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Ukrenergo announces an additional five-year special auction for new balancing capacity

Ukrenergo announces an additional five-year special auction for new balancing capacity

21.10.2024 10:54

The NPC Ukrenergo has announced an additional special auction for the purchase of ancillary services for balancing the power system on December 24, the company reported on Facebook.

According to the announcement on the NPC's website, the company is planning to procure the hourly load-following automated frequency restoration reserves (FRR) services from 484 to 555 MW, as well as load-following services (symmetrical product) from 211 to 252 MW.

The marginal price of services in the first case is UAH 973.39/MWh and in the second – UAH 1,339.82/MWh. The start of services provision is January 1, 2026. The contract will be valid until December 31, 2030.

As reported, according to the results of the previous auction for the procurement of the ancillary automated FRR services held on August 22, 22 out of 35 winning companies guaranteed the fulfilment of their obligations; thus Ukrenergo purchased 397 MW of the automated FRR services, while the need was for 1 GW.

On October 10, the acting CEO Oleksiy Brekht told Energoreforma in a blitz interview that the NPC Ukrenergo may hold additional long-term auctions for ancillary services at the end of this year or early next year after consulting with businesses.

In August 2024, Ukrenergo held two long-term auctions for ancillary services for the first time: 99 MW and 1,000 MW. According to the results of the first auction for the provision of the automated frequency restoration reserves (FRR) services, the need for new capacities was almost completely covered, while the second auction for automatic frequency restoration reserves covered the need by 41% in terms of loading and 62% in terms of unloading/loading.

The essence of the auctions was that the winners receive a five-year contract under which the NPC undertakes to pay for the services of balancing the power system at the price established on the auction. According to the terms of the auctions, the winners must build generating capacities (gas and biomass power plants) and energy storage systems to provide these services by October 2025.