Ukrenergo intends to hold new auctions for balancing capacity late this year or at start of next year – company head

Ukrenergo may hold additional long-term auctions for ancillary services at the end of this year or the beginning of the next year after consultations with businesses, said acting chairman of the company's board Oleksiy Brekht.

"We plan to do this. I think we will make a decision next week: either the auction will be at the end of this year, or right at the beginning of the next one," he said in a blitz interview with the Energy Reform online portal.

Brekht explained that the system operator intends to analyze why the results of the first ever auctions held in August did not cover all of the company's needs for balancing capacity.

"We want to study the current situation this week and next week and understand why the second auction did not go as well as the first, when investors committed to close almost the entire volume of capacity we offered (99 MW). We want to discuss this with the market to feel it," the head of Ukrenergo noted.

As reported, in August 2024, Ukrenergo held two long-term auctions for ancillary services for 99 MW and 1,000 MW for the first time. According to the results of the first auction for the provision of frequency support reserves, the need for new capacities was almost completely closed, at the second auction for the provision of automatic frequency restoration reserves, the need was closed by 41% for unloading and by 62% for unloading/loading.

The essence of the auctions was that their winners receive a five-year contract, under which Ukrenergo undertakes to pay for energy system balancing services at the price established at the auction. According to the terms of the auctions, the winners must build generating capacities (gas plants and biomass power plants) and energy storage systems to provide these services by October 2025.