“Ukrenergo” holds the first special auction for the purchase of ancillary services

On August 15, NPC Ukrenergo held the first long-term special auction for the purchase of frequency support reserves (FSM) for 5 years.

The company reports, the auction was organized to ensure stable operation of the power system.

According to the preliminary results, the entire demand for this type of reserves was purchased – 99 MW.

The auction was attended by 39 participants (generating units) who made 230 offers. The preliminary winners were 12 companies that offered the lowest prices for the provision of the DFR service: from UAH 500 to UAH 1001 per megawatt. The weighted average price per megawatt is less than UAH 700. At the same time, the price cap in the ancillary services market for providing DGF is UAH 1339.82 per megawatt.

The final results of the auction will be announced after the deadline for appeal.

According to Ukrenergo, the supply in each hour significantly exceeded the demand put up for auction and amounted to 368 MW. For comparison, for 15 days in August, the offer at daily auctions for the purchase of the DAM service was covered by an average of 22% and did not exceed 30 MW (with a demand of 99 MW).

The winners of the auction will have a fixed contract with Ukrenergo for the provision of LFR services for 5 years, with a one-year delay in the provision of the service from the date of the auction. This means that investors will have until October 2025 to build a power plant or energy storage facilities and get their equipment certified to provide this type of reserve.

The winners must deposit financial security into escrow accounts within 30 days.

All the bidders in the auction are new entrants to the electricity market, which, according to Ukrenergo CEO Volodymyr Kudrytskyi, means that a new decentralized generation facility will be built in Ukraine within a year. This will strengthen the resilience of the Ukrainian power system to Russian attacks and increase the balancing capacities needed for its stable operation.

Reference

Ancillary services for the provision of frequency support reserve is a service to ensure the readiness of generating equipment to respond to changes in frequency in the power system. This is a quick reserve that is provided automatically, no later than 30 seconds. This type of reserve is necessary for the stable synchronous operation of the European and Ukrainian power systems.

The next long-term auction will be held on August 22 for the provision of automatic frequency restoration reserve (AFR).

Translated with DeepL.com (free version)