On June 25, 2020, the European-Ukrainian Energy Agency sent to the State Regulator (NEURC) proposals on the mechanism of compensation for the cost of unsold electricity through the execution of the system operator’s instructions to limit generation.

In recent months, work has continued on the detailed elaboration of other options, as a result of which EUEA together with other industry associations has prepared a full package of amendments to the Market Rules, Transmission System Code, Procedure for setting tariffs for services on dispatching (operational-technological) management, Methods of pricing of ancillary services for the implementation of the mechanism of compensation to RES producers through the provision of ancillary services of reducing the burden of RES producers under the command of the TSO on operational safety.

This mechanism provides the following:

  1. An ancillary service is being introduced to reduce the load of RES producers under the TSO command on operational safety (hereinafter – AS of reducing the load of RES producers).
  2. RES producers have a direct relationship with the TSO to provide such AS. The basis is a contract on the provision of AS to reduce the burden of RES producers. The conclusion of a contract is a prerequisite for obtaining compensation by RES producers.
  3. AS is provided by RES producers with a combined capacity of 1 MW or more.
  4. RES producers are obliged to ensure the ability of the equipment to provide AS of reducing the load (equipment requirements are defined by the Transmission System Code).
  5. The volume of actually provided ASs is calculated by RES producers in accordance with the Methodology for calculating the volume of electricity shortfall by RES producers (Annex to the Market Rules) based on the results of actual activation of this service by the transmission system operator.
  6. The source of payment for the ASs is the tariff of the transmission system operator for dispatch management services. To avoid duplication of payments, it is proposed to set the tariff for dispatch management separately for producers and other users of the transmission system. Relevant changes to the Procedure for setting tariffs for dispatch management are attached. Given that the issue of compensation to RES producers as a result of TSO operational safety commands should be considered carefully and not create problems for market participants in the future, we ask you to consider the compensation mechanism proposed by EUEA and the package of amendments to the acts of the NEURC for its implementation. We will be glad to make a presentation of an alternative option for the Members of NEURC, Commission specialists and to answer all questions.

The proposals were prepared with the assistance of the EUEA Energy Advisor 2020 IMEPOWER and supported by EUEA members.