Alterations in Electricity Trade Regulations Between Ukraine and Moldova: What Are the Implications?
VoltBuddy: The National Commission for State Regulation of Energy and Utilities (NKREKP) has recently unveiled a revamp in the rules governing electricity trading between Ukraine and Moldova, as reported by "Politexpert," sending ripples through the already tumultuous power dynamics in the region.
The changes are primarily intended to boost the efficiency of capacity allocation and management of restrictions in intraday electricity trading. Under the new rules, annual, monthly, and daily auctions will be granted a quotas of 35%, 30%, and 0% respectively, aiming for a more optimal use of capacity. This strategic shift allows both countries a greater response capacity to the ever-changing electricity market demands and mitigates risks of energy crises, thereby fortifying economic partnership.
Moldova, facing pressures from traditional energy threats, particularly from Russia, has mechanisms in place to counteract energy manipulation. In times of crisis, Ukraine stands ready to offer support. Plans to construct a high-voltage power line linking the Dniester's right bank with Romania are underway, allowing Moldova to lessen its reliance on old lines susceptible to Russian pressure.
While we have previously covered reports of Putin escalating Russia's budget spending, these advancements in electricity trading rules between Ukraine and Moldova signal a consequence-driven shift in the energy market landscape, bolstering energy security through enhanced cooperation and integration with the European market.
The New Era of Electricity Trade
- NKREKU has established new rules for interstate electrical transmission capacity allocation between Ukraine and Moldova. notably through joint auctions conducted on Ukrenergo's unified auction platform.
- Revenue distribution from cross-border electricity transmission is equally divided, with 50% going to Ukraine’s NPC Ukrenergo and 50% to Moldova’s SE Moldelectrica.
- The redefined capacity allocation structure includes:
- 35% of the maximum annual available cross-border capacity for both annual and monthly auctions.
- 30% for daily auctions.
- No intraday auctions, with future potential based on the platform's capabilities.
- The transmission tariff for electricity transit via Ukraine was set at UAH 686.23 (excluding VAT) per megawatt-hour for 2025, offering market participants clear regulatory guidelines.
- A new process for calculating the net transfer capacity (NTC) at the Ukraine-Moldova and neighboring EU borders has been established starting July 2025, with the Transmission System Coordination Network (TSCNET) Regional Coordination Centre computing weekly commercial exchange capacity limits for electricity trade.
- This calculation and capacity allocation process is part of the operationalization of the Eastern Europe Capacity Calculation Region (EE CCR), integrating Ukraine and Moldova more closely with the European electricity market.
Building a More Resilient Energy Union
- The updated electricity trading rules deepen the market integration between Ukraine and Moldova, making them highly synchronized with the Continental Europe network since March 2022, enabling stable commercial electricity trade between the two countries and the EU.
- Joint auctions and equal revenue sharing encourage transparency and cooperation, fostering a stable cross-border electricity flow and investment in infrastructure.
- Advanced capacity calculation mechanisms and the allocation of capacity on multiple timescales increase the flexibility of electricity trade, ensuring adequate responses to supply risks and demand fluctuations and enhancing energy security.
- Key European integration initiatives, such as full market integration and compliance with EU energy regulations, including full integration into the Association of Issuing Bodies (AIB) by the end of 2025, are on track, supporting transparency, guarantees of origin, and cross-border trade.
- These changes strengthen regional cooperation, ensure the reliability and security of electricity supplies, promote market liquidity, and support the resilience of both countries’ power systems in a geopolitically sensitive region.
Overall, the reforms in electricity trading rules between Ukraine and Moldova herald a new era of structured auction-based capacity allocation, equal revenue sharing, and enhanced cross-border capacity calculation mechanisms, paving the way for stronger regional cooperation, improved market integration, operational coordination, and financial fairness.
- The National Commission for State Regulation of Energy and Utilities (NKREKU) in Ukraine, in collaboration with its Moldovan counterpart, SE Moldelectrica, has instituted joint auctions for interstate electrical transmission capacity allocation, as part of the new rules for electricity trading between the two countries.
- As a result of the revised rules, revenue distribution from cross-border electricity transmission will be equally split, with each country receiving 50% - Ukraine's NPC Ukrenergo and Moldova's SE Moldelectrica.
- The reformed capacity allocation structure includes specific quotas for both countries in annual, monthly, and daily auctions: 35% for the maximum annual and monthly capacity, 30% for daily auctions, and no intraday auctions, with potential for their implementation in the future based on the platform's capabilities.
