukrenergo".
Auctions are conducted in compliance with Ukrainian legislation regarding electronic documents and identification.
Each auction allocates not only the available transmission capacity planned for that specific auction but also any capacity that was not distributed in previous auctions or was returned to the auction office.
Only electricity market participants are eligible to take part in the auctions. According to the Market Rules, electricity market participants include: aggregators, producers, electricity suppliers, traders, small distribution system operators, the Transmission System Operator (TSO), distribution system operators, the market operator, energy storage system operators, the guaranteed buyer, and consumers (including active consumers). All auction participants have equal opportunities to obtain transmission rights for electricity.
Since 2023, both unilateral and joint auctions have been introduced for the allocation of cross-border interconnection transmission capacity.
Unilateral allocation for the Ukraine-Poland interconnection (Dobrotvir-Zamość) and joint allocation for the Ukraine-Romania and Ukraine-Moldova interconnections are conducted via the TSO’s auction platform.
Participation in the auction requires the prior conclusion of an access agreement, obtaining access to the auction platform, and providing the necessary financial security. To conclude the access agreement, the applicant must submit a request and the required set of documents to the TSO. The auction office verifies all submitted information, after which a decision is made regarding registration or refusal.
Registered auction participants are required to provide financial security to guarantee payment based on the auction results. This security may take the form of a bank guarantee or a monetary deposit, which will be used by the auction office to confirm participation in the auction.
Transmission capacity is allocated among participants who offer the highest price, in accordance with the principle of priority allocation of requests.
Joint coordinated allocation of cross-border transmission capacity for the Ukraine-Poland, Ukraine-Hungary, and Ukraine-Slovakia borders has been implemented on the European allocation platform JAO.
To participate in joint auctions conducted by JAO, participants must complete several registration steps:
- register on the support service platform to manage requests;
- submit the required set of documents no later than 9 business days before the auction date.
After registration, a user account is created for participation on the JAO trading platform.
According to the Market Rules, auction winners must provide the TSO with an import schedule for each cross-border interconnection, taking into account the results of the daily auctions, by gate closure time for the nomination physical transmission rights, as specified on the relevant platform.
Who can benefit from electricity imports?
As of now, electricity import capacity is utilized at less than half of its potential, primarily due to high prices in Europe. According to data from JSC "Market Operator", on March 12, the day-ahead market base load index in Ukraine was €106.00/MWh, while in Poland it was €124.31/MWh, in Slovakia €124.03/MWh, and in Romania €123.42/MWh.
However, the situation was different in the summer of 2024: on July 3, Ukraine’s base load index stood at €144.83/MWh, while in Poland it was €114.85/MWh, in Slovakia €94.49/MWh, and in Romania €116.95/MWh. This was partly due to frequent outages and extreme heat. Nonetheless, similar market conditions are expected in the upcoming summer, suggesting that electricity imports could once again become economically advantageous.
On November 26, 2024, the Government of Ukraine updated the rules for electricity imports during martial law by adopting Resolution No. 1342. Under the new provisions, during periods of scheduled hourly power outages, companies that import at least 60% of their hourly electricity consumption will not be subject to electricity restrictions. This measure helps reduce the load on the domestic electricity market. Previously, the required import share for exemption was set at 30%, 50%, and 80%.
These changes create favorable conditions for businesses, especially energy-intensive enterprises, by ensuring a stable electricity supply and reducing economic risks amid unpredictable energy restrictions.
An important issue is the guarantee of origin for electricity. It is worth noting that recognition in Ukraine and international trade in guarantees of origin issued in Europe — and vice versa — will only become possible once Ukraine’s National Energy and Utilities Regulatory Commission (NEURC) obtains membership in the Association of Issuing Bodies (AIB). On May 30, 2024, by decision of the AIB General Assembly, Ukraine, represented by NEURC, officially acquired membership status in the Association. NEURC anticipates that full integration into the AIB will be completed by the end of 2025.
Guarantees of origin for Ukrainian businesses provide an opportunity to ensure the competitiveness of Ukrainian products in EU markets, alleviate the impact of the Carbon Border Adjustment Mechanism (CBAM), and more.
In summary, Ukraine is actively developing mechanisms for electricity import, which enables the expansion of energy capacity and offers strong opportunities for business growth. The coordinated use of cross-border auctions, along with ongoing legislative updates, supports Ukraine’s integration into the European energy network and strengthens its energy independence.