Ukraine’s Renewable Energy Market
Ukraine’s electricity market operates through six main segments, while renewable energy projects are shaped by grid connection, state-support, licensing and auction rules. Ukrenergo is the certified transmission system operator (TSO) and a full ENTSO-E member since 1 January 2024. Before committing capital, investors should confirm available grid capacity, the applicable support route and the current regulatory requirements for the specific project.
This article is intended for foreign investors, developers, lenders, management boards and legal or compliance teams assessing the structuring, financing or implementation of renewable energy projects in Ukraine.
1. Six Segments of the Electricity Market
2. Key Institutions and Their Roles
3. Ukrenergo and the Transmission System
4. The Right of Access to the Grid
5. State Support for Renewable Energy
6. Public Auctions on Prozorro.Sale
7. The 2026 Reform and the Road to 2034
8. Cable Pooling and Shared Grid Connections
9. NEURC as the Energy Market Regulator
10. Practical Considerations for Investors
Practical Checklist
Frequently asked questions
How DLF Can Help
1. Six Segments of the Electricity Market
Law of Ukraine “On the Electricity Market” No. 2019-VIII came into full force on 1 July 2019, replacing a centralised single-buyer model with a competitive, EU-aligned market structure. The reform divided the market into six segments — bilateral contracts, day-ahead, intraday, balancing, ancillary services, and retail — and assigned distinct legal roles to a transmission system operator, a market operator, a state guaranteed buyer, regional distribution system operators, and an independent regulatory commission.
European integration deepened after Ukraine’s power system synchronised with Continental Europe in March 2022 and Ukrenergo became a full ENTSO-E member on 1 January 2024.
The Energy Community Secretariat’s Q1 2026 Ukraine Energy Market Observatory Report shows that, while short-term crisis management remained central to energy policy, Ukraine also made important progress on legislative alignment with the EU electricity acquis and reforms supporting future market integration.
Among the key developments shaping Ukraine’s energy market reform trajectory in and immediately after the first quarter of 2026:
1. Ukraine adopted major legislation advancing EU electricity market integration.
In April 2026, Ukraine introduced legislative changes that opened the way for coupling the Ukrainian electricity market with the European market (market coupling). In the longer term, this is expected to lead to the integration of the Ukrainian and EU electricity markets.
2. Emergency measures continued to support system stability but affected market predictability.
Ukraine maintained a strong focus on crisis management in response to continued damage to energy infrastructure and power system constraints. Temporary measures included obligations for selected state-owned companies to procure imported electricity during the autumn-winter period, simplified procedures for connecting distributed generation, and temporary derogations from certain electricity distribution quality standards. Electricity market operations were also shaped by frequent changes to wholesale price caps on the day-ahead, intraday and balancing markets. While intended to support imports and system stability during periods of deficit, frequent changes to market rules may affect regulatory predictability and market participants’ planning.
3. Renewable energy framework strengthened, but implementation challenges remain.
Law No. 4777-IX, adopted in February 2026, introduced positive changes to Ukraine’s renewable energy framework. These include the introduction of a market premium mechanism for renewable energy support, extended auctions for support quotas until 2034, incentives for combined solar and storage projects, and provisions on guarantees of origin.
On 11 August 2026, NEURC also approved amendments to the Retail Electricity Market Rules and the Procedure for the Sale and Accounting of Electricity Generated by Active Consumers. The adopted amendments expand the use of own generation, simplify settlements for active consumers and support the further development of distributed generation in the retail electricity market.
For renewable energy investors, this places the Ukrainian transmission system operator within European grid coordination, cross-border planning and technical-standard review processes. The detailed milestones and Ukrenergo’s role are addressed below.
