Agreement on Synchronisation with ENTSO-E signed

On 28 June 2017 “UKRENERGO” NPC SE (state-owned operator of the Ukrainian Power Grid) signed an Agreement on the terms of Ukraine’s accession to the European Network of Transmission System Operators (the “ENTSO-E”) in Brussels.

The Agreement is a starting point for the beginning of the integration of the Ukrainian Power Grid into the energy system of continental Europe, meaning the two power systems shall be synchronized.

It is worth mentioning that Ukraine already has electricity interconnectors with its neighbouring EU countries Poland, Slovakia, Hungary and Romania. However, only Burshtyn Thermal Power Plant (2,400 MW), belonging to DTEK Zakhidenergo (4,700 MW in total), located in the Ivano-Frankivsk region of Ukraine, is synchronised with the European grid (which is why it is called the “Burshtyn island”) and it is only capable of exporting up to 650 MW of electricity to Europe due to the limited capacity of the interconnectors. The rest of the Ukrainian Power Grid is synchronised with Russia, Belarus and Moldova. This significantly limits Ukraine’s electricity export and its import capabilities.

It is expected that the actual synchronization with ENTSO-E shall be possible after the new energy market model is fully implemented in Ukraine in accordance with the Law of Ukraine “On Electricity Market of Ukraine”, which aims to liberalize the Ukrainian electricity market in compliance with the “Third Energy Package” of the European Union.

The Agreement contains, inter alia, a catalogue of requirements (to enable accession to the European energy system) and a road map. The next steps to be undertaken shall be:

• completion of technological and regulatory requirements (in accordance with a catalogue of requirements in the Agreement);
• switching from synchronized operation with power systems of the CIS countries to isolated operational mode; and
• synchronization of the Ukrainian Power Grid with the European energy system.

Synchronization will have a positive impact on Ukraine’s energy security, will boost the export of Ukrainian electricity to European countries (according to Ukrenergo’s expectations – from 5 bln kWh to 18-20 bln kWh) and also promote competition on the Ukrainian electricity market.