Legal Glossary for Business in Ukraine

An active consumer may be a business, a household or an energy cooperative. It may sell surplus power and take part in aggregation and demand response. The law provides a self-generation mechanism for active consumers.

Aggregation means pooling generation, consumption and/or storage assets to trade electricity or provide services. An independent aggregator is not affiliated with the consumer’s supplier. Its agreements with group members should allocate revenue, liability and data.

Ancillary services include balancing capacity and non-frequency services. Generators, consumers and storage operators that meet the Market Rules and the Transmission System Code may provide them after passing a qualification process.

The AMCU clears mergers and concerted practices, investigates competition law infringements and imposes fines. Its status is set by a dedicated law, and its decisions can be appealed to the commercial courts.

Every market participant must either be a BRP or delegate this responsibility to another BRP by joining its balancing group. A BRP signs an imbalance settlement agreement with the TSO and posts collateral. Registration is governed by the Market Rules.

A balancing group lets members offset each other’s imbalances and lower overall costs. The law provides a separate balancing group of the Guaranteed Buyer for renewables. Membership terms and cost sharing are set by the agreement with the group’s BRP.

On the balancing market, balancing service providers offer the TSO to increase or reduce generation or consumption. Balancing prices are used to settle imbalances. The market operates under the Market Rules.

A BSP submits offers to increase or decrease output or load on the balancing market. Generators must provide such services in cases set by law, while consumers and storage operators may do so voluntarily. Requirements are set by the Market Rules.

Bilateral contracts are concluded by generators, traders and suppliers, excluding supply contracts with consumers. Contracted volumes are registered with the TSO under the Market Rules. The parties agree price, schedules and credit support themselves.

Commercial court proceedings are governed by the Commercial Procedure Code of Ukraine. Most disputes between market participants, including payment disputes, go to these courts, while challenges to NEURC decisions usually go to administrative courts.

Metering data underpins invoices, imbalance settlement and renewable support payments. The rules are set by the Commercial Metering Code, and data errors frequently lead to disputes.

For an energy market participant, compliance covers licence conditions, market rules, competition law, sanctions and data protection, through policies, training and internal controls. Good compliance reduces risk during inspections.

If the parties exceed statutory thresholds, prior AMCU clearance is required. Closing without clearance is an infringement that may lead to a fine. In energy, clearance is often needed for acquisitions of plants or their owners.

Anticompetitive concerted practices, such as price-fixing or market sharing, are prohibited by law, although some may be authorised by the AMCU. Exchanges of sensitive information between competitors also create risk.

On the DAM participants submit bids and offers for each settlement period of the following day. The market operator then sets prices and volumes. DAM prices are often used as a reference in bilateral contracts and PPAs.

The DSO delivers electricity over lower-voltage networks to consumers in its area. It connects new facilities, handles commercial metering on its network and runs the supplier switching process. Relations with the DSO are governed by the Distribution System Code and the Retail Market Rules.

EFET sets standard terms on delivery, payment, credit support and early termination with netting. It is used in Ukraine too, but needs adapting to local regulation, tax and currency rules, otherwise some provisions may not work.

Supplying electricity to consumers is a licensed activity. A supplier buys power on the wholesale market and sells it to consumers, under the Retail Market Rules.

A storage facility draws electricity from the grid or from generation and releases it later. It can trade on the electricity markets and provide ancillary and balancing services. The rules were introduced by a dedicated amending law on energy storage.

Enforcement is carried out by state or private enforcement officers under the Law “On Enforcement Proceedings”. Without effective enforcement, even a won case returns no money.

NEURC sets the feed-in tariff for each facility in line with the law. Its level depends on the energy source and the commissioning date. Support terms have been amended several times, so it matters which version of the rules applies to a given plant.

Force majeure releases a party from liability if a causal link between the circumstances and non-performance is proven, often with a certificate from the Ukrainian Chamber of Commerce. Martial law alone does not automatically release a party from all obligations.

Generation is a licensed activity except in cases set by law. Generators must provide balancing services where required, and renewable generators may benefit from state support schemes.

Connection is made under an agreement and technical conditions. The procedure, timelines and charges are set by the Transmission System Code and the Distribution System Code, and operator breaches can be challenged before the regulator or in court.

A guarantee of origin is generated from data in the relevant register. It confirms the environmental value of the electricity and the related rights. Guarantees of origin are used in corporate PPAs and sustainability reporting.

The Guaranteed Buyer contracts with producers holding a feed-in tariff or support won at auction. It also pays the market premium and performs certain public service obligations. Its payment delays are among the most common causes of disputes in the renewable sector.

Imbalances are calculated for each settlement period under the Market Rules. The balance responsible party pays the TSO for them or receives payment. Forecast accuracy and metering data directly affect the charges.

Parties may refer disputes to arbitration such as the ICAC at the Ukrainian Chamber of Commerce, the ICC or the LCIA. Arbitration seated in Ukraine is governed by the Law “On International Commercial Arbitration”, and the arbitration clause must be drafted clearly.

The IDM lets participants adjust their positions after the DAM closes, closer to real time, and so reduce their imbalances. Trading is continuous under rules approved by the regulator.