2. Key Institutions and Their Roles
Six institutions shape the daily functioning of Ukraine’s renewable energy market:
| Institution | Legal role |
|---|---|
| Ukrenergo (TSO) | Operates, maintains, and develops the high-voltage transmission system; dispatches all generators; manages balancing |
| Market Operator | Organises day-ahead and intraday electricity trading sessions |
| Guaranteed Buyer | Purchases electricity from renewable producers at the green tariff or market premium under purchase-and-sale agreements; manages the balancing group of renewable energy producers. |
| NEURC | Issues licences; sets tariffs; certifies the transmission system operator; approves grid connection methodology; enforces market rules |
| Distribution system operators (DSOs) | Operate regional distribution grids; connect most renewable energy projects |
| Ministry of Energy and Cabinet of Ministers | Propose and approve annual and indicative renewable energy auction quotas |
Prozorro.Sale is the state digital platform on which renewable energy support auctions are conducted. The Guaranteed Buyer is a state legal entity that purchases renewable electricity for resale on the wholesale market. NEURC is established under Law of Ukraine “On the National Commission for State Regulation of Energy and Public Utilities” No. 1540-VIII; its regulatory powers and independence safeguards are addressed in a separate section below.
3. Ukrenergo and the Transmission System
Ukrenergo is certified by NEURC as the TSO under the ISO (Independent System Operator) model. Under that model, the operator manages and dispatches the transmission grid while the transmission assets remain in state ownership. For transaction-specific matters, the applicable governance arrangements are determined by the current official records for those assets.
The Law of Ukraine “On the Electricity Market” No. 2019-VIII assigns the transmission system operator responsibility for operating, dispatching, maintaining and developing the transmission system and, where applicable, its interconnections with other systems. In practical terms, Ukrenergo also manages dispatch, system balancing and the allocation of transmission capacity.
The path to European integration ran through three confirmed milestones. The emergency grid synchronization of 16 March 2022 connected Ukraine to the Continental European synchronous area. ENTSO-E observer status followed in April 2022. Full ENTSO-E membership took effect on 1 January 2024, following the General Assembly decision of 14 December 2023. ENTSO-E’s announcement identified Ukrenergo as Ukraine’s transmission system operator.
ENTSO-E membership means Ukrenergo participates in European grid coordination, European cross-border scheduling processes, and technical standards reviews — providing a regulatory anchor that is directly relevant to any investor assessing country-level grid governance risk.
4. The Right of Access to the Grid
The Law of Ukraine “On the Electricity Market” No. 2019-VIII guarantees every market participant the right of non-discriminatory and transparent access to the transmission and distribution systems on conditions that must be publicly announced in advance. This is a legal right to equal treatment — not a guarantee that physical connection capacity exists at any given location.
Two separate codes govern connection depending on project size and connection voltage:
Transmission-level connection is regulated by the Transmission System Code (Resolution of the National Energy and Utilities Regulatory Commission “On Approval of the Transmission System Code” of 14 March 2018 No. 309; the version in force on the date of the relevant procedure applies to the specific project). Generating installations with a capacity above 20 MW, or generating installations in other cases provided for by the applicable technical conditions, may be connected to the transmission system, as may energy storage installations and consumers at voltage levels above 110 kV. Generating installations are classified by maximum capacity and voltage level as Type A, B, C or D. Ukrenergo issues technical conditions defining the connection point, required technical specifications and compliance-verification steps. Energy storage installations are expressly covered by the Transmission System Code.
Distribution-level connection governs the large majority of renewable energy projects and is regulated by the Distribution System Code (Resolution of the National Energy and Utilities Regulatory Commission “On Approval of the Distribution System Code” of 14 March 2018 No. 310). The procedure runs in eight steps:
1. Application submission to the DSO
2. The DSO issues technical conditions
3. The applicant prepares the design documentation and cost estimates
4. Review and approval of the design documentation and cost estimates
5. Construction of external connection infrastructure (funded by the applicant)
6. Testing and commissioning
7. Connection and energization
8. Execution of the distribution service contract
The technical conditions become an attachment to the connection contract. Under the Distribution System Code, DSOs must also take renewable energy producers into account in network development planning.
