Ukraine’s electricity balancing market has accumulated multi-billion-dollar debts, and the crisis is already beyond the capacity of the national grid operator Ukrenergo to handle alone. According to Oleksandr Kharchenko of the Centre for Energy Research, the total obligations that counterparties owe the operator are roughly twice Ukrenergo’s own liabilities — and without government intervention, the problem will not be solved. For the renewable energy sector, this is far from an abstract issue: a dysfunctional balancing market directly undermines the investment climate and Ukraine’s path toward integration with the EU energy market.
Key points:
- Balancing market debt owed to Ukrenergo is roughly twice the operator’s own outstanding obligations.
- One of the main drivers of the debt is state-owned coal mines that have no means to pay for the electricity they consume.
- Cutting off their power supply is not an option: without continuous water pumping, the risk of an environmental disaster is real.
- Without a systemic solution, Ukraine cannot achieve full participation in the unified EU energy market.
Why Ukrenergo Cannot Fix This Alone
Kharchenko is clear: any attempt by the grid operator to absorb balancing market debts on its own is a dead end. Even if Ukrenergo were to settle all of its own obligations in full, the volume of debt that other market participants owe it would still remain nearly twice as large.
According to rbc.ua, the expert argues that what is needed is a comprehensive government decision — one that establishes mechanisms for covering costs at facilities that are structurally unable to pay for the electricity they consume.
State Mines: A Debt That Cannot Be Switched Off
Kharchenko identifies state-owned coal mines — including those already closed — as one of the primary sources of the growing debt. Even when mining operations have ceased, groundwater continues to accumulate underground and must be pumped out continuously. Without that pumping, water tables flood the shafts and seep to the surface, triggering subsidence and environmental contamination.
The problem is that such facilities do not procure electricity through the organised market; they draw power directly from the grid, and the resulting debt accumulates in the balancing segment, where prices are at their highest. Disconnecting a mine is not legally or technically feasible, there is no funding source to cover the costs, and so the liabilities keep growing. “Unfortunately, there is no solution at the moment,” Kharchenko concludes.
Why This Hits Renewable Energy Hard
For the renewables sector, the situation is critical. Auctions, long-term power purchase agreements, and capital raising all depend on predictable payment discipline across the market.
When balancing market debt piles up with no clear owner under the existing rules, investors in solar power plants, wind farms, and energy storage systems receive an unmistakable signal: payments for electricity fed into the grid may be delayed — or may never arrive at all.
What Comes Next
Until the government determines who pays for electricity consumed by facilities such as dewatering mines — and with what funds — balancing market debt will not disappear. What form that solution will take remains an open question. But continued inaction translates directly into foregone investment in renewables and pushes back the point at which Ukraine’s power sector can operate on equal terms within the shared EU market.
Sources: РБК-Україна
Prepared by the Alternative Energy editorial team with the help of AI based on the sources listed; facts and figures were checked against them during automated editorial review. How we prepare articles
