Antimonopoly body initiates study of power price volatility at day-ahead market

The Antimonopoly Committee of Ukraine (AMCU) has
initiated a study of possible signs of violations of the law on competition
related to the recent collapse of electricity prices on the day-ahead market,
the Committee reported on July 5. It refers to an earlier report by the power
sector regulator that recorded a 40% decline of power demand on the day-ahead
market on July 2 with a simultaneous increase of power trading under bilateral
contracts. As a result of this shift, the electricity price collapsed 29% on
the day-ahead market. The AMCU specialists suppose such shifts in demand could
have been inflicted by “synchronous behavior of certain market participants”
and they stated that such behavior is observed periodically.

Recall, on July 2, the power sector regulator accused D.Trading,
a subsidiary of DTEK Group, of reducing power purchases at the day-ahead market
by 74% the same day, which caused a price collapse in the segment.

Alexander Paraschiy: The trading wing of DTEK is unlikely to have done anything that
violated the rules of the wholesale market, and it is natural that the holding
is trying to optimize its profit by shifting from one power market segment to
another. The problem, however, is that D.Trading is big enough to make market distortions
with its sharp moves, which in the recent case attracted the attention of the
regulator and the AMCU. While we cannot rule out negative consequences from the
AMCU’s initiative on D.Trading and power generator DTEK Energy (DTEKUA), we see
such an outcome as not very likely. In any case, such news flow does not add
optimism about DTEKUA bond recovery from the current levels in the short-term.