NEC “Ukrenergo” will hold the first specialized five-year auctions for auxiliary services on September 15 and 22, where it intends to buy 99 MW and 1,000 MW of power system balancing capacity, respectively, the company’s board chairman, Volodymyr Kudrytskyi, said.
“The first auction will be held on August 15. Our need for 99 MW is the so-called primary regulation (RPC, frequency maintenance reserve, command execution within 15 seconds – ER), and it will mostly involve energy storage systems (ESS) – very fast and very maneuverable installations,” said Kudrytskyi at the NEK event “Decentralized generation: new opportunities for business and communities” in Kyiv on Monday.
“The second auction will take place on August 22, it is more massive, where we will buy 1,000 MW (aRVh, automatic frequency restoration reserve, execution of the command within 15 minutes – ER). Of them, 579 MW is a load service, i.e. balancing the system by increasing electricity generation, and 421 MW is a so-called symmetrical auction, these are stations that will be able to unload and load at the dispatcher’s command,” explained the head of the system operator.
According to him, in particular, gas piston, gas turbine installations and biomass power plants can participate in the auction.
“We are offering a five-year fixed-euro contract with the winners of the auctions, starting at the end of September 2025. That is, within a year, the winners must build capacity capable of balancing the energy system. The amount we pay is many times different from the amounts in EU countries, because we have a huge shortage of such stations,” Kudrytskyi described the situation.
According to the terms of the auction, auxiliary services are purchased for 1,826 days – from October 1, 2025 to September 30, 2030.
According to the presentation presented by the head of the NEC, the marginal cost of the service at the auction with RPCH is up to 33 euros/MW, at the auction with aRVC – from 24 euros/MW to 33 euros/MW. In the first case, the service will be purchased in blocks of 4 hours, in the second – hourly.
Ukrenergo has calculated that the payback of the projects will be 3-4 years.
According to Kudrytskyi, in the conditions of the destruction of the mobile power generation in the Russian Federation and the future attacks of the enemy in Ukraine, the decentralization of the power generation, primarily its balancing segment, should take place, which would ensure its maneuverability and the ability to produce as much electricity as the consumer needs at each moment of time.
“Decentralized generation is perhaps the only long-term answer to Russian attacks, because no one will have enough missiles to destroy hundreds and thousands of small power plants,” he emphasized.
As reported, on June 26, the NCRECP adopted a resolution on the introduction of special auctions for auxiliary services to provide frequency regulation reserves and active power in the power system for a period of one to five years (currently one year), with the possibility of a postponement of up to three years. In addition, the fee for the service is tied to the euro exchange rate.
The head of “Ukrenergo” emphasized that the adoption of this decision could be a turning point in the development of not only SNE, but also of balancing generation in the country in general. According to him, this will make it possible to both attract bank loans and ensure a decent return on projects.
He emphasized that the interest in such auctions has long been quite large and will only increase over time, and many Ukrainian companies that were not in the energy business before are ready to build generating capacities both for their own production and for working on the market as a separate business.
