Vladyslav Sokolovskyi, Chairman of the Board of the Solar Energy Association of Ukraine (SEAU), gave an interview to the online media outlet Delo.ua, where he discussed the current state of Ukraine’s battery energy storage system (BESS) market, the prospects for energy arbitrage, and the key factors shaping the investment attractiveness of this rapidly growing sector.
According to the expert, Ukraine has now reached a stage where using battery energy storage systems for energy arbitrage has become economically viable. Significant price fluctuations on the Day-Ahead Market (DAM) enable operators to charge batteries during periods of low electricity prices and discharge them when prices peak.
“Price volatility on the Day-Ahead Market is currently high enough for energy arbitrage to function as a profitable business model. At the same time, the balancing market could potentially offer even greater returns. However, its development is currently constrained by substantial outstanding debts and lengthy settlement periods,” said Vladyslav Sokolovskyi.
The expert also explained that the efficiency of a BESS project depends primarily on the technical characteristics of the installation – particularly its energy capacity and power rating – as well as on the chosen operating model. In practice, investors most commonly utilize two charging and discharging cycles per day, typically during the morning and evening peak demand periods.
Assessing the market outlook, Vladyslav Sokolovskyi emphasized that the ongoing war remains the greatest risk factor for investors.
“The primary risk factor is the military situation. This concerns not only the potential physical damage to storage facilities themselves but also outages affecting the electricity networks to which they are connected. Today, the war is the single most significant factor influencing both electricity prices and overall market development,” he stressed.
The SEAU Chairman also highlighted the growing importance of the ancillary services market, which is creating new business opportunities for BESS owners. He noted that the long-term ancillary services contracts awarded by NPC Ukrenergo through competitive auctions provide investors with predictable revenue streams and send a strong positive signal to the investment community.
“Ancillary services contracts represent an entirely different business model. They provide investors with predictable euro-denominated revenues for five years, significantly enhancing the investment attractiveness of battery energy storage projects,” Mr. Sokolovskyi noted.
The Solar Energy Association of Ukraine emphasizes that the development of battery energy storage systems remains one of the key drivers of the transformation of Ukraine’s energy sector. BESS are increasingly being deployed not only to strengthen the energy security of businesses and communities but also as a critical tool for enhancing grid flexibility and supporting the development of a modern, competitive electricity market.