A new study by the Ukrainian Institute of the Future says power use has dropped by a third while transmission and distribution tariffs keep climbing, pushing the market toward a self‑reinforcing tariff spiral.
Ukraine’s electricity consumption has contracted by 30–35 percent, yet tariffs for transmission and distribution continue to increase, according to research released by the Ukrainian Institute of the Future. The report, titled "Prospects of the Electricity Market under War Challenges: How to Overcome Destructive Trends," warns that the market risks entering a destructive inertial scenario.
The war has stripped the power system of a portion of its cheap base‑load generation. Lost capacity is being replaced by more expensive maneuverable generation and imports, which drives wholesale prices higher.
This dynamic fuels a "tariff spiral": businesses respond to higher costs by improving energy efficiency, installing on‑site generation, or cutting output, causing grid consumption to fall further. The regulator then raises tariffs again to cover fixed network costs. At the same time, an undifferentiated public service obligation for households drains liquidity from state‑owned generators, and mounting debts on the balancing market block investment in storage and high‑maneuverability plants.
The study argues that the current market model has exhausted its resilience and outlines five concrete steps to break the spiral. The analysis was authored by Andriy Prokip and published on the Ukrainian Institute of the Future website.
https://t.me/AnatoliyAmelin/16888
No related articles or dates yet.