The Cabinet of Ministers of Ukraine has approved a decision to launch the second stage of the tender for the construction of new generation capacity. The initiative concerns the development of new flexible generation facilities required to strengthen the resilience of the power system and ensure electricity supply to regions most affected by russian attacks.

As noted by First Deputy Prime Minister of Ukraine – Minister of Energy Denys Shmyhal, the tender envisages the construction of 1,322 MW of capacity in the regions experiencing the most significant electricity shortages:

• Sumy, Kharkiv and Poltava regions — 872 MW
• Kyiv and Cherkasy regions — 250 MW
• Dnipropetrovsk region — 100 MW
• Odesa region — 100 MW

“This will help reduce the load on the electricity transmission system and make the respective regions more energy resilient and self-sufficient,” Denys Shmyhal emphasized.

According to him, the first stage of the tender was completed at the end of last year, with the total guaranteed capacity of projects proposed by businesses amounting to 78.1 MW.

“For the second stage, we have taken into account proposals from businesses and updated the rules. Each facility must now provide guaranteed capacity of at least 10 MW and be equipped with a second level of protection. The winner will also undertake obligations to construct the required capacity within clearly defined deadlines, while the state will ensure the necessary incentives and conditions,” the Minister of Energy stated.

Tender proposals may be submitted within three months following the publication of the tender documentation. Construction of the new generation facilities is expected to commence by the end of November.

As Denys Shmyhal noted, participants will benefit from an incentive support mechanism: for five years following the commissioning of the facility, compensation of up to EUR 0.2792 per kWh will be provided for the service of ensuring the development of generation capacity. The support will be granted through a market premium mechanism in cases where electricity prices during morning and evening peak hours fall below the MWh price determined during the tender process.

The updated tender conditions also provide for:

• compliance of installations with technical requirements for balancing the Ukrainian power system;
• a guaranteed equipment service life of at least 20 years or 100,000 operating hours;
• guaranteed electricity sale prices for owners of newly constructed facilities;
• simplified qualification and financial requirements for participants, aimed at strengthening competition and attracting more investors.

“We expect that the entire planned volume of capacity will be commissioned by the end of 2027. This will become one of the key elements in the development of distributed generation and will contribute to shaping a new architecture of Ukraine’s energy security,” Denys Shmyhal stressed.