In December 2025, NEURC updated its methodology for calculating grid connection fees for 2026. The project-specific calculation, financing mechanics and other procedural conditions are determined by the NEURC decision in force when the connection application is filed. The connection fee is determined for the specific project.
5. State Support for Renewable Energy
Ukrainian legislation provides several support mechanisms for renewable electricity producers, including the green tariff and support under the market premium mechanism. For auctions from 2030, an updated market premium model is provided.
The green tariff is a guaranteed purchase price set individually — for each qualifying producer, each type of renewable energy, and each generating facility — under Article 9-1 of the Law of Ukraine “On Alternative Energy Sources” No. 555-IV. The price is calculated as a technology-specific coefficient multiplied by the baseline retail electricity rate from January 2009, denominated in euro. The Guaranteed Buyer purchases all electricity from qualifying producers at this fixed price.
The green tariff framework covers qualifying facilities under the Law of Ukraine “On Alternative Energy Sources”. All green tariff payment obligations expire on 31 December 2029. New commercial-scale wind (above 5 MW) and solar (above 1 MW) projects must access state support through the auction mechanism described below rather than the direct green tariff route. The precise eligibility conditions for new project applications under the Law of Ukraine “On Alternative Energy Sources” depend on the characteristics of the specific project and the applicable statutory requirements. Households with solar or wind installations and energy cooperatives of up to 150 kW (with at least ten members) qualify for the green tariff under a dedicated coefficient tier.
The auction-based market premium (Feed-in Premium, FiP) applies to commercial wind projects above 5 MW and solar projects above 1 MW, which are required to compete for support through the auction process. Auction winners conclude a market premium agreement with the Guaranteed Buyer.
6. Public Auctions on Prozorro.Sale
Ukraine’s renewable energy support auction framework operates under Article 9-3 of the Law of Ukraine “On Alternative Energy Sources”. The process follows a three-level chain: the Ministry of Energy proposes quotas; the Cabinet of Ministers approves them by resolution; auctions are conducted on the state Prozorro.Sale digital platform; and winners sign market premium support contracts with the Guaranteed Buyer.
Participation is mandatory for wind projects above 5 MW and solar projects above 1 MW. Projects below those thresholds may participate voluntarily.
Order of the Cabinet of Ministers of Ukraine “Certain Issues of Conducting Auctions for the Allocation of Renewable Energy Support Quotas for 2026 and Establishing Indicative Forecast Indicators of Annual Support Quotas for 2027–2030” of 1 April 2026 No. 298-r sets the support quota for 2026 at 1,000 MW, of which 700 MW is for wind, 50 MW for solar, 100 MW for solar projects with an energy storage installation, and 150 MW for other alternative sources, including biomass, biogas and small hydropower. The same order establishes indicative (non-binding) quotas for the following years: 359 MW (2027), 386.2 MW (2028), 404.4 MW (2029), and 425.8 MW (2030).
From 2025, price caps under the Law of Ukraine “On Alternative Energy Sources” are:
Wind and solar: no more than 8 euro-cents per kWh Other renewable sources and solar projects with an energy storage installation: no more than 12 euro-cents per kWh
Ukraine’s first live renewable energy support auction — the 2024 pilot — covered 110 MW (88 MW wind, 11 MW solar, 11 MW other), was announced on Prozorro.Sale on 27 September 2024, and used a higher transitional cap of 9 euro-cents per kWh. Solar lots in the pilot were restricted to the left bank of the Dnipro River, excluding territories under occupation. The Cabinet of Ministers announcement of 27 September 2024 confirmed the Prozorro.Sale platform and pilot parameters.
No single entity — or group of entities sharing a beneficial owner — may hold more than 50% of the annual support quota.
Of the four 2025 auction rounds, three ended without winning bids and one wind quota round in July 2025 produced a successful outcome, according to multiple Ukrainian energy news sources. Project documentation on the 2025 auction outcomes should rely on official results from the Guaranteed Buyer or the Ministry of Energy. For a developer, the more relevant question is whether the individual project’s economics, readiness and financing remain viable under the applicable auction terms.
