Ukrainian nuclear power plant operator Energatom says it understands the urgent decision taken by the Cabinet of Ministers on 28 December to extend regulations governing the electricity market. One of these regulations is to set a low price for electricity sold to the Guaranteed Buyer within the Public Service Obligation (PSO) mechanism.

The extension concerns the "assignment of special duties" on participants in the PSO to ensure they operate in the public interest, Energoatom said on 29 December.

"We understand the reasons for the urgent decision, as there was a high risk of a sharp increase in electricity prices for domestic consumers as soon as early next year," Energoatom said.

"Even if the Guaranteed Buyer pays for the electricity supplied in full, we expect a negative financial result, a cash deficit in the first quarter of 2021 of UAH4 billion, and as a result a two-fold reduction in tax payments by the company to the budgets of all levels. At the same time, we understand that as a result of imbalances in the electricity market, the Guaranteed Buyer will not be able to pay for the electricity in a timely manner, meaning an accumulation of debt to the company."

Energoatom said it has already approached the government, relevant ministries and agencies with proposals to address these issues and will "take an active part in the development of a better scenario for the financial balance of the electricity market in 2021" in order to enable Energoatom to break even.

Energoatom operates all of Ukraine's four nuclear power plants - Zaporozhe, Rovno, South Ukraine and Khmelnitsky - which comprise 15 units.