The Ukrainian energy sector has found itself in a crisis situation due to a record level of debt in the balancing electricity market, which reached UAH 34.5 billion in 2024.
This was stated by Adrian Prokip, an expert in the Energy program of the Ukrainian Institute for the Future think tank. According to him, this growth is 12.7% compared to the previous year.
Of this amount, NPC Ukrenergo's debt to balancing service providers is UAH 13.6 billion , which significantly complicates the financial situation in the industry.
The expert emphasizes that such debts are a serious barrier to the development of new generations and attracting investment into the industry.
“The situation where, after selling electricity, you have to wait a year or a half for payment scares away even those who already have their own generation,” Prokip notes.
Imperfect debt collection mechanisms, the lack of financial guarantees for market participants, and regular disruptions to the energy system due to the war with Russia only deepen the crisis.
The Verkhovna Rada of Ukraine has adopted a bill that is partially designed to solve the debt problem, but, according to Prokip, these are only temporary measures.
"Systemic changes are needed that would allow us to balance the market and gradually get rid of debts. Administrative methods will not help here," the expert emphasizes.
He adds that only a proactive policy can create the prerequisites for the development of a new generation, which is critically needed in the face of regular attacks on Ukraine's energy infrastructure.
In its report, the Florence School of Regulation (FSR) also noted that the situation is caused by shortcomings in debt collection mechanisms and the lack of effective financial guarantees. This not only worsens the liquidity of the market, but also undermines its investment attractiveness.
