Ukraine has been part of the European Network of Transmission System Operators for Electricity (ENTSO-E) for almost a year. On February 24, 2022, Ukraine started scheduled testing of the power system in island mode, which was supposed to last three days and prove that Ukraine’s power system is resilient as a prerequisite for synchronization with the European power system in 2023.
Russia’s full-scale invasion of Ukraine on the same day, February 24, caused Ukraine to be disconnected from the aggressor’s power system forever. In less than a month, on March 16, 2022, one of the most important events occurred for the development and security of Ukraine’s energy sector – synchronization of the Ukrainian and Moldovan power systems (UA/MD) with ENTSO-E. This emergency interconnection is an important milestone in Ukraine’s integration into European energy markets.
Preparation for synchronization
Before synchronization with ENTSO-E, only a small part of Ukraine’s power system, known as the Burshtyn Power Island trading zone, was in synchronous operation with the European energy network, while the biggest trading zone of Ukraine’s Integrated Power System (Ukraine’s IPS) was synchronized with the power system of russia and belarus. Therefore, it was dependent on the decisions of russia and its satellite. Major systematic efforts by Ukraine with the support of the international community have been key to the successful synchronization of Ukraine’s IPS with ENTSO-E, the preparation for which began in 2017 when Ukrenergo signed an agreement on the conditions for future interconnection of Ukraine’s IPS with the power system of Continental Europe.
In September of 2021, with the support of USAID ESP, the technical staff of Ukrenergo completed a practical 10-module training on modeling and analyzing the power system modes using PowerFactory software from DIgSILENT. The training was in line with a Ten Year Network Development Plan (TYNDP), and it enhanced the Ukrenergo’s capacity to successfully integrate Ukraine’s IPS into ENTSO-E.
In the framework of this project, USAID ESP prepared a mathematical model of the power systems of Ukraine and Moldova and modeled several emergency scenarios for an emergency replacement of generation and load. Information on detected risks and relevant recommendations were given to Ukrenergo and approved by ENTSO-E.
Upon completion of the tests, USAID ESP developed a report with the test results, which confirmed the readiness of Ukraine’s IPS for integration with ENTSO-E. It was approved by the Project Group of ENTSO-E (ENTSO-E PG).
After an urgent request by Ukrenergo and Moldova for emergency synchronization, the TSOs of Continental Europe agreed to start a trial synchronization of the power system of Continental Europe with the power systems of Ukraine and Moldova on March 16, 2022. Such an acceleration of the synchronization project was possible thanks to studies previously conducted by ESP and measures taken by Ukrenergo to minimize risks.
Synchronization with ENTSO-E means that:
- russia and belarus can no more influence technical and economic aspects of Ukraine’s power system operation;
- the reliability of the power system operation has been improved through harmonized cooperation with European partners;
- in case of an electricity surplus, Ukraine can export commercial electricity earning money from it; in case of a deficit, Ukraine can import electricity from the EU, ensuring the reliability of electricity supply to the Ukrainian consumers;
- the energy sector synchronization started the full-fledged integration of Ukraine into other EU markets.
Mutually beneficiary partnership
The synchronization with ENTSO-E opened new opportunities for integrating the Ukrainian economy into the EU. It paved the way for the electricity markets of the EU countries and made import and export operations possible in electricity trading.
Though emergency interconnection in March 2022 did not envisage commercial electricity trading, Ukraine got an opportunity to start electricity trading on the condition that certain technical requirements are met. The export of Ukrainian electricity to the EU enabled electricity market players in the country to increase their income and the liquidity of the domestic market. The latter faced a problem due to a shortage of cash inflow caused by a reduction in electricity consumption during the war and, therefore, its reduced demand and a drop in payment capacity, especially in hostilities and adjacent territories. Currently, Ukraine can use international transmission lines with Hungary, Slovakia, Romania, and Poland to transmit electricity between Ukraine’s power system and ENTSO-E, import and export electricity, and receive emergency assistance to Ukraine’s power system if needed.
Since October 2022, russia’s targeted massive missile attacks have destructed energy infrastructure. The attacks mainly target power plant distribution devices and key substations of the electricity transmission and distribution systems. As a result, since October 11, 2022, Ukraine has been forced to terminate electricity export to stabilize its power system. While russia continues to strike Ukraine’s energy infrastructure facilities attempting to deprive Ukrainians of heat, electricity, and water, USAID helps the Ukrainian people survive during the war.
USAID ESP is already assisting the Government of Ukraine to prepare for the next 2023-2024 heating season. Currently, tenders have been announced to procure 12 automatic transformers to restore damaged facilities of the transmission system for an estimated amount of around USD 40 million.
In January-February 2023, USAID ESP delivered four 110kV SF6 circuit breakers and 12 current transformers to the distribution system operators “Sumyoblenergo”, “Kharkivoblenergo”, and “DTEK Kyivski Elektromerezhi” to restore four damaged high voltage substations. The new equipment will help energy companies promptly reduce the risk of network limitations in electricity distribution, ensure the stability of electricity transmission and distribution, reduce forced outages for consumers, and prepare Ukraine’s IPS for the next winter heating season.
The mentioned equipment worth around USD 163,000 from the 7 million assistance package is part of a larger multi-million technical assistance from USAID to critical infrastructure companies. It aims to prepare Ukraine’s power system for the next 2023-2024 heating season.
Please visit the ESP website to learn more about USAID support through ESP to the energy sector and critical infrastructure companies.
Next steps towards energy European integration
In a short time, Ukraine has made major efforts toward European integration. The steps taken gave the green light to harmonization of the Ukrainian legislation in line with the electrical energy rules and standards in force in the EU. The agenda includes such extremely important tasks as:
- the implementation of joint cross-border capacity allocation auctions,
- integration of a balancing market and an ancillary service market, a day-ahead market, and an intraday market,
- implementation of market monitoring and surveillance under REMIT (EU Regulation No 1227/2011 on Wholesale Energy Market Integrity and Transparency),
- an activity to improve a forward market in terms of introducing standardized contracts, etc.
On January 19, 2023, USAID ESP, together with subcontractors EGI (Elia Grid International) and KPMG, presented the results of a study, “Analysis of the Market Rules Compliance with the EU acquis,” to the Ministry of Energy of Ukraine, the Energy Community Secretariat, Ukrenergo and the National Energy and Utility Regulatory Commission (NEURC). The presentation covered the key conclusions and recommendations from the Analysis, including details on product standardization in a balancing market and optimization elements related to the current cross-border platforms of the EU (MARI, PICASSO, TERRE, and IGCC Activation Optimization Function (AOF). The long-term goal is to integrate Ukraine into the existing EU platform for the cross-border exchange of balancing services. A roadmap proposed by ESP outlines steps in this direction by implementing general elements for all platforms.