Ukraine raises electricity prices for Poland and Moldova

Ukraine lifted the price of electricity exports to Poland by about twofold to USD 55 MWh, Minister of Fuel and Energy of Ukraine Yuriy Prodan said yesterday. Ukraine stopped electricity exports to Poland in late 2007, as Polish importers refused to pay this high price. Exports were resumed in April 2008. Prodan also said that Ukraine will steadily up the electricity price for Moldova to the market level (USD ~ 60/MWh) by the June 2009. Alexander Paraschiy: There is no direct impact on export prices for traded Ukrainian generation and distribution companies – all the price inefficiencies are reflected as losses by the state operator of wholesale market and the export operator. The key implication for generation companies is ensured stability of demand, as Poland and Moldova agreed to buy Ukrainian electricity going forward. This is especially important for Zakhidenergo (ZAEN: U/R), the only Ukrainian producer of electricity to Poland. Note that the National Electricity Regulatory Company of Ukraine forecasted an average price of USD 65.7/MWh on the domestic wholesale electricity market for June 2008 (in April, when exports to Poland were resumed, the price was USD 59.6/MWh), which means exports to Poland will be at 18% discount to an internal price.