Ukraine connection with ENTSO-E by 2020, direct contracts and third energy package

1. February 2016. / SEE Energy News

NEC “Ukrenergo” considers its possible connection with the European ENTSO-E grid already in 2018. This was announced last week the head of the strategic development and planning of energy systems “Ukrenergo” Alex Brecht during the presentation of the project of development of the national energy system for the period until 2025.

Experts consider this forecast as highly optimistic, more likely that the Ukrainian and European energy system could be synchronized only after 2020.

“We believe that in 2018-19, we can have actual move to parallel operation with ENTSO-E”, – said Brecht in his speech. According to him, the work on a future connection to the European grid of Ukraine are conducted within the framework of the so-called research project,  possible synchronous interconnection of Ukraine and Moldova to ENTSO, and consist of three phases.

In September 2016 first phase of the project is expected to end. According to the chief of the European integration of NEC “Ukrenergo” Vyacheslav Salimon mainly to preliminary results of the first phase of the project was the conclusion that the synchronous operation of Ukrainian and Moldovan energy systems from a European is technically feasible.

According to estimates “Ukrenergo”, the maximum amount of power flows between the power in the event of their association, can be: from Ukraine and Moldova to ENTSO-E – 2350 MW – in the summer, and 1,800 MW – in the winter; of ENTSO-E in the opposite direction – 2000 MW.

By 2025 expected peak load consumption in the country during the winter period is expected at 34 000 MW, therefore the anticipated flows to Europe seems, at first glance, not so great. Ukraine is connected with Poland, Slovakia, Hungary and Romania with three transmission lines with voltage 750 kV, 400 kV transmission line in three and one 220 kV transmission line.

In Soviet times, Ukraine was seen by Moscow as the main base for export of electricity, “expansion” in Europe.

However, with the development of trans-European energy infrastructure and energy integration of Ukraine into the EU, the possibilities of export and import flows between the two countries will expand. In particular, on January 21, Energy Community Secretariat announced the start of the competitive selection of infrastructure projects in accordance with the Regulation of the EU guidelines for trans-European energy infrastructure TEN-E Regulation.

The optimistic scenario

According to Vyacheslav Salimon, during the first phase of sync with the ENTSO-E they investigated individual power units of thermal power plants and hydropower plants with respect to their use in primary and secondary regulation of frequency and power. In addition, it analyzed the regulatory framework for its compliance with the requirements of ENTSO-E and the European Union, as well as the draft of the final report on the possibility of synchronization of energy systems.

Work was carried out in collaboration with a consortium of European operators of national power, led by Romanian “Transelectrica”. The result of the first phase will be to develop a directory of technical and organizational measures that would go to the synchronous operation.

“The second phase of the project will consist in the implementation of the catalog of measures, and it all depends now only on the Ukrainian side. This phase can last up to a year” – said Alexey Brecht.

At this stage, in particular, there is a need to make adjustments to the system of automatic regulation of frequency and power of the United Energy System of Ukraine (OES), which currently regulates only flows between the CIS systems.

Also, in accordance with European technical principles OperationHandbook, UA must make changes to the operating rules of the market and ensure the maintenance of the frequency, as well as to ensure proper operation in terms of relay protection and automatic load shedding.

Then UA can move on to the third phase, during which synchronization of energy systems will be tested in a test mode. According to Alexei Brecht, the third phase may also take about a year.

From exports to imports

However, in addition to the necessary technical measures at the level of “Ukrenergo” and generating companies, synchronous operation with Europe require a comprehensive adaptation of the domestic industry of the legal framework to the requirements of the Third Energy Package of the EU. In particular, we are talking about the creation of the country’s competitive market of direct contracts between producers and suppliers of electricity.

This complex work is much more complex than the technical adjustment, especially when you consider that the practical work on the transition to a market model of the functioning of the domestic energy system has not even started, and the relevant law is not adopted by the Verkhovna Rada.

In accordance with the old law “On the Principles of operation electricity market of Ukraine”, which was signed by Viktor Yanukovych in December 2013, a full-scale competitive energy market in Ukraine was supposed to be implemented by 2017.

According to experts, concept of integration and synchronization “can be integrated in stages, parts of the power system, for example, through the implementation of the project to create the same energy bridge to Europe from the Khmelnitsky nuclear power plant. In theory, the connection to ENTSO-E with possible” islands “, but it is better to translate parallel operation all the ECO, which is a time-consuming process, “- says Nitsovich.

As previously stated by the representatives of the Consortium of European operators, the most realistic period of association with the ECO ENTSO-E is the period after 2020.

Synchronization of the Ukrainian energy system with the European at the same time it would mean isolation from the Russian power system. By this time the Ukrainian energy sector will have to learn to live in a “united European family.” And I think now there is something, from a comparison of electricity prices “we” and “them.” For example, currently on the Hungarian power exchange HUPX electricity price quotations in March up to the base of 3.56 cents per 1 kWh, in the second quarter of 2016 – 3.37 euro cents. For comparison, the wholesale rate per kilowatt-hour in the Ukrainian energy market in January – 117.8 cents per 1 kilowatt-hour, that is more expensive than in the Eastern European EU countries. And it is in terms of growth prospects for the price of Ukrainian kilowatt-hour for the entire process chain of production and supply of electricity – for thermal power plants, nuclear power, renewable energy and power companies, inclusive.

In addition, Ukraine has “Energoatom”, which is selling electricity to the market price of 42 kopecks per kilowatt-hour. However, the future possibilities of the NAEC to enter the free market has not yet been determined. And few years ago domestic energy companies looked to the West only as a promising export market for electricity, now in the interests of consumers already have a sense of wonder about its ability to import.

UAENERGY

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