On August 28, 2023, the USAID Energy Security Project and the Gas Transmission System Operator of Ukraine held a kick-off meeting of the Gas Market Balancing Analysis Project (GMBA Project).
The goal of the GMBA Project is to provide a systemic analysis of physical and commercial balancing in the Ukrainian gas market since the introduction of martial law at the beginning of 2022. The project’s scope includes developing recommendations to improve gas market functioning by introducing effective balancing rules harmonized with the European Union Network Code on Gas Balancing.
While opening the meeting, Justin Goonesinghe, USAID Energy Security Project (ESP) Gas Sector Lead, emphasized that USAID ESP remains committed to supporting the Gas Transmission System Operator of Ukraine (GTSOU). “We are grateful for fruitful cooperation with the GTSOU team and look forward to starting the 6th joint project since the beginning of the war in addition to many emergency procurements to ensure GTSOU resilience and recovery. Following the unbundling of the GTSOU several years ago, we saw a significant development in the Ukrainian gas market, including the wholesale market, liberalization of the retail sector, and general improvements in transparency and competition. A key part of this was implementing the EU Third Package compliant regime for Daily Balancing. However, following the full-scale Russian invasion of Ukraine in 2022, the liquidity in the gas market significantly dropped. And all positive indicators on the gas market took a negative turn. Therefore, this project aims to develop a deep analysis of the balancing system in Ukraine to help understand the current situation, limitations, and how to ensure a better physical and economic balancing on the gas transmission system.” Justin Goonesinghe explained.
The GMBA Project is essential for the short-term sustainability of the GTSOU and necessary for the long-term development of the gas market in Ukraine. Any liberalized and successful gas market tends to have a well-functioning balancing regime. Therefore, within the GMBA Project, USAID ESP, its Ukrainian and international experts will take the first steps to understand the issues of developing liquidity, transparency, daily forecasting, and developing short-term products on the gas market.
Speaking about the complexity and importance of balancing in the gas market, Dmytro Lyppa, CEO of GTSOU, expressed gratitude for the USAID assistance provided through the Energy Security Project in making the GTSOU more transparent and compliant with the requirements of the international law and procedures. “The GMBA Project is important for us and very specific for the gas market in Ukraine during the war. We need to understand if we function as closely to the EU regulations as possible and how we should transform our operation activity after the war. These highlighted points are crucial for both the GTSOU and its stakeholders. We appreciate your guidance and support and expect to analyze the existing practices in the Ukrainian gas and international markets. We hope the results of this project will be clear for gas market players.” Dmytro Lyppa mentioned.
All activities and products within the GMBA Project will be performed and delivered by the end of this year.