At the time of filing, the applicable participation thresholds, price caps, annual quotas and concentration limits are those set by current legislation and the terms of the specific auction.
7. The 2026 Reform and the Road to 2034
Law No. 4777-IX, adopted in February 2026, materially changed Ukraine’s auction-based renewable energy support framework. Project modelling is governed by the legislation in force when the relevant investment decision is made.
Extended support period: the auction mechanism, previously set to expire on 31 December 2029, now runs to 31 December 2034 — adding five years to the investment window for project developers, lenders, and equipment suppliers.
Adjusted performance timelines: auction winners must commission projects within 18 months (solar) or 36 months (other renewable technologies) of contract signing. During martial law and for 42 months after its end, the performance deadline for non-solar projects is extended to 42 months.
Technology quota flexibility: the minimum technology quota share per auction round was reduced from 10% to 5%, according to the Ministry of Energy’s announcement on the 2026 reform.
Reduced financial guarantee requirements or other financial security: requirements for bank guarantees or other financial security for auction participation were reduced to EUR 5 per 1 kW of capacity being allocated.
Battery storage integration: battery energy storage systems (BESS) may be integrated into cable pooling arrangements, reinforcing the framework introduced by the 2025 amendments.
Guarantees of origin: the guarantees of origin mechanism was also improved and aligned more closely with EU standards. The detailed requirements are determined by the legislation in force.
Financial models and auction packages should reflect the performance deadlines, quota parameters and financial-guarantee requirements in force on the relevant date.
8. Cable Pooling and Shared Grid Connections
Law No. 4213-IX, which entered into force in February 2025, introduced cable pooling into Ukrainian energy law. The mechanism allows a developer to connect electrical installations of different types at a single grid connection point — even if the total installed capacity of all installations exceeds the permitted connection capacity at that point — provided two conditions are met: the combined feed-in at any moment does not exceed the permitted connection capacity, and each installation type is separately metered.
Before February 2025, each renewable energy facility required its own connection point. Under cable pooling, a developer who has negotiated a single grid connection can install both a solar park and a battery storage system at that point, or a wind farm and a battery storage system, without a separate connection application for each technology. The storage component absorbs output when generation exceeds the connection capacity and releases it when generation falls — making the shared connection more efficient.
Power reservation for wind projects: the 2025 amendments introduced a power reservation mechanism for wind projects of at least 20 MW, allowing developers to secure grid capacity during the development phase. Technical conditions for these projects may remain valid for up to six years. The capacity threshold and validity period are determined by the legislation in force when the project is structured.
NEURC adopted implementing secondary legislation for cable pooling in July 2025; the applicable procedure is determined by the implementing rules in force for the project. The integration of BESS into cable pooling arrangements is further addressed by the 2026 amendments.
Cable pooling is available to any renewable electricity producer connecting different technologies at a single connection point.
9. NEURC as the Energy Market Regulator
NEURC — the National Energy and Utilities Regulatory Commission — is established as the independent state regulatory body for energy and utilities by Law of Ukraine “On the National Commission for State Regulation of Energy and Public Utilities” No. 1540-VIII of 22 September 2016. It regulates electricity production, transmission, distribution, supply, energy storage, and aggregation, as well as natural gas, district heating, and certain water and sewerage services.
NEURC’s powers most directly relevant to renewable energy investors are: Licensing: NEURC issues licences for electricity generation, including from renewable sources, and determines which activities require a licence. Specific licensing requirements depend on the technology and project capacity.
Tariff-setting: NEURC annually approves the transmission and dispatch tariffs for Ukrenergo, distribution tariffs for each DSO and the rates applicable to Guaranteed Buyer purchase agreements. Connection fee amounts are determined separately for each DSO depending on the type of connection, capacity, location and reliability category.
