Ahead of Russia's shelling, the EU may restrict electricity imports to Ukraine. Details to follow.

Ukraine must bring the operations of the Ukrenergo operator in line with European standards by December 9. Otherwise, the Ukrainian energy regulator may lose its certification to work with the EU, reports "European Truth".

In a letter from the Director of the Energy Community Secretariat, Artur Lorkowski, it is stated that the current activities of "Ukrenergo" do not comply with the unbundling procedure set forth in European directive 2019/944. Specifically, the text highlights several issues that EU representatives believe are present in Ukrenergo's operations: these include the functioning of the supervisory board and its independence, the charter of the energy operator, the role of the Ministry of Energy in the fuel and energy sector, and the ministry's decisions regarding risk management and internal control.

In the first issue, the EU secretariat believes that there is currently an incomplete composition of the supervisory board of Ukrenergo (which consists of 11 members: seven appointed by the Ministry of Energy and four independent members selected through a competition). Currently, the supervisory board has only four members, three of whom are appointed by the government, and one independent candidate, whose term will expire on December 9 of this year.

"At present, the supervisory board of 'Ukrenergo' is only functional according to quorum requirements and will cease to be so on December 9, 2024, when the mandate of one independent member ends. However, considering its composition, the supervisory board is not in a position to make independent decisions. Therefore, it is critically important that all four independent members are appointed without delay — no later than December 9, 2024, and thereafter a chairperson of the board is appointed," the letter states.

The EU secretariat also believes that the current charter of "Ukrenergo" should be revised. According to European representatives, this would allow the supervisory board to enhance its role in decision-making to "fulfill its task of protecting the functioning and commercial activities of 'Ukrenergo' from government interference."

The third issue mentioned in the letter is a reminder to the Ukrainian Ministry of Energy about the establishment of a separate unit for the independent coordination of fuel and energy operators. The EU Secretariat will note that they currently have no information regarding the establishment of such a unit and its proper functioning.

The letter also addresses the order of the Ukrainian Ministry of Energy 408/2022. According to the EU secretariat, this order effectively establishes a "parallel control system, which has led to conflicting lines of responsibility, particularly regarding accountability to the responsible supervisory boards.

"Order 408/2022 should be revised to ensure that 'Ukrenergo' can operate completely independently of the intervention of the Ministry of Energy and the energy minister," the letter states.

The EU Secretariat emphasizes that each of these points is already a sufficient reason to restart the certification procedure, as each poses an obstacle to the independent functioning of "Ukrenergo." Therefore, they request that the unbundling requirements be met and that the certification procedure begins before December 9; otherwise, the "NERC is requested to restart the certification procedure for 'Ukrenergo'."

What this letter from the EU Secretariat means for Ukraine

Energy expert and director of the Energy Research Center, Alexander Kharchenko, noted that this letter poses a serious threat. He believes that Ukraine may lose the ability to import electricity from the EU without the appropriate certification for "Ukrenergo," which could become a significant threat ahead of the new winter amid Russian shelling.

"There is no positive aspect in the received letter and in this situation overall. All the efforts — without exaggeration — of the repair teams who are restoring damaged capacities to ensure the season goes by without outages, or with minimal outages during the frost, could be completely undermined not by rockets and drones. Without imports and connection to the European system, we will be, to put it mildly, in a tough spot. However, there is still time to rectify the situation," the expert noted.

Previously, we wrote about what electricity outages will look like in Ukraine this winter. According to specialists, Ukrainians can expect power outages lasting between 4 to 18 hours a day during the winter.