Recent Changes to the Transmission System Code Regarding Energy Storage

NEURC, the Ukrainian energy market regulator, during its meeting on 30 September 2022, approved changes to the Transmission System Code. The changes shall ensure proper application of the Energy Storage Law (please see our review of the law on our website) and make provisions of the Transmission System Code more specific concerning energy-generating facilities.

The changes approved by NEURC specify:

• regulation of connection of an energy storage facility;
• regulation of installation of energy storage by users connected to the Transmission System;
• requirements to operation of energy storage as a part of the Transmission System.

Interconnection with the Transmission System would be approved for energy storage with a voltage equal to or exceeding 110 kV and installed capacity exceeding 20 MW, and for energy storage with a voltage equal to 110 kV and installed capacity equal to 20 MW or fewer if substantiated by the feasibility study.

As with any other energy facility, TSO could not reject the connection of new energy storage facilities without thorough reasoning.

The changes suggest provisions that specify the obligations of an energy storage owner to ensure the performance of tests and trials to ensure the operation of energy storage in compliance with the requirement of the Transmission System Code.

The energy storage facilities operator would be obliged to pay the transmission service fee (circa EUR 10/MWh) and dispatch service fee (circa EUR 5/MWh) to Ukrenergo. The due transmission and dispatch service fee shall be calculated based on the difference between the overall monthly volume output of power and the overall monthly consumption. If an energy storage operator exports electricity, fees will be calculated based on the exported volumes.

The development of energy storage is an urgent issue for the Ukrainian power system being in need of fast balancing capacities. The effective energy storage legislation offers no support schemes for investors to encourage the development of energy storage facilities. Some models argue that there is already an attractive business case for energy storage based on the market price even without a subsidy – at least until the fast reserve market is saturated.