Transmission system operator certification: NEURC certified Ukrenergo as the transmission system operator under the independent system operator model and supervises ongoing compliance. For transaction-relevant matters, the current NEURC certification decision is the applicable reference.
Connection fee methodology: NEURC develops and approves the methodology for calculating electricity-network connection fees. Rates for standard connection, rates for the line component of connection and rates for non-standard capacity connection are calculated annually for all DSOs, approved by NEURC and published on its official website before the start of the calculation period.
Enforcement: NEURC may inspect licence holders, investigate violations, and impose sanctions for breaches of licensing conditions or market rules. Its decisions are subject to administrative court review.
NEURC’s regulatory independence is established by Law of Ukraine “On the National Commission for State Regulation of Energy and Public Utilities” No. 1540-VIII: the commission is insulated by that statute from binding executive instructions on regulatory decisions. Investors should treat NEURC decisions — including tariffs, licence conditions, and connection fee approvals — as the operative regulatory facts for any project financial model.
10. Practical Considerations for Investors
A foreign investor or developer entering Ukraine’s renewable energy market faces a sequential set of regulatory steps before a project is operational.
Legal entity and investment structure: the project company is commonly established as a Ukrainian limited liability company (LLC), with ownership structured at the investor’s discretion. Tax obligations — including corporate profit tax, value added tax (VAT), and withholding tax on dividends — apply from the point of incorporation. Ukraine’s double taxation treaty network may affect withholding rates on cross-border returns. Currency repatriation rules and investment protection under the applicable international treaty are assessed at the outset of project structuring.
Grid connection: the project company applies to the relevant DSO or to Ukrenergo, depending on connection voltage. The eight-step distribution procedure applies to most renewable projects. Technical conditions must be obtained, engineering design prepared, external infrastructure funded and constructed by the applicant. Connection fee amounts are project-specific under NEURC’s 2025 methodology.
Support mechanism route: commercial wind (above 5 MW) or solar (above 1 MW) developers must win a quota allocation in a Prozorro.Sale auction to access state support. For projects at or below the capacity thresholds, the green tariff framework under the Law of Ukraine “On Alternative Energy Sources” may apply, subject to the applicable eligibility conditions.
NEURC licensing: a NEURC licence for electricity generation is required. Specific licence requirements depend on technology and project capacity. For BESS projects, licensing requirements remain subject to separate legal assessment before any project commitment.
Land and construction: renewable energy projects require compliance with Ukrainian urban planning, land, and environmental legislation. The procedure varies by project size, technology, and location.
Balancing and ancillary services: balancing responsibility for renewable energy producers is determined by the applicable market rules for the specific project. Commercial-scale battery storage is operational in Ukraine and provides ancillary services to Ukrenergo, confirming that the ancillary services market functions in practice.
Wartime context: martial law affects certain project timelines, procedures, and access to project sites. Current implementation deadlines and any land-use or access restrictions are assessed separately for the relevant project.
Investment protection and regulatory risk: available investment-protection mechanisms, possible administrative disputes, currency restrictions and insurance options require separate assessment for the specific project structure.
Practical Checklist
For projects seeking state support:
- Confirm project capacity and technology (thresholds: wind >5 MW / solar >1 MW → mandatory auction participation)
- Discuss connection options with the DSO or Ukrenergo in advance and obtain technical conditions
- Check the annual quota and auction calendar of the Cabinet of Ministers and Ministry of Energy
- Prepare auction documentation: project company, bank guarantees and technical documentation
- Confirm eligibility for the green tariff or market premium with legal counsel
- Determine the investment structure: Ukrainian LLC, double taxation treaties and currency repatriation
- Obtain the NEURC licence (electricity generation; storage requirements should be checked separately)
- Review land and construction matters: land rights, planning documentation and environmental requirements
- Clarify balancing responsibility and ancillary-services obligations
- For cable-pooling projects, review the current rules on shared grid connections and the implementing rules of the National Energy and Utilities Regulatory Commission; ensure separate BESS metering
Frequently asked questions
What market segments operate in Ukraine’s electricity market?
