OREANDA-NEWS. December 23, 2009. NEC Ukrenergo sold 275 MW of electricity capacity to be exported to Romania, Slovakia and Hungary from the so-called Burshtyn TPP Island by auction. Experts believe that former monopolist, Korlea Invest, will not be able to challenge the auction results.
 
Director of the Energy Research Centre, Konstantin Borodin, believes that recommencement of electricity export capacity auctions will allow increasing exports and getting away from the current monopolistic and corrupt system of exports. Member of the Verkhovna Rada’s FEC Committee, Nikolay Pashinskiy, shares this opinion. ‘The auction will destroy the current monopoly and create a new dynamics of electricity exports development. Even though our courts can do what they wish, I do not see any grounds to appeal against the auction in court as the auction was held in a lawful manner without any violations’, says the People’s Deputy.

Yet, Borodin has no confidence that the second auction will be held on time. ‘Korlea Invest Group has enough experience with having auctions challenged and governmental decisions on market liberalization revoked’, he adds.

The expert reminds that in 2007, it was this company that initiated the annulment of the previous electricity export auctions, which were held by the government of Viktor Yanukovich and resulted in actual price growth. ‘Certainly, Korlea Invest is not going to give up and it is going to have legal proceedings further. Its court experience is big enough. The most regrettable thing is that officials from the Ministry of Fuel and Energy will be playing into the hands of this company the same way they aided and abetted the company and made every effort to disrupt competition in this export market’, says the Director of the Energy Research Centre. According to him, today, it is especially vital to benefit from exports in view of under-utilization of domestic fossil-fuelled generation capacities’.

As mentioned earlier, yesterday’s auction was the first open competitive tender which actually eliminated the monopoly of the companies controlled by Korlea Invest in the market of electricity export to Eastern European countries. The auction on selling  275 MW of electricity capacity to be exported to Romania, Slovakia and Hungary from Burshtyn Island energy island should have taken place on December 15. But korlea Invest managed to suspend the auction via the court. Kiev District Administrative Court passed the corresponding resolution.

Nevertheless, on the same day, December 15, DTEK Vostokenergo challenged the administrative court’s resolution. The Company also managed to challenge the resolution of Kiev Economic Court. It will be recalled that the Economic Court of the capital forbade Ukrenergo to conclude agreements on ensuring access to transmission capacity of cross-border transmission lines of Ukraine to export electricity.