The growing debt of NEC Ukrenergo to participants in the balancing market deprives energy companies of funds for normal operations and deters potential investors. According to experts, financial imbalances and chronic non-payments are creating a critical situation in the Ukrainian energy system, requiring urgent intervention from state regulators.
Financial Crisis in the Balancing Market
ICC Ukraine Vice President for Energy Oleksandr Trokhymets stated that due to the accumulation of debt, market participants do not receive the funds necessary for their daily activities. In fact, companies have already provided services or generated electricity, but cannot receive timely payment. Any financial imbalance leads to power companies losing working capital, making their normal functioning impossible.
The expert emphasized that the responsibility for the current situation lies primarily with the state regulator. The constant build-up of debts indicates the imperfection of the current market rules, which need to be revised immediately to stabilize the financial state of the industry.
Threat to Investments and Generation Recovery
Chronic non-payments and excessive state intervention significantly hinder investments in the restoration and development of new generation capacities. Private business is not ready to invest in the capacities needed by the power system at critical moments, realizing that payments for services provided may take months or even a year to arrive.
Earlier, Ukraine Facility Platform Energy and Climate Sector Coordinator Oleksandr Vizir also noted that accumulated debts to market participants directly hinder the construction of new generation facilities. Such conditions make the Ukrainian energy market unattractive to strategic investors.
Ways to Overcome Crisis Phenomena
To fix the situation, it is necessary to urgently improve state regulation and move to more efficient market pricing and settlement mechanisms. Without systemic changes, attracting new private investment into domestic energy will be virtually impossible.
The expert community agrees that solving the problem of debts in the balancing market is a key condition for the survival of energy companies and the successful passage of heating seasons. Further delay in reforms threatens the complete paralysis of the operational activities of key market players.