Ukraine’s electricity market operates across six segments under the Law of Ukraine “On the Electricity Market”: bilateral contracts between producers and large buyers; the day-ahead market; the intraday market; the balancing market; the ancillary services market; and the retail market. The day-ahead and intraday markets are organised by the Market Operator. System balancing is managed by Ukrenergo as transmission system operator.
What state support is available for a new solar or wind project in Ukraine?
Commercial solar projects above 1 MW and wind projects above 5 MW must win support through a competitive auction on Prozorro.Sale. Auction winners receive a market premium from the Guaranteed Buyer — a payment ensuring the contracted price is achieved even when wholesale prices fall below it. The auction mechanism now runs to 31 December 2034 following the 2026 reform. Projects at or below the capacity thresholds may qualify for the green tariff under the Law of Ukraine “On Alternative Energy Sources”, subject to eligibility conditions.
How does a renewable energy producer connect to the Ukrainian electricity grid?
Most renewable energy projects connect at distribution level under the Distribution System Code, which sets an eight-step procedure: application to the DSO, issuance of technical conditions and preparation of project documentation. The next steps are approval of the documentation, construction of the connection infrastructure at the applicant’s expense, testing, energization and execution of the service agreement. The Law of Ukraine “On the Electricity Market” guarantees the right of non-discriminatory access on conditions announced in advance, but connection requires completion of the established procedure and is not automatic. For projects with a capacity above 20 MW or in cases provided for by technical conditions, as well as for energy storage installations and consumers at voltage levels above 110 kV, the Transmission System Code and Ukrenergo apply.
What does cable pooling change for renewable energy projects in Ukraine?
Cable pooling, introduced by the 2025 amendments, allows different generation and storage technologies — solar, wind, and battery energy storage systems — to share a single grid connection point. Before the 2025 amendments, each technology generally required its own connection. Under cable pooling, a developer can install a solar park and a battery system at a single point, reducing connection costs and enabling storage to optimise the use of allocated grid capacity. Each installation must be separately metered, and combined output must not exceed the permitted connection capacity. NEURC adopted implementing secondary legislation for the cable pooling mechanism in 2025; for live project work, the applicable NEURC rules and operational details in force are the relevant reference.
What does ENTSO-E membership mean in practice for renewable energy investors?
Ukrenergo became ENTSO-E’s 40th full member on 1 January 2024, following the emergency grid synchronization with the Continental European area on 16 March 2022. ENTSO-E membership means Ukraine’s transmission system operator operates under European grid coordination rules, participates in cross-border scheduling processes, and is subject to ongoing review by the European energy regulatory community. For investors, it confirms that Ukraine’s grid governance operates within the same European grid coordination framework that applies across ENTSO-E member states.
How did the 2026 reform change renewable energy support in Ukraine?
The 2026 legislative changes extended the auction-based support mechanism to 31 December 2034. The market premium mechanism was updated in favour of the producer. Certain implementation deadlines and bank-guarantee requirements were also changed, an option to provide financial security instead of a guarantee was added, and the use of energy storage installations in shared-connection arrangements was further regulated.
How DLF Can Help
DLF attorneys-at-law supports foreign investors, developers and project companies throughout renewable energy projects in Ukraine. The work may include corporate structuring, project documentation, land-rights due diligence, review of grid connection terms, NEURC licensing, participation in support auctions and review of key project contracts.
For battery energy storage and hybrid projects, DLF advises on cable pooling, connection agreements, permitting and regulatory risk. Relevant DLF practice areas include Renewable Energy Law and Corporate Law / M&A.
Yaroslav Anikieiev, Counsel — DLF attorneys-at-law
Contacts: +380 44 384 24 54, info@dlf.ua
This material is intended for general information only. The application of the approaches described above depends on the circumstances of each specific case and requires a separate legal assessment.