ENTSO-E approves Ukrenergo accession to ITC compensation mechanism in July
MOSCOW. April 4 (Interfax) - The European Network of Transmission System Operators for Electricity (ENTSO-E) has approved Ukrenergo's accession to the ITC (Inter-Transmission System Operator Compensation), a European mechanism to compensate the expenses of electricity exporters, as of July 1, 2024.
"I have received good news from our colleagues from ENTSO-E, who have approved Ukrenergo's accession to the ITC mechanism as of July 1. This mechanism operates in Europe and provides energy system operators with a transparent and clear principle for compensation of expenses for the use of international interconnectors in the transit of electricity," Ukrainian media reported company CEO Vladimir Kudritsky as saying.
As of July, infrastructure expenses and process losses in the Ukrainian backbone grid incurred in the course of electricity transmission from European countries will be compensated by ENTSO-E energy system operators, he said. Ukraine will also pay its share for transmission of Ukrainian electricity through the grids of neighboring countries.
"The amount of such compensation will depend on annual amounts of transit electricity that passed through the Ukrainian network. The larger it is, the more funds we will be able to receive for the further development of energy infrastructure," Kudritsky said.
Joining the ITC mechanism became possible after the Ukrainian system operator became a full-fledged member of the ENTSO-E, he said. Ukrainian exporters and importers secured equal terms for trading electricity with European Union countries as of January. Ukrenergo became a full-fledged ENTSO-E member as of 2024.
"Ukrenergo's accession to the European ITC mechanism has forever eliminated the reason for lengthy legal disputes on the Ukrainian electricity market over who should cover infrastructure expenses in interstate exchanges," Kudritsky said.
ENTSO-E decided on June 7, 2022 to gradually expand capabilities for electricity exports/imports and commercial exchanges of electricity began on June 30 that year. ENTSO-E is gradually increasing the technical capacity for electricity imports into Ukraine/Moldova and as of December 1, 2023 the permitted capacity increased to 1,700 MW. The technical capacity exports from Ukraine and Moldova to Europe was previously limited to 400 MW.
Kudritsky said earlier that the maximum limit on Ukrainian electricity exports from Ukraine and from Moldova to EU countries was raised to 550 MW per hour as of March 1, 2024, after ENTSO-E operators decided on February 26 to increase the export capacity of interstate interconnectors by 150 MW.