On 18 October 2023, the National Energy and Utilities Regulatory Commission (“NEURC”) adopted the Licensing Terms for Aggregation in the Electricity Market under Resolution No. 1909 (“Resolution”).
Background
The aggregation was first introduced earlier this year by Law of Ukraine “On Amendments to Certain Laws of Ukraine on Restoration and Green Transformation of the Energy System of Ukraine” No. 3220-IX, dated 30 June 2023 (“Law”). While the Law set the general legal framework for the aggregation, it was left to the NEURC to refine more precise rules for such activities.
The Law defined aggregation as an activity of managing interconnected electrical installations with the aim to produce (not more than 20 MW), use, store, buy, and sell electricity or provide ancillary and/or balancing services in the electricity market.
Simply put, aggregation is the process of combining the energy consumption or production by multiple individuals or entities into a single, larger group. This consolidation allows for more efficient management of energy resources, often resulting in cost savings, better access to renewable energy sources, and improved sustainability.
Resolution’s key points
To obtain a license, a company has to submit to the NEURC an application supported by the documents identifying the applicant and detailing the way such applicant intends to carry out aggregation.
Once the license is obtained, the company has to comply, inter alia, with the following licensing terms:
- draw up daily electricity schedules in accordance with the volumes of purchased and sold electricity and provide them to the transmission system operator
- pay quarterly contribution fees in the amount determined by the NEURC
- provide balancing and ancillary services if required by the Law and market rules
- maintain a website with the company’s contact details and terms for joining the aggregation group
- inform the members of the aggregated group at least once per billing period about the results of the aggregated group’s activities (volumes and cost of purchased and/or sold electricity and/or services in the electricity market, etc.)
- abstain from transferring the license or any rights and obligations of the aggregator under the said license to third parties
- keep separate records of expenses and income from business activities related to aggregation in the electricity market and other types of business activities the aggregator conducts
- notify the NEURC of all changes in the data specified in the license application and in the documents attached to the application no later than one month from the date of such changes
The Resolution will come into force on 19 December 2023.
By Glib Bondar, Senior Partner, and Maksym Maksymenko, Partner, Avellum