The reform signals a structural shift away from a nationally isolated market model toward European market architecture
May 2026
On 24 April 2026, Ukraine enacted Law No. 4834‑IX "On Amendments to Certain Laws of Ukraine Regarding the Implementation of EU Law on Energy Market Integration, Security of Supply, and Competitiveness in the Energy Sector".
The Law is of strategic importance for Ukraine’s European integration and serves as a framework for the gradual transition from a nationally isolated day‑ahead (DAM) and intraday market (IDM) model to integration with EU and Energy Community trading zones through a unified market coupling mechanism.
For market participants, the framework provisions introduced by the Law translate into several key changes of practical significance.
MARKET COUPLING
The unified market coupling model is based on the coordinated interaction between electricity trading and the use of cross‑zonal transmission capacity. In this context, the updated regulation changes the approach to capacity allocation, shifting from a model based on individual cross‑border interconnections to a cross‑zonal model.
The Law provides for the use of different mechanisms: explicit auctions, implicit auctions and continuous implicit allocation. These mechanisms are not mutually exclusive: they may be applied in parallel in respect of the same interstate interconnector.
The key change concerns the short-term market segments. For the DAM and IDM, transmission capacity will no longer be allocated separately, but will be determined automatically together with electricity trading through implicit auctions.
At the same time, access to cross‑border capacity through explicit auctions remains available as a general allocation mechanism outside the scope of market coupling.
As part of its integration into coupled markets, Ukraine also provides for a phased connection to European balancing platforms. This will create opportunities for cross-border balancing, enhances the overall resilience of the power system and facilitates the expansion of the range of participants in the balancing market.
ACCESS TO THE EUROPEAN LIQUIDITY POOL
Ukrainian market participants will gain access to the common European liquidity pool, where prices are formed on transparent and harmonised principles. The market coupling mechanism ensures the automatic direction of cross‑border electricity flows from lower‑price zones to higher‑price zones.
In practice, this opens access to a broader price range, including the possibility of trading during periods when certain EU zones experience zero or negative prices due to surplus renewable generation. For market participants, this creates additional opportunities for more efficient planning of electricity procurement and for reducing its average cost.
REMOVAL OF PRICE LIMITS
From 1 May 2027, during the operation of single market coupling, minimum and maximum price limits on the DAM and the IDM will not apply. Only technical price limits harmonised with EU rules and not restricting trade will be permitted.
REGULATORY OVERSIGHT AND THE ROLE OF ACER
As Ukrainian trading zones are progressively connected to coupled markets, wholesale electricity transactions executed on Ukrainian trading platforms will be included in the pan-European market monitoring regime and will be treated on an equal footing with transactions of market participants from other EU Member States. In this system, ACER plays a leading role and, within the framework of market coupling mechanisms:
determines and approves the price limit parameters and methodologies applicable to the DAM and the IDM;
participates in the establishment and review of trading zone configurations at regional level;
adopts decisions and recommendations that are binding within the relevant market coupling mechanisms.
At the same time, the National Energy and Utilities Regulatory Commission of Ukraine (NEURC) retains its status as the national regulatory authority and ensures:
regulatory oversight of the domestic market;
cooperation and exchange of information with ACER;
implementation of ACER decisions to the extent provided for by law.
COMPLIANCE UNDER MARKET COUPLING
Integration into the coupled European electricity markets also entails the application of REMIT rules, which establish requirements for market integrity and transparency in wholesale trading. These rules are aimed at preventing insider trading and market manipulation and require the disclosure of inside information and reporting of transactions.
In practice, this involves the following key requirements:
registration as a wholesale market participant and identification in the European monitoring system by obtaining an ACER code;
organization of reporting on transactions and orders on wholesale markets;
implementation of basic internal procedures for handling inside information and monitoring trading behaviour.
RESTRICTION OF TENDERING PROCEDURES FOR CONSTRUCTION
The updated regulation significantly narrows the use of competitive tender procedures for the construction of new generation capacity, energy storage facilities, and the implementation of demand‑side management measures.
Starting from 1 May 2027, such tender procedures will be applied only in exceptional cases – to cover forecast demand and ensure the required reserve capacity in areas officially identified by the Transmission System Operator as capacity‑deficient. As a result, tenders shift from a general mechanism for generation development to a targeted tool for addressing localized capacity shortages.
This approach provides for the application of special capacity mechanisms aimed at addressing resource adequacy concerns by attracting new or existing resources on a targeted basis where market signals are insufficient to ensure forecast demand or the required level of capacity reserve. Such mechanisms are expected to be further detailed at the level of secondary regulation.
AGGREGATION, DEMAND RESPONSE AND FLEXIBILITY
The Law details the model of aggregation and the participation of aggregators in the electricity market, thereby reducing uncertainty in the delineation of their functions from those of other market participants. In particular:
independent aggregators are subject to a restriction on performing the function of a supplier for consumers included in the aggregated group;
an aggregator may transfer balance responsibility to another party.
In addition, the Law establishes the right of consumers and aggregators, including independent aggregators, to participate in all segments of the electricity market and in the provision of flexibility services on equal and non-discriminatory terms with producers.
Transmission and distribution system operators are required to involve aggregators in the provision of ancillary services and flexibility services, taking into account their technical capabilities. At the same time, the introduction of a compensation mechanism is permitted to cover the actual costs of other market participants associated with the activation of demand response, provided that such compensation does not restrict the participation of aggregation in the market.
Separately, the Law allows Distribution System Operators to procure flexibility services to ensure the safe and reliable operation of distribution networks, creating additional demand for such services at the local level and expanding their practical application.
REDISPATCHING
The Law clarifies the approaches to redispatching and expands the range of resources that may be used to ensure the stability of the power system. Demand response and energy storage facilities are expressly recognised as full-fledged redispatching instruments on an equal footing with generation. The selection of the relevant resources is carried out through market-based mechanisms on transparent and non-discriminatory terms, with the possibility for all technologies to participate, where technically feasible.
Non-market-based redispatching is permitted only as an exception – where market-based instruments are unavailable or have been exhausted, where there is insufficient competition in a particular network area, or where structural congestion exists which cannot be effectively addressed by market-based means.
The legislative amendments have already established the legal basis for integrating the Ukrainian electricity market with the European market. However, further steps will be required for this model to become fully operational, including the development and adoption of secondary legislation, the technical integration of market and network processes, and the resolution of certain external regulatory matters, including those relating to the application of CBAM.
Taking these factors into account, 1 January 2028 or 1 January 2029 is currently being considered as an indicative launch date for the market coupling mechanisms, depending on the pace of regulatory implementation and the level of technical readiness.
