The Public Union “Energy Union” draws attention to the fact that starting from January 15–16, 2026, the highest state authorities officially recognize the presence of an emergency situation in Ukraine’s energy system. Massive missile and drone attacks on generation, transmission, and distribution facilities have led to capacity shortages, emergency and hourly power outages, consumption restrictions, and the need to apply special crisis management mechanisms within the energy system.
The existence of this regime is publicly confirmed by government decisions, statements from the President of Ukraine, the Prime Minister, and the First Deputy Prime Minister — Minister of Energy of Ukraine, as well as the establishment of headquarters to eliminate the consequences of the emergency situation in the energy sector. In practice, the state acknowledges that the energy system is operating not under normal conditions but in a crisis mode.
At the same time, a significant legal and economic paradox arises. Despite the official recognition of an emergency situation in the energy sector, financial and settlement relations among electricity market participants continue to operate under standard rules designed for normal, “peacetime” conditions. Standard market mechanisms for imbalance settlement, financial responsibility, and calculations are fully applied, without accounting for the objective constraints caused by the crisis state of the energy system.
As a result, a situation of dual reality has emerged: at the level of state policy and operational management, the emergency situation is recognized and effectively in place, whereas in financial settlements among market participants, it is absent. This raises a fundamental question: is the non-application of the emergency regime in market settlements a deliberate managerial decision, or a consequence of delays or the non-use of mechanisms explicitly provided for by law?
The answer to this question carries not only managerial but also direct economic significance, as it affects the financial stability of suppliers, the level of risk of cash gaps and defaults, price dynamics for consumers, and the overall resilience of the electricity market.
Recording only the objective facts, it should be noted that the absence of the emergency regime in market calculations has direct economic consequences. The use of standard market mechanisms under crisis conditions leads to a sharp increase in imbalances, disproportionate financial burden on suppliers, and, consequently, to an increase in the final cost of electricity for consumers (including the budget, businesses, and industry).
At the same time, current Ukrainian legislation provides for the possibility of introducing a special market operating regime in emergency situations specifically to minimize price fluctuations, limit financial risks, and maintain the accessibility of electricity. Timely implementation of such mechanisms allows for the redistribution of systemic risks and prevents their direct transfer to market participants and end consumers.
To eliminate legal uncertainty, the Public Association “Energy Union,” which unites electricity market participants, has sent official requests to the Ministry of Energy of Ukraine, NEC “Ukrenergo,” and the NERC to provide clarifications on the application of the emergency regime specifically in market settlements and mechanisms.
The basis for these requests were official notifications from state authorities regarding the existence of an emergency situation in Ukraine’s energy sector as a result of massive attacks by the Russian Federation. Additionally, by government decision, the authority to lead the response to the consequences of the emergency in the energy sector was vested in the First Deputy Prime Minister — Minister of Energy of Ukraine, which officially confirms the recognition of such a regime at the level of the executive branch.
At the same time, as of today, the official website of NEC “Ukrenergo,” as the transmission system operator, does not contain information on the introduction of an emergency regime in the Ukrainian power system or its individual regions within the meaning of the Transmission System Code. Furthermore, the notifications and decisions required by this Code, which should accompany the implementation of such a regime, are also absent.
The key question raised in the Association’s requests is fundamental: is the emergency regime currently considered to be in effect in the Ukrainian power system (or its individual regions) within the meaning of the Transmission System Code, and, consequently, should the special mechanisms explicitly provided for in the current legislation be applied?
It should be emphasized that the legal regulation of an emergency situation in the United Energy System of Ukraine is comprehensive and clearly defined. The relevant provisions are contained in the Law of Ukraine “On the Electricity Market,” the Transmission System Code, the Electricity Market Rules, and NERC Resolution No. 332 in its current edition.
The lack of clear application of this regime is already leading to measurable economic consequences. Suppliers, fulfilling their contractual obligations, had procured electricity in advance to ensure that consumers received the required volumes. However, due to massive and unpredictable outages, a significant portion of these volumes was not consumed and automatically ended up on the balancing market, where it was sold at minimal prices. At the same time, a resource deficit emerged on the “day-ahead” market, causing a sharp increase in prices.
An additional factor was the adoption of NERC Resolution No. 70 on January 16, 2026, which changed the maximum price caps on the day-ahead, intraday, and balancing markets. While this decision created conditions for the import of electricity, it simultaneously led to a significant rise in day-ahead market prices, which on certain days reached up to UAH 13,000/MWh, far exceeding the parameters established in the current calculations of universal service tariffs.
Under these circumstances, universal service providers found themselves in a critical situation: electricity procurement is carried out at record-high prices, while the mechanisms for determining the universal service tariff do not take into account either the scale of outages or the actual cost of the resource. This creates significant cash gaps and poses risks not only to the financial stability of universal service providers but also to the uninterrupted supply of electricity to households.
The consequences of this situation are already being felt by end consumers. Budgetary institutions are receiving mass notifications about price increases or early contract terminations, while suppliers with fixed tariffs face the risk of systemic losses and bankruptcies.
In this context, the key question remains: why, despite the officially recognized emergency in the energy sector, has the corresponding regime not been applied in market settlements? Timely use of the mechanisms provided by law could have significantly mitigated price volatility, reduced financial burdens on market participants, and preserved the stability of the energy sector during this critical period for the country.