Ukrainian authorities rise electricity tariffs in 2021

Author : Olena Holubeva

Source : 112 Ukraine

Ukrainian Cabinet of Ministers adopted a resolution establishing a single price for all household consumers at UAH 1.68 (0,059 USD)
22:43, 30 December 2020

Open source

Ukrainian Cabinet of Ministers adopted a resolution establishing a single price for all household consumers at UAH 1.68 (0,059 USD; 1 USD is 28,34 UAH). The government's verdict on electricity prices for the population was expected all day. The intrigue was that yesterday's meeting was the last in the outgoing year, and the decree, which set prices for the population at a fixed level, lower than for industry (PSO), expired at the end of the year.

Thus, as early as January 1, payments for electricity for the population could be calculated based on market prices for electricity of about USD 0,18 kW / hour. If a standard Kyiv apartment in a high-rise building with an electric stove, a boiler, and a computer operating almost 24/7 pays a little more than 10,5 USD for the consumed slightly more than 200 kW, from January 1, at least 24 USD would be charged on it, based on the price for industry 0,18 USD UAH kW / hour. It is known that in some periods it takes off and up to USD 0,14 kW / hour.

Related: Ukrainian nuclear power plants produced 52% of all electricity for 11 months of 2020

Having approved the decree "On Amendments to the Resolution of the Cabinet of Ministers of June 5, 2019, No. 483", the government canceled the benefit. This category accounts for 42% of consumers. Of course, this is the most unprotected part of the population – the households of pensioners, the poor, people with disabilities, lonely people who have few household appliances that consume electricity.

The need to raise electricity prices for the population has long been on the agenda. The last time economically justified tariffs for the population, covering the cost, were established in April 1999. For a long time, they remained unchanged and only in 2006 changed twice by 25% from May 1 and September 1. A preferential payment for consumption up to 100 kW was established in 2011.

By that time, the tariff covered only 24.4% of the economically justified level. The next increase, already taking into account the categories separated from the consumption volumes, occurred in 2015, and since 2017, electricity prices have not changed. The right to establish them after the launch of the electricity market in 2019 was transferred from NEURC to the Cabinet of Ministers.

For this reason, Shmygal had to decide something yesterday. In November at that time, acting Energy Minister Yuriy Boyko said that the electricity tariff for the population will increase during 2021.

Related: Ukraine cancels preferential electricity tariff for population from 2021

The authorities are forced to raise Ukrenergo's tariff to cover their obligations to green generation, which sells its electricity to the unified energy system at one of the highest tariffs in Europe. The authorities are so unable to cope with its payment that they still cannot pay off huge debts, and Ukrenergo, which is involved in the chain of these settlements, suffers losses. Throughout 2020, the authorities stood at a crossroads - not to pay green fees at all or increase electricity prices for the population and industry. The hole due to the imbalance in the electricity market is estimated at 0,5 – 1,87 USD billion per year.

To cover this amount, the government must find sources, and as one of the options - from the population, the tariff for which will be increased, said Petro Kotin, acting president of the Energoatom National Nuclear Energy Company. By the way, one of the most potentially unsafe, in the absence of proper investments in production facilities, nuclear generation operates at a loss and borrows funds to pay salaries to employees from banks.


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