Ukrenergo has assessed the impact of the elimination of preferential gas rates for power plants

Ukraine’s power grid does not currently require gas-fired power plants to operate continuously under preferential gas supply terms; however, their role will be crucial this winter. 

This was reported by Roman Grabchak, Head of the Balance Reliability Department at NPC Ukrenergo.

According to him, if gas-fired generation stops due to the cancellation of preferential gas tariffs, this could lead to an increase in power outages even during the summer.

“The system does not require round-the-clock operation of gas-fired generation under PSO conditions or under any other circumstances. Currently, shortages are observed only during peak hours, but in winter they will be round-the-clock. The PSO gas price level is likely necessary, especially if there are low price caps on the electricity market,” Grabchak noted.

Currently, electricity generation volumes at gas-fired power plants are lower compared to early March, but there has not yet been a significant decline. Based on previous years’ experience, these volumes will decrease in the future due to warmer weather and the disconnection of heat consumers.

According to Ukrenergo’s estimates, a complete shutdown of gas-fired generation operating under preferential tariffs could lead to additional energy consumption restrictions in winter and even partially in summer. Grabchak also noted that many newly built gas-fired power plants position themselves as cogeneration plants to obtain preferential gas rates.