To implement the provisions of Item 12 Part One Article 58 and Item 8 Part One, and Item I Part Two Article 57 of the Law of Ukraine “On Electricity Market,” NEURC (after this referred to as the Regulator) approved changes to the Electricity Retail Market Rules having guaranteed the right of all retail electricity customers (both household and non-household) to sell the surplus energy generated by their own generating plant to the power supplier at a contractual price.
According to USAID Energy Security Project (ESP) experts, the Regulator’s decision primarily focuses on developing distributed generation for business entities with a generating plant capacity of up to 5 MW in the retail electricity market. These changes are useful to encourage the development of cogeneration by legislative regulation of generated surplus electricity. Such cogeneration plants are used by heat supply utilities (HSU) to ensure the sustainable operation of heat- and power supply systems in their facilities. Besides, they could address power supply issues of local critical infrastructure facilities during blackouts.
“The NEURC’s Resolution removes one of several obstacles to the development of distributed generation and usage of available district heating (DH) infrastructure in Ukrainian cities. We need further governmental decisions to address the unused potential of existing DH systems in cities to benefit customers.” Diana Korsakaite, the USAID ESP Heat Sector Lead, says.
As USAID ESP noted before, the utilization of cogeneration plants as a means of simultaneous generation of electricity and heat within one technological process has several advantages:
- cogeneration plants, especially if they are installed in DH facilities, can provide the heat supply utility with its energy, particularly during power interruptions during emergencies, and ensure power supply for critical local infrastructure, including water supply and drainage, hospitals, etc.;
- cogeneration plants can help balance Ukraine’s energy system and develop efficient DH systems to achieve the respective energy efficiency performance under Directive 2012/27/EU and the Law of Ukraine “On Energy Efficiency,” as well as ensure an important role in balancing the energy system during the “green” transition;
- cogeneration plants have a set of technical solutions that allow using the reserve fuels and local energy resources in case of emergency. At the same time, the prime cost of generated electricity is lower than that generated by diesel generators, while the lifetime of cogeneration plants is much longer. Hence, cogeneration can help not only supply heat to Ukrainian cities but also facilitate decarbonization and energy efficiency.
Further improvement of regulatory provisions will enhance the resilience of Ukraine’s energy system and strengthen the energy security of Ukraine during the war.