Ukraine's electricity market is facing a systemic problem that, according to industry experts, could derail the country's key strategic course—integration into the European energy system. As stated by Olha Yevstihneieva, head of the Ukrainian Renewable Energy Association, the accumulation of debts in the market not only worsens the financial standing of participants but also makes "normal" operations within the single European market impossible. According to her, without solving the non-payment problem, Ukraine risks repeating the scenario established after the 2019 reform, when the transition to a new market model did not stop the growth of debt, but merely shifted it into new institutional frameworks.
The Lesson of 2019: Reform Without Payment Discipline
The expert emphasizes that integration into the EU market is impossible under conditions of chronic debt accumulation. "Yes, without resolving the debt problem, we will not be able to normally integrate into the EU market. This is another difficult task," Yevstihneieva noted. She pointed out that in public discussions, the problem is often explained solely by social circumstances—categories of consumers who "cannot be forced to pay" and "cannot be disconnected." However, in her opinion, order will still need to be restored within the country to prevent debts from continuing to accumulate, since payment discipline is the basic condition for the functioning of any competitive market, including the European one.
Social Reasons or Political Interests
Importantly, the accumulation of debt, according to Yevstihneieva, is driven not only by social burdens but also by political interests. The practice of regularly writing off debts for consumers who do not pay for electricity creates a steady signal: obligations do not need to be fulfilled. "Political interests are also behind these debts. At a certain point, a choice must be made: whose interests are we serving and how does this affect the state and the energy market. If a person or enterprise does not pay and then the debt is written off, it creates no motivation to pay further," the expert explained. Thus, the write-off mechanism, intended as a social shock absorber, actually destroys the economic logic of the market and shifts the burden of non-payments onto all other participants.
Who Really Pays for Other People's Debts
The practical result of such a policy is simple: debts in the energy market are ultimately paid by Ukrainians themselves—through the prices of goods and services that incorporate the cost of electricity. This means that even consumers who pay their bills bear an additional burden due to systemic arrears. Combined with the shortage of funds among generation and grid companies, this creates a vicious circle: the higher the debt, the greater the tariff pressure on solvent consumers and the fewer incentives for insolvent ones.
Impact on Capacity Restoration and New Projects
The consequences of the debt burden extend far beyond accounting. As Andrian Prokop, head of energy programs at the Ukrainian Institute of the Future, previously noted, debts in the balancing market leave energy companies without the funds needed to restore damaged capacities and constrain the development of new generation facilities. Under conditions where a significant portion of revenue fails to reach the cash desk, companies cannot simultaneously cover current obligations, repair infrastructure, and invest in modernization—and precisely these three tasks are critical for the long-term resilience of the system.
The Scale of the Problem in Numbers
The size of the accumulated debt takes concrete shape thanks to data provided by ExPro: at the end of September 2026, Ukrenergo's arrears to balancing market participants reached UAH 36.7 billion. This figure records not a one-time failure, but a steady trend that industry players consider the main obstacle to full integration into the European energy system. Without changing the approach to payment discipline and revising the practice of write-offs, experts estimate that even the technical readiness of grids and generation will not ensure Ukraine's actual entry into the single EU market.
