The Cabinet of Ministers of Ukraine, upon the submission of the Ministry of Energy of Ukraine, has approved amendments to the Procedure for Conducting Electronic Auctions for the Sale of Electricity under Bilateral Agreements.

The decision was adopted in order to align the current Procedure with the provisions of the Law of Ukraine No. 4777-IX aimed at improving the functioning of energy markets, enhancing competition in the renewable electricity generation sector, and strengthening energy resilience.

Under the adopted amendments, electricity producers operating distributed generation facilities will be able to conclude direct bilateral agreements with consumers without the mandatory requirement to conduct electronic sales auctions.

The changes will also facilitate the conclusion of direct bilateral agreements between consumers and such producers without mandatory electronic auctions. This will allow the parties to directly negotiate electricity supply terms on mutually beneficial conditions.

According to Denys Shmyhal, the decision is one of the outcomes of the Ministry of Energy’s dialogue with representatives of the gas generation sector.

“This is also an important step toward expanding the practice of so-called PPA contracts — long-term power purchase agreements concluded between a generating company and a corporate consumer,” stated First Deputy Prime Minister of Ukraine and Minister of Energy Denys Shmyhal.

Such agreements make it possible to locate generation facilities directly near the electricity-consuming enterprise. This helps ensure uninterrupted electricity supply even under security risks, while businesses benefit from predictable electricity prices and operational stability, alongside reduced pressure on the power system.

The decision removes regulatory barriers to the development of distributed generation, simplifies interaction between producers and consumers, and creates additional incentives for investment in new generation capacity.

Implementation of the resolution is expected to enhance the flexibility of the electricity market, support the development of distributed generation, expand opportunities for direct agreements between producers and consumers, and strengthen Ukraine’s energy resilience through the deployment of additional generation capacity.

“By encouraging private investment in the decentralized gas generation sector, we will accelerate the formation of a new energy architecture for Ukraine with a high level of autonomy for regions, communities, and enterprises,” Denys Shmyhal added.

The decision represents another consistent step by the Government and the Ministry of Energy aimed at creating favourable regulatory conditions for the development of distributed generation and improving the efficiency of the electricity market.