On 4 April 2023, the National Energy and Utilities Regulatory Commission (NEURC, the Regulator) approved the draft Procedure for Allocation of Cross-border Capacity under the Joint Coordinated Procedure (the Procedure). The Procedure was developed by NPC Ukrenergo and agreed with the Romanian regulator to comply with the requirements of European legislation.

In view of the fact that in March last year Ukraine completed the connection of the UES of Ukraine to the ENTSO-E continental European power grids, the issue of introducing joint auctions for the allocation of cross-border transmission capacity is even more important. According to the provisions of Article 38 of the Law of Ukraine "On the Electricity Market", NPC Ukrenergo, as a transmission system operator (TSO), must agree the Procedure with all TSOs of neighbouring states – members of the Energy Community. This procedure is very time-consuming, and to solve this problem, the NEURC and NPC Ukrenergo have developed amendments to the Law of Ukraine "On the Electricity Market" that will allow TSOs to submit for approval the Rules for the allocation of cross-border capacity in one or more directions. The regulator has posted this draft law on its website to receive proposals and finalise it. Draft Law No. 5322, which incorporates the same amendments to the Electricity Market Law, is nearing adoption in the second reading. This draft law also encompasses the implementation of the REMIT Regulation.

Currently, the NEURC notes that at the beginning of the integration of the electricity market at the regional and European levels, two procedures for allocating the capacity of cross-border crossings will be in effect together:

  • one-sided procedure
  • joint coordinated procedure

The Procedure establishes:

  1. provisions for the explicit allocation of available cross-border capacity under a common coordinated procedure
  2. requirements for participation in auctions
  3. rights and obligations of the participants in the capacity allocation process
  4. conducting auctions under the reserve procedure
  5. the procedure for invoicing and payment
  6. conditions for nomination of the physical transmission right, return of the physical right to transmission and compensation to the owners of the physical right to transmission

Additionally, NPC Ukrenergo and the Romanian TSO Transelectrica agreed on special regional conditions for the allocation of cross-border transmission capacity between Ukraine and Romania at long-term and daily auctions.

The Procedure is currently being finalised and is subject to final approval by the Regulator.