Ukrainian Parliament Passes Law to Integrate Energy Market with Europe

The Verkhovna Rada of Ukraine has enacted a crucial piece of legislation designed to integrate the Ukrainian energy market with its European counterpart. This new law will empower households and small businesses to unite into 'virtual power plants,' enabling them to participate fully in the electricity market. Andriy Gerus, the head of the parliamentary energy committee, shared these insights in an interview with NV Business.

Gerus emphasized that while the right to create personal generation and profit from it already existed, the newly passed law establishes a modern digital foundation for this process. 'We are not reinventing the wheel; we are implementing proven European tools such as aggregation. This allows households or small businesses to come together as 'virtual power plants,' entering the market not as individual consumers but as one powerful player,' he underscored.

According to Gerus, the law makes the rules transparent and compatible with European Union standards. 'This is not an instant revolution but a logical continuation of the energy decentralization reform, where each community becomes not just a consumer but an active participant in the country's energy balance,' he added.

Discussing the concept of community energy cooperation, Gerus explained that this essentially forms an energy cooperative. 'This is a format where neighbors or the entire community jointly invest in solar panels or wind turbines to collectively benefit and reduce their costs. This is an excellent European practice, but it should not be considered the main revelation of the law,' he noted.

Gerus also highlighted that the possibility of uniting already existed, but the key issue lies not in legal norms but in the economic aspect. 'As long as tariffs for the population remain lower than market rates, the incentive to invest in personal generation remains unclear for many. However, this law creates the necessary groundwork for the future: when the market transforms, communities will already have ready and understandable rules for their energy independence,' he stated.

Furthermore, Gerus pointed out that owners of solar panels and batteries will be able to earn from the balancing market and the flexibility market. 'The law opens this pathway, but it is important to understand the mechanics of the process. An individual solar panel owner on a rooftop is too small for a large dispatcher, so interaction will occur through aggregators—companies that gather thousands of such small resources into a single managed system,' he explained.

He also mentioned that in this model, home stations and storage systems together create flexibility for which the energy system is willing to pay. 'This is one of the most promising directions, but we must be realistic: this segment in Ukraine is just beginning to take shape. In the initial phase, aggregators will work with medium-sized businesses, where volumes are more predictable, while mass involvement of private households is a matter of technological evolution in the coming years,' he added.

Earlier reports indicated that the Verkhovna Rada of Ukraine had adopted in the second reading and as a whole the draft law No. 12087-d concerning the integration of the electricity markets of Ukraine and Europe. 'This law is about fully synchronizing the energy systems of Ukraine and Europe. When there is a surplus, we can export without hindrance, and conversely, when there is a deficit—import,' Gerus noted.

Gerus also emphasized that negative electricity prices exist in Europe, which has not been the case in Ukraine. 'Therefore, we want this law to allow cheap electricity from Europe to enter Ukraine,' he added. Andriy Zupanin, the deputy head of the committee, also noted that the law will not affect electricity prices for the population in any way, and its goal is to gradually implement uniform rules across the markets.

'This law will provide us with EUR 500 million under the Ukraine Facility,' Zupanin stressed. He also mentioned that after the law's adoption, at least 12 to 18 months will be needed to integrate the markets, with possible integration dates being January 1, 2028, or January 1, 2029, as a series of subordinate regulations are still required. Zupanin also emphasized that the law abolishes price caps in the electricity market.