The Ukrainian energy sector is grappling with a significant debt crisis that has persisted for several years, necessitating urgent governmental intervention. According to Anastasia Vereshchinska, director of the European-Ukrainian Energy Agency, market participants currently owe the National Energy Company of Ukraine (NEC) “Ukrenergo” approximately 46.4 billion UAH, while the operator itself is burdened with debts exceeding 30 billion UAH.
This financial predicament is exacerbated by the presence of protected consumers, including state-owned mines and municipal enterprises, which cannot be disconnected from electricity supply due to regulatory constraints. Vereshchinska emphasized that the total debt owed to “Ukrenergo” stands at 46.4 billion UAH, inclusive of VAT.
She pointed out that the situation is further complicated by excessively long payment terms within the balancing market. Electricity suppliers often face payment delays ranging from one to one and a half years, effectively stalling the development of new balancing capacities.
“The payment timelines in the balancing market for electricity suppliers extend to about 12 to 18 months, which is exceedingly prolonged,” she noted. Vereshchinska believes that mechanisms to address these issues already exist, such as mutual settlements among market participants and the utilization of resources from state energy companies.
However, the implementation of these solutions requires active government involvement and the identification of funding sources to settle the debts of protected consumers. She also highlighted that resolving the debt situation in the balancing market is crucial for attracting investments in energy storage systems and other flexible capacities necessary for the stable operation of the energy system.
In a related development, Vitaliy Zaychenko, head of the board of “Ukrenergo,” stated that the debt owed by balancing market participants has reached unprecedented levels since the market’s inception. The accumulation of debts is attributed to several problematic consumer categories that fail to make complete payments.
Zaychenko mentioned that specific measures are currently being developed to stabilize the situation, which will include amendments to Cabinet regulations and legislative initiatives. Vladyslav Sokolovskyi, head of the Solar Energy Association of Ukraine, indicated that debts in the balancing market could potentially reach 50 billion UAH.
Earlier, Energy Minister Denys Shmyhal reiterated that reforming the balancing electricity market remains a key focus in the transformation of Ukraine’s energy sector.
The Ukrainian energy sector is facing a critical debt crisis, with market participants owing substantial sums to "Ukrenergo." The situation is complicated by regulatory challenges and long payment delays, prompting calls for government intervention to stabilize the market.