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Support for Household Prosumers in the Early Stages of Power Market Decentralization in Ukraine

Author

Listed:
  • Man Zhou

    (School of Accounting and Finance, Xi’an Peihua University, Xi’an 710071, China)

  • Uliana Pysmenna

    (Department of Economics and Entrepreneurship, Faculty of Management and Marketing, National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute”, 03056 Kyiv, Ukraine)

  • Oleksandra Kubatko

    (Department of Economics, Entrepreneurship and Business Administration, Institute of Business, Economics and Management, Sumy State University, 40007 Sumy, Ukraine)

  • Volodymyr Voloshchuk

    (Department of Economics and Entrepreneurship, Faculty of Management and Marketing, National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute”, 03056 Kyiv, Ukraine)

  • Iryna Sotnyk

    (Department of Economics, Entrepreneurship and Business Administration, Institute of Business, Economics and Management, Sumy State University, 40007 Sumy, Ukraine)

  • Galyna Trypolska

    (State Institution “Institute for Economics and Forecasting, NAS of Ukraine”, 01011 Kyiv, Ukraine)

Abstract

This paper aims to reconsider prosumers’ role in the power markets in the early stages of their decentralization, accounting for rising self-supply trends, security threats, and economic and regulatory barriers. The development of prosumerism envisages finding the ratio between retail market sales under the feed-in tariff and the net billing mechanism. Within the methodology section, the indicator of prosumer efficiency for electricity generation (EUR/kWh) is proposed based on average consumption/production ratios and consumption/delivery incentives. To support household prosumers, the mentioned incentives on the renewable energy market consider the self-supply cost of electricity, the levelized cost of electricity for small-scale green energy facilities (solar photovoltaic and wind), and transaction costs. This paper evaluates prosumer efficiency under three consumption/production ratio scenarios for Ukrainian households (self-consumption of 40%, 20%, and 100% of green electricity annually generated by a household and selling the leftovers via the feed-in tariff) for 2023. The gradual movement from fixed tariffs for households toward market-based prices promotes the emergence of new related market players and their consolidation in the market. Participation in the organized power market segments is relevant for day-ahead market prices above 130 EUR/MWh, disregarding the households’ tariff rate. The low price caps inhibit the prosumer’s participation in the market, while the transition from the feed-in tariff to net billing significantly promotes their development only under high price caps.

Suggested Citation

  • Man Zhou & Uliana Pysmenna & Oleksandra Kubatko & Volodymyr Voloshchuk & Iryna Sotnyk & Galyna Trypolska, 2023. "Support for Household Prosumers in the Early Stages of Power Market Decentralization in Ukraine," Energies, MDPI, vol. 16(17), pages 1-15, September.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:17:p:6365-:d:1231568
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    References listed on IDEAS

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