Date of publication: 29 July 2025
Valeriia Gudiy, Attorney at Law, Partner
Oleksandr Kamsha, Attorney at Law, Head of Dnipro Office
Source: Ukrainian Law Firms 2025
From 1 April 2024, operations involving wholesale energy products in Ukraine may be carried out exclusively by entities registered as wholesale energy market participants in accordance with the Procedure for Registration of Wholesale Energy Market Participants, approved by the Resolution of the National Commission for State Regulation of Energy and Public Utilities (hereinafter – “NCREPU”, “Regulator”) No. 1812 of 4 October 2023.
Any non-resident entity that has entered into purchase and sale transactions, or submitted offers (bids) for the purchase and sale of the relevant wholesale energy product on the wholesale energy market with a place of delivery (fulfillment) in Ukraine or from Ukraine to the territory of other countries, including transactions made prior to 20 December 2024, was also obliged to be registered as a participant of the wholesale energy market (hereinafter – “WEM”) in accordance with the legislation of Ukraine and by-laws of the NCREPU.
The legislation of Ukraine has established and continues to uphold liability for “implementation in Ukraine of wholesale energy trading operations without registration of a wholesale market participant”, which is considered a violation in the electricity market in accordance with Article 77(2)(20) of the Law of Ukraine On the Electricity Market. In the event of an offense committed on the electricity market, the following sanctions may be applied to the relevant market participants: 1) a warning requiring the violation to be remedied; 2) a fine; 3) suspension of the license; 4) termination of the license. (Article 77(3) of the Law On the Electricity Market).
For the purposes of clarity, wholesale energy products include contracts (agreements) and derivatives regardless of the time, place and manner of their conclusion, specifically:
- contracts for the purchase and sale of electric energy or natural gas at the place of delivery (fulfillment) in Ukraine;
- derivative contracts, whose underlying asset is electric energy or natural gas, concluded in Ukraine or with the place of delivery (fulfillment) being in Ukraine;
- contracts on the transmission of electric energy or transport of natural gas in Ukraine, access to transmission capacity/distribution of capacity to/from Ukraine;
- derivative contracts relating to the transmission of electricity or transportation of natural gas in Ukraine, access to capacity/distribution of capacity to/from Ukraine;
- agreements for the supply of electricity or natural gas with the authorized consumption capacity (under a contract with the operator of the distribution/transmission system) or with the nominal consumption capacity (under a contract with the operator of the gas distribution/gas transportation system), which ensure the consumption of 600 GWh per year or more at the maximum production consumption capacity of the consumer’s facility (round-the-clock consumption for a year).
The requirement to register as a WEM participant in Ukraine places foreign entities in an uncomfortable position. This is because non-resident companies already operating in the EU and planning to enter the Ukrainian market, as a rule, usually obtained ACER codes long ago, as required by EU legislation. However, the need for de facto double registration – both in the EU and in Ukraine – significantly complicates access. As a result, entry into the Ukrainian market for foreign companies could take a month or even two.
There have been frequent cases when wholesale energy products were operated without registration with the NCREPU at all. This resulted in letters – reports of violations with demands to explain the reasons for non-compliance with Ukrainian legislation.
According to the requirements of the Resolution of NCREPU No. 1812 of 4 October 2023, to register a participant of the WEM, a person intending to carry out wholesale trade operations in energy products must submit a registration form to the NCREPU in the Ukrainian and English languages. The said form is largely based on the registration format adopted by the Decision of the Agency for Cooperation of Energy Regulators (ACER) No. 01/20129 (in the European Community), with some adaptations to the European Energy Community requirements.
The challenge for non-resident persons was the necessity to fill in this form, submit it to the NCREPU in both electronic and paper form, and then wait for the NCREPU’s decision to include information about the non-resident person in the Register. There have been frequent cases when the NCREPU returned the submitted documents due to purely formal issues. For example, such as incorrect entry of information about labor or corporate ties of the head of the non-resident person or, or with incorrect translation – according to the Regulator, – of certain registration data of the non-resident person (location address, etc.).
Such complications only further discourage non-residents from starting or continuing their activities on the Ukrainian energy market.
December 2024: What Changed?
