The current price cap of 15,000 UAH/MWh no longer reflects the economic reality of distributed gas generation, as fuel prices continue to surge even before the onset of winter. This was stated by Andriy Muzychenko, Head of Sales at ACG Ukraine, commenting on the current situation in the country's energy market.
Economics of Distributed Generation
According to Muzychenko, for gas-piston and other distributed installations, the cost of gas directly dictates the prime cost of generated electricity. The increase in fuel prices during October creates significant financial pressure on generation facilities designed to balance the power system during deficit hours.
Rising Production Costs
The ACG Ukraine representative noted that for distributed generation, the rising cost of gas has already driven up the production cost of electricity by an average of 800–860 hryvnias per megawatt excluding VAT. Under these conditions, the maximum price limit of 15,000 UAH/MWh fails to cover operational expenditures.
Market Demands for Price Cap Revision
Given market realities, industry experts and market participants during public discussions have proposed raising price caps by at least 25–30% across all market segments. Previously, the Federation of Employers of the Fuel and Energy Complex of Ukraine also urged the regulator to adjust price limits ahead of the heating season.
