Ukrenergo’s tariff for electricity transmission in 2025 to stop company’s debt buildup

The adoption of Ukrenergo tariff for electricity transmission in 2025 in the amount of UAH 686.23 per MWh (excluding VAT), which is almost 30% higher than the current one, will ensure the company's debt buildup stops, which has now reached approximately UAH 45 billion due to the deficit tariff, according to CEO of the company Oleksiy Brekht said.

"For the first time in the last few years, the transmission tariff takes into account almost the full volume of the company's special obligations to compensate for the production of 'green' electricity. Its adoption will definitely ensure the cessation of the increase in debts under the PSO," he said during a meeting of the national energy regulator the National Commission for State Regulation of Energy and Public Utilities on Thursday in online mode, an Energy reform correspondent reports.

"Critical underfunding of the tariff in previous periods led to the company not receiving UAH 60 billion. Accordingly, we have a current debt of almost UAH 45 billion to market participants, primarily to Guarantee Buyer, suppliers of universal services and on the balancing market," he said.

According to Ukrenergo head, more than 50 of the company's facilities were destroyed during the war, but it continues to ensure the normal operation of the energy system, including due to the effective attraction of international financial assistance. "Over the past two years, we have attracted almost UAH 20 billion in funds, UAH 16 billion of which is a grant component. Thus, we ensured both the acquisition and delivery of important equipment, and the rapid completion of work to restore the transmission system," Brecht said.

The adoption of the tariff in the specified amount was also supported by the heads of renewable energy associations.

"Our association fully supports such a tariff. According to our calculations, this can ensure 100% settlements with the renewable energy sector in 2025, there will be no increase in debt. But we call on the regulator to monitor actual and projected expenses quarterly and adjust the tariff to prevent the formation of a deficit of funds," Chairman of the Board of the Ukrainian Wind Energy Association Andriy Konechenkov.

"The Solar Energy Association supports changes to the tariff. This will improve the situation on the energy market and the financial position of the transmission system operator, and, accordingly, will affect industrial consumers. If the energy market works better and with a reduction in debt, then industrial consumers will be able to receive electricity without interruption," Chairman of the Board of Association of science and education Ukraine Vladyslav Sokolovsky said.

According to Director of the European-Ukrainian Energy Agency Anastasia Vereshynska, such a tariff will contribute to the development of distributed generation in Ukraine.

At the same time, representatives of industrial enterprises and their associations spoke out against increasing the Ukrenergo tariff for electricity transmission.

"It is clear that the energy system needs to be supported, but a 30% increase will hit the country's economy hard. Our enterprise is currently idle, we planned to launch it soon or at the beginning of the year, but with such tariffs, we probably won't launch. If large consumers stop, there will be a smaller transmission volume, and the tariff will have to be raised again. And all electrometallurgical enterprises will probably stop. Our position is not to raise the tariff," Deputy Chairman of the Board for Economics and Finance at Marhanets Mining and Processing Plant Volodymyr Bondar said.

According to Ecology and Technology Manager at the Ukrcement Association Pavlo Bondarev, raising transmission tariffs at this level will negatively affect the production of cement, which is the basic material for the country's recovery.

"The transmission tariff should be UAH 528 per MWh, and for dispatching UAH 56 per MWh. Only in this way can we talk about a balanced recovery," Bondarev said.

As noted by Executive Director of the Association of the Mining Industry Ksenia Orynchak, approximately 40% of the 100 processing plants of the association have stopped precisely because of the state tariff policy, since electricity accounts for 30 to 50% of the cost of production.

"Here is an example. Zavalievsky Graphite, the only enterprise mining graphite ore and a critical enterprise for the 'green' transition, has stopped. It is necessary to introduce certain benefits specifically for the mining industry," the OEA said.

"Consumer proposals were not taken into account at all when considering the tariff. For industrial consumers, this is an additional UAH 27 billion in expenses. We express categorical disagreement with such a tariff," Director of the department of ecology, energy and land economy of the Federation of Employers of Ukraine Olha Kulik said.

According to Head of the Federation of Metallurgists Serhiy Bilenky, after increasing the tariff for transmission, the industry's expenses will increase by UAH 1.6 billion per year, and approximately 30% of enterprises have already stopped.