--- title: "ICC Ukraine Expert: Price Caps on Electricity Create an Artificial Shortage and Hurt Consumers" description: "ICC Ukraine Vice President Oleksandr Trokhymets stated that price caps on electricity set by NRECU create an artificial shortage of supply during peak hours and ultimately harm consumers by blocking market pricing." date: 2026-09-12T08:26:00.000Z lang: en url: https://xab.info/en/posts/price-caps-on-electricity-artificial-shortage-consumers-trokhymets-en tags: [electricity-market, price-caps, ukraine-energy, ncrku, icc-ukraine, energy-reform] publisher: "XAB.info" --- # ICC Ukraine Expert: Price Caps on Electricity Create an Artificial Shortage and Hurt Consumers ![Power transmission line at sunset: electricity price caps create artificial shortage and hit consumers](https://xab.info/media/2026/09/12/prays-kepy-na-elektroenergiju-deficit-potrebiteli-trokhimets/prays-kepy-na-elektroenergiju-deficit-potrebiteli-trokhimets-1.webp) ## 🎯 Key Points - Price caps set by NRECU make it unprofitable to sell electricity during peak hours, leading to a shortage of supply - An ICC Ukraine expert argues that the price of electricity should be formed by the market balance of supply and demand, not by an administrative ceiling - Former Ukrenergo head Kudytskyi previously pointed out that price limits hinder the full use of electricity imports from Europe - At the same time, Trokhymets noted that industry continues to operate even after the price caps were changed, creating an inconsistency in assessments of the scale of the problem A debate is gaining momentum on the Ukrainian energy market over how justified state intervention in electricity pricing is. At a briefing, ICC Ukraine Vice President for Energy Affairs, Oleksandr Trokhymets, stated that the existence of price limits β€” so-called price caps β€” set by the National Commission that performs regulatory functions in the energy and public services sector (NRECU) may provoke a shortage of supply during certain hours and ultimately harm end consumers. In his words, if the cap set by the regulator is too low, it becomes economically unprofitable for producers to sell electricity during peak hours, which leads to a narrowing of supply on the market. ### How Price Caps Distort the Market Mechanism Trokhymets explained that price caps are upper price boundaries that the market cannot exceed. "The National Regulatory Commission sets so-called price caps β€” these are boundaries that cannot be crossed. And during certain hours, the presence of these price caps results in a lack of supply," the expert emphasized. Under such conditions, it is simply unprofitable for producers to enter the market: the margin does not cover generation and transmission costs, and as a result, volumes shrink during peak periods. A shortage arises, which ultimately falls on the shoulders of consumers β€” both industrial and household. ### Price Should Be Formed by the Balance of Supply and Demand In Trokhymets's view, electricity is a commodity, and its price should be determined by the market mechanism, i.e., the balance of supply and demand. The problem arises when the upper limit set by the regulator does not allow the market to respond adequately to rising demand or falling supply. As a result, the price signal that in a normal market economy would encourage producers to increase generation during shortage hours is blocked. The market ceases to perform its coordinating function, and in its place comes administrative regulation, which, according to ICC Ukraine, contradicts the logic of the energy sector reform. ### Imports from Europe and Artificial Barriers Previously, the former head of Ukrenergo, Volodymyr Kudytskyi, also pointed out that price limits on the Ukrainian energy market are absolutely artificial and prevent the full use of electricity imports from Europe. In conditions where price caps do not allow the price to reflect the real cost of cross-border generation, Ukrainian consumers are deprived of access to cheaper or, conversely, to the necessary volumes of imported energy. This is especially relevant in the context of restoring the energy system after years of infrastructure damage and the need to diversify supply sources. ### Contradictory Data At the same time, other assessments are also heard in the public sphere. In particular, in one of his statements, Trokhymets