On the verge of major changes: the expansion of the state's authority in managing Ukraine's energy system

The Ukrainian electricity market is on the verge of significant transformation. A new draft law amending the Law of Ukraine "On the Electricity Market" — specifically regarding supply security — introduces significant expansion of the state's authority in operational and technical management of the power system. 

Expansion of powers of state bodies

The Cabinet of Ministers of Ukraine will gain the authority to approve the procedures for determining and applying electricity consumption limits — effectively giving it the ability to manage national demand. 

The Ministry of Energy of Ukraine will assume not only regulatory functions but also: 

• Approve power plant maintenance and repair schedules, as well as fuel accumulation programs (e.g., coal reserves for thermal plants); the draft law does not limit this power to state-owned power plants only; 
• Coordinate emergency and anti-crisis actions in the power sector; 
• Establish and oversee regulations on supply security monitoring, disconnection procedures, and statistical reporting; 
• Review DSOs’ (Distribution System Operators’) development plans prior to final approval by the national regulator (NEURC). 

The State Energy Supervision Inspectorate of Ukraine will have its authority significantly expanded in the electricity sector and will: 

• Submit proposals to the Ministry of Energy on prioritizing technical solutions for developing distribution systems, based on DSOs’ draft development plans; 
• Report the results of inspections related to the reconstruction and modernization of power equipment at power plants; 
• Conduct electricity supply security monitoring upon instruction from the Ministry of Energy; 
• Exercise oversight of the technical reliability of power plants (irrespective to the owner and technology type), transmission and distribution systems; 
• Impose financial sanctions for violations of technical operation rules, poor condition of electrical installations, non-compliance with supply interruption protocols (including emergency disconnections and consumption reduction), obstruction of inspections and failure to provide required information or for submitting false data, as defined by regulatory acts. 

Scope of application of powers

The expanded powers and oversight apply to all market participants: 

• Electricity producers, including RES (renewable energy sources): required to comply with approved maintenance schedules, allow inspections and meet technical standards; 
• TSOs and DSOs: obliged to coordinate development plans with the Ministry, comply with state-approved maintenance schedules and provide monitoring data; 
• Consumers, especially those classified as critical or strategic, which are controlled by the implementation of schedules for limiting power supply, backup power supply. 

In essence, RES producers fall fully under the scope of the new regulatory regime, as no exceptions are made based on generation technology. 

New obligations for electricity producers

The draft law outlines new ongoing obligations for all producers, including: 

• Compliance with maintenance and reconstruction schedules for generating units; 
• Providing access to facilities for state inspections; 
• Participating in technical assessments and modernization inspections; 
• (For TPPs/CHPs) Adhering to coal accumulation plans. 

Potential risks and challenges for producers

The new draft law poses some risks for electricity producers: 

• Expansion of the powers of the Ministry of Energy and State Energy Supervision, particularly regarding the approval of repair schedules, control over their implementation, and the technical condition of equipment, may lead to increased administrative pressure; 
• The need for strict adherence torepair schedules approved by the Ministry of Energy may limit producer's flexibility in planning maintenance, especially if these schedules do not take into account operational peculiarities (e.g., seasonality for RES); 
• A significant increase in the amount of potential fines, along with the introduction of new types of offences and corresponding penalties, raises the financial burden in the event of violations.  

While the legislative initiative aims to strengthen energy supply security and state oversight, for market participants — especially RES producers — this means increased obligations, regulatory exposure, and operational risks. All electricity generators should prepare by assessing their compliance readiness, reviewing internal procedures, and adapting to the new supervisory landscape.

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The update was prepared by:

• Dr Oleksiy Feliv, Managing Partner
• Serhii Datsiv, Senior Associate
• Katerina Lyaskovets, Junior Associate