NEURC approves separate licence conditions for each activity, covering organisational, technical and financial requirements and licensee obligations. Breaches may lead to fines or other sanctions.

In the EU these rules are set by REMIT, and Ukraine is introducing similar rules into its legislation. Participants must disclose inside information and refrain from misleading conduct. NEURC supervises the integrity of the electricity market.

The market operator runs auctions and continuous trading on the DAM and IDM, determines prices and volumes and settles trades. Its activity is licensed. Participants must sign agreements with it and provide collateral.

Under the market premium, the Guaranteed Buyer pays the producer the difference between the feed-in tariff or auction price and the market price, while the producer sells its output on the market itself. Switching changes the risk profile and needs legal analysis.

The Market Rules set out participant registration, balancing market operation, imbalance settlement and collateral. All wholesale participants must comply, and the regulator amends them regularly.

Mediation is voluntary and confidential, and the parties make the decisions themselves. In Ukraine it is governed by the Law “On Mediation”. For long-term energy contracts it helps preserve the business relationship.

The metering administrator keeps the register of metering points, collects and validates metering data and passes it to market participants for settlement. In Ukraine these functions are performed by the TSO. Its rules are set by the Commercial Metering Code.

NEURC is the independent regulator of Ukraine’s electricity market. It issues licences, approves licence conditions, market rules and network codes, and sets tariffs for regulated services and the feed-in tariff. It also inspects licensees and may impose sanctions. Its status is set by a dedicated law.

Inspections may be scheduled or unscheduled. A report is drawn up, on which the licensee may comment, and the regulator’s resulting decision can be challenged in court.

Licensed activities include generation, transmission, distribution, supply to consumers, energy storage and trading. NEURC issues licences on application, and licensees must comply with licence conditions at all times.

A PPA is usually signed between a renewable generator and an industrial consumer or trader. It fixes the price or pricing formula for a long term and allocates balancing and market risks. In Ukraine, PPAs are structured with the market rules on bilateral contracts and supply in mind.

A claim records the demand and gives the counterparty a chance to perform without litigation. Whether it is mandatory depends on the law and the contract, and a well-drafted claim becomes evidence in any later dispute.

PSOs are imposed under a procedure set by law, for example to keep electricity affordable for households. The decision imposing them defines participants, scope and terms, and PSO settlements can be disputed.

Renewable generation in Ukraine is supported through the feed-in tariff, the market premium and auctions. The core rules are set by the Law “On Alternative Energy Sources”, with specific criteria for small hydro.

Bidders offer the price at which they will sell electricity, and winners receive support for the period set by law. Auctions have become the main support mechanism for new large renewable projects.

The Retail Market Rules set out contracting, supplier switching, billing and disconnection, as well as violation reports. They are among the key documents for suppliers and consumers.

Under self-generation, the value of electricity injected by the consumer’s generating units is netted against the value of electricity taken from the grid, taking transmission and distribution charges into account. It is designed for own consumption, not commercial generation.

A storage operator may be a legal entity, an individual or a sole trader. Storage is licensed, but the law provides exemptions, including for a generator’s unit at its site under certain conditions. As a general rule, transmission and distribution operators may not own storage.

The supplier of last resort ensures continuity of supply, for example when the consumer’s supplier exits the market. The contract is temporary, during which the consumer must choose another supplier.

The taxpayer may submit explanations and documents. A refusal to register can be challenged administratively or in court. For traders and suppliers, blocking can cause cash flow gaps.

Tax assessment notices usually follow an audit. They can be challenged administratively before a higher tax authority or in the administrative court, under the procedure and deadlines of the Tax Code.

The Tax Code provides for desk, documentary and on-site audits. The authority issues a report to which the taxpayer may object, and good preparation often shapes the outcome.

Tax invoices are registered in the Unified Register of Tax Invoices; without registration the buyer cannot claim input VAT. For energy companies with many transactions, timely registration is critical.

Trademark rights in Ukraine are evidenced by a certificate issued by the national IP office. Registration makes it easier to stop copycats, and for suppliers and traders the brand is often a key asset.

Trading is a licensed activity. A trader does not supply consumers but deals with other participants on organised segments and under bilateral contracts, and may also import and export.

Prices in controlled transactions must meet the arm’s length principle. Taxpayers file a report and, on request, documentation. For traders dealing with related foreign companies, transfer pricing is a key tax risk.

The TSO transmits electricity over the high-voltage grid, operates the power system in real time and manages interconnections. It runs the balancing market and procures ancillary services. In Ukraine the TSO is NPC Ukrenergo.

UBO information must be filed with the state register. The regulator and banks review ownership structures, including during licensing and financing, and incomplete or inaccurate data creates regulatory risk.

Unfair competition includes misuse of designations, spreading false information about a competitor and unlawful collection of trade secrets. The AMCU hears such cases; for suppliers they often concern advertising and customer acquisition.

A universal service supplier is chosen through a tender under a procedure approved by the regulator. It may not refuse eligible consumers, and its activity is linked to public service obligations and regulated terms.

On the basis of the report, the operator’s commission may calculate the cost of unmetered electricity. The consumer may record objections and attend the review, and the commission’s decision can be challenged in court.