noted that industry continues to operate even after the price caps were changed, despite loud statements about possible plant closures. This creates a certain inconsistency: on the one hand, experts warn of the risks of a supply shortage and harm to consumers, while on the other β€” the actual dynamics of industrial consumer load does not yet demonstrate catastrophic consequences from the price limits. Perhaps this is a time lag between the introduction of new price caps and their real impact on the behavior of generating companies, or perhaps the current levels of limits have not yet reached the critical point beyond which the market begins to "slip" in volumes. Nevertheless, the very fact of the existence of an administrative price ceiling, in the opinion of ICC Ukraine, is a systemic obstacle to the full functioning of the market. ### What's Next: Expectations from the Reform ICC Ukraine experts consistently advocate for the removal of artificial price limits and a transition to full market pricing, in which the price in each hour reflects the real ratio of supply and demand. In their view, this will not only eliminate the risks of local shortages but also create incentives for investment in generation and grid modernization. However, the question of when and to what extent NRECU is ready to review the current price cap model remains open as of the time of writing. For consumers, the key question remains: is it acceptable for an administrative decision by the regulator to ultimately make electricity less affordable precisely during the hours when it is needed most. ## πŸ” Fact-Check Verification - [The market, not price caps: expert explains how the price of electricity should be formed](https://www.rbc.ua/ukr/news/rinok-prays-kepi-ekspert-poyasniv-k-mae-formuvatisya-1789201390.html) - Основной источник Ρ†ΠΈΡ‚Π°Ρ‚Ρ‹ Π’Ρ€ΠΎΡ…ΠΈΠΌΡ†Π° ΠΎ прайс-ΠΊΠ΅ΠΏΠ°Ρ… ΠΈ Π΄Π΅Ρ„ΠΈΡ†ΠΈΡ‚Π΅ прСдлоТСния. Π‘ΠΎΠ²ΠΏΠ°Π΄Π°Π΅Ρ‚ с тСкстом Π±Ρ€ΠΈΡ„ΠΈΠ½Π³Π°. - [Price caps contradict the market reform and replace it with state regulation, - ICC Ukraine](https://www.unian.net/economics/energetics/prays-kapy-protivorechat-reforme-rynka-i-zamenyayut-ee-gosudarstvennym-regulirovaniem-icc-ukraine-13358499.html) - ΠŸΠΎΠ΄Ρ‚Π²Π΅Ρ€ΠΆΠ΄Π°Π΅Ρ‚ ΠΏΠΎΠ·ΠΈΡ†ΠΈΡŽ ICC Ukraine ΠΎ ΠΏΡ€ΠΎΡ‚ΠΈΠ²ΠΎΡ€Π΅Ρ‡ΠΈΠΈ прайс-ΠΊΠ΅ΠΏΠΎΠ² Ρ€Ρ‹Π½ΠΎΡ‡Π½ΠΎΠΉ Ρ€Π΅Ρ„ΠΎΡ€ΠΌΠ΅. - [There is no market as long as there are price caps: the state holds prices, not supply and demand, – Trokhymets](https://www.obozrevatel.com/ekonomika-glavnaya/ryinka-net-poka-est-prajs-kepyi-tsenyi-derzhit-gosudarstvo-a-ne-spros-i-predlozhenie-ekspert.htm) - Π”ΠΎΠΏΠΎΠ»Π½ΠΈΡ‚Π΅Π»ΡŒΠ½Ρ‹ΠΉ источник цитирования Π’Ρ€ΠΎΡ…ΠΈΠΌΡ†Π°, согласуСтся с основной вСрсиСй. - [Industry operates even after the price caps were changed, despite loud statements about ...](https://www.obozrevatel.com/ekonomika-glavnaya/promyishlennost-rabotaet-dazhe-posle-izmeneniya-prajs-kepov-nesmotrya-na-gromkie-zayavleniya-o-zakryitii-trohimets.htm) - Π”ΠΎΠΏΠΎΠ»Π½ΠΈΡ‚Π΅Π»ΡŒΠ½Ρ‹ΠΉ источник цитирования Π’Ρ€ΠΎΡ…ΠΈΠΌΡ†Π°, согласуСтся с основной вСрсиСй. ## ❓ FAQ ### Q: What are price caps on the electricity market? **A:** Price caps are upper limits on the price of electricity set by the regulator (NRECU). The market cannot form a price above the set ceiling, which, according to ICC Ukraine experts, blocks normal price signaling and leads to a shortage of supply during peak hours. ### Q: Why can price caps harm consumers? **A:** If the price limit is set too low, it becomes unprofitable for producers to sell electricity during certain hours. As a result, supply shrinks, a shortage arises, which ultimately affects consumers β€” they receive less energy precisely when it is needed most. ### Q: Who made the statement about the harm of price caps? **A:** The statement was made by ICC Ukraine Vice President for Energy Affairs, Oleksandr Trokhymets, at a briefing. Previously, a similar position was expressed by the former head of Ukrenergo, Volodymyr Kudytskyi, who called the price limits artificial. ### Q: Does industry continue to operate under the current price caps? **A:** According to Trokhymets himself, industry continues to operate even after the price caps were changed, despite loud statements about possible closures. However, experts warn that systemic shortage risks remain and may manifest with further tightening of the limits.