Persons intending to carry out transactions with wholesale energy products must be registered as participants in the WER prior to entering into purchase and sale transactions or submitting offers (bids) for purchase and sale pursuant to a wholesale energy product, regardless of whether they are registered in the register of regulatory authorities of other states as participants in the wholesale energy market and regardless of and irrespective of whether they have licenses for the right to carry out any activities in the wholesale energy market.
At the same time, from 20 December 2024, the Regulator introduced a voluntary registration procedure for non-resident participants in the wholesale energy market, provided that they have a code issued by the Agency for the Cooperation of Energy Regulators (ACER) or an ECRB code issued by the Regulatory Authority of another Energy Community Treaty Party, are planning to make or make only such transactions:
- acquisition of the right to use an interstate crossing as a result of an initial allocation of interstate crossing capacity; and/or
- ordering natural gas transportation services to which entry/exit points on interstate interconnections have been allocated. This is unless the right to use such capacity is transferred to other customers.
The introduction of changes (including simplification of bureaucratic procedures) by the NCREPU for non-resident entities should have a positive impact on their interest in carrying out their activities on Ukraine’s wholesale energy market. This will facilitate the entry of existing players into the Ukrainian energy market. This will provide a positive impetus for recovery of the Ukrainian economy and its further development. Moreover, such simplifications of procedures have the ultimate goal of creating a common trading space for companies from Europe and Ukraine in the field of wholesale energy products, which will bring the Ukrainian energy market even closer to the European market and eliminate redundant and burdensome processes, including actual duplication of registrations (first in the EU, then in Ukraine).
At the same time, non-residents of Ukraine, who are already registered as participants of the WEM, should note that certain peculiarities need to be taken into account when operating on the Ukrainian wholesale energy market. These peculiarities are related to the provision of mandatory information and are regulated by the Law of Ukraine “On the Electricity Market”.
The obligations of WEM participants are stipulated in Article 73(5) of the Law of Ukraine “On the Electricity Market” and they include the following:
- provide the NCREPU with information on economic and trade operations on the wholesale energy market concerning wholesale energy products, including offers (bids). A participant of the wholesale energy market shall provide such information through a data transmission administrator and/or independently, if such participant has obtained the status of a data transmission administrator according to the procedure established by the NCREPU;
- provide the NCREPU with information on capacity and utilization of facilities for generation, storage, transmission or consumption of electricity, including scheduled and unscheduled unavailability of such facilities.
The question as to whether a non-resident entity that is not registered as an WEM participant, but has exercised its voluntary right not to register in Ukraine (due to the type of operations determined by the NCREPU), is obliged to provide information to the NCREPU remains controversial to this day. At present, an official clarification of the NCREPU on this issue is awaited so as to understand the Regulator’s approach regarding whether the obligation to provide information through a data transmission administrator (hereinafter – “DTA”) or independently after acquiring the status of a data transmission administrator for economic and trade operations on the wholesale energy market regarding the acquisition of the right to use an interstate cross-section based on the results of the initial allocation of capacity for interstate crossings.
As provided by NCREPU Resolution No. 618, WEM participants (…) are required to provide the NCREPU with information on completed economic and trade operations on the wholesale energy market regarding wholesale energy products, including executed and unexecuted offers (bids).
Pursuant to paragraph 5.3 of Resolution No. 618, WEM participants (…) provide information on completed economic and trade operations related to wholesale energy products, including executed and unexecuted offers (bids), as well as on basic (fundamental) data on the electricity market (…) through one or more DTAs on the basis of contract(s), or independently, if they received DTA status.
Both parties to the economic-trading transaction (seller and buyer) shall submit information, including in cases where the same DTA handles reporting for both sides of the transaction.
If the Regulator comes to the conclusion that even persons who have used their voluntary right not to be registered as a participant in the WEM are obliged to provide information through the DTA, or to obtain the status of ADF themselves, this may lead to redundant actions (conclusion of additional transactions for data transfer via the ADF) or acquisition of the independent status of DTA.
Perhaps, in this regard, we should expect additional amendments to NCREPU regulatory documents, which will regulate this issue regarding information provision.
In general terms, the actions of the NCREPU are considered positive – aimed at accelerating processes, reducing bureaucratic procedures, and expected to have a favorable impact on the speed of entry of non-resident persons onto the Ukrainian market for wholesale energy products. These steps will contribute to Ukraine’s development in unison with the European Union.
