Ukrainian Electricity Market Reform - Implementation Assistance (Phase I)



Business sector:

Sustainable Resources and Climate Change, Power and energy

Funding source:

UKMD00 - Ukraine Multi-Donor

Contract type:

Consultancy Services

Notice type:

Invitation for expressions of interest (CSU)

Issue date:

22 Dec 2016

Closing date:

31 Jan 2017   at  23:59   London

Access eSelection

Amendment dated 10/01/2017: The closing date for receipt of expressions of interest is extended until 31 January 2017.

Project Description:

Ukraine is currently in the process of undertaking significant reforms in the electricity sector. These reforms include the implementation of the EU-Ukraine Association Agreement. Ukraine confirmed its commitment to implement the EU’s Third Energy Package that became part of the Energy Community Treaty Acquis with the Decision of the Ministerial Council of the Energy Community (Decision 2011/02/MC-EnC) adopted in 2011.

As part of these reforms, a new Law "On Electricity Market" (that is compliant with the EU's Third Energy Package) has been drafted and has been approved by the Parliament of Ukraine on its first reading (on 22 September 2016). It is currently expected to be adopted in early 2017. This law envisages new electricity market arrangements, including a bilateral contracts market, day-ahead market, intraday market, balancing market, ancillary services market and retail market. Implementation of this Law requires, among others, drafting of all secondary legislation and market rules, reform and establishment of main centralised institutions and other market participants (e.g. TSO, Market Operator, Guaranteed Buyer), procurement of software and hardware for market functioning, as well as other implementation measures. In addition, the Law envisages a transition period (24 months from the time the Law is adopted) during which a number of temporary arrangements will be put in place while the new electricity market model is gradually introduced.

The Energy Community Secretariat (ECS), with financial support from the British Government, established the Project Office on the development of secondary legislation for the new electricity market. Other international organisations are also providing implementation support through various activities – for example a Twinning Assignment funded by the European Union as well as various technical assistance provided by the World Bank.

Assignment Description:

Responding to a request from the National Energy and Utilities Regulatory Commission (NEURC) of Ukraine, the European Bank for Reconstruction and Development ("EBRD" or the "Bank") has structured this assignment to be implemented by a consultant (the “Consultant”) to carry out implementation assistance associated with electricity sector reforms.

The primary focus of this assignment is to provide assistance for the implementation of new market arrangements, including those that will be in place during the transition period. The new arrangements, which are in line with Energy Community legislation and EU best practice, aim to promote the introduction of market discipline to Ukraine's power sector and to create a favourable investment climate for private sector participation. This assignment is the first phase of the Bank’s assistance (Phase I), and it will lead to the development of assistance activities for a second, larger, phase of assistance (Phase II).

The Consultant is expected to undertake the following tasks under Phase I:

1. Coordinate NEURC's implementation activities with those of other organisations

Coordinate NEURC's implementation activities with those of other organisations, including (but not limited to) the Ministry of Energy and Coal Industry, the Coordination Centre, the TSO (extending to all the roles of the TSO envisaged by the forthcoming Law), the market operator, DSOs, the Guaranteed Buyer, and others. The Consultant will be responsible for liaising with other organisations and their consultants, as well as any additional consultants and advisors appointed by NEURC, to ensure that the regulator’s implementation activities are coordinated.

2. Development of Terms of References (ToR) for consultancy assistance for NEURC during the implementation period of the new electricity market model

Preparation of the ToR will require the Consultant to:

  • undertake a review of the Law (with a viw to identifying all reform activities associated with its implementation);
  • undertake a review of documents associated with the Law, including (but not limited to), drafts of any secondary legislation that have been prepared to-date and the Electricity Market Concept Design Note (as approved by NEURC);
  • identify the regulator’s needs over the remaining months of the transition period; and
  • account for the current and planned implementation activities of other organisations.

The ToR shall not include the activities that are separately covered in the tasks outlined below. NEURC, in consultation with EBRD, will advise on whether a single ToR is required for all activities, or separate ToR will be prepared for activities requiring different expertise.

3. Development of a ToR for the procurement and development of the Regulatory Authority Information System

This will support NEURC in performing its regulatory duties related to electricity market monitoring under new electricity market arrangements (and consistent with the requirements prescribed by the “Third Energy Package” and other EU relevant regulations).

4. Assessment of NEURC's modelling needs

The Consultant will undertake a detailed assessment of NEURC’s current modelling capabilities, and identify its modelling needs to fulfil the regulatory duties envisaged under the new Law. Recommendations for future modelling needs should draw upon the modelling capabilities of other energy-sector regulators in EU countries with well-established regulatory frameworks. The recommendations will extend to preparing ToR that can be used by NEURC to procure future modelling support. Some recommendations may be incorporated within the scope of Task 2.

5. Estimate costs of electricity generation plants

The Consultant will prepare estimates of the costs of electricity generation of different sources available in Ukraine. The estimates will be prepared for representative plants for different types of sources (for example, nuclear, hydroelectric, coal-fired thermal generation, CHP, etc.). The estimates should cover a broad range of types of power generation facilities reflecting the generation mix of the Ukrainian power sector. This will (in some cases) involve developing estimates for several representative plans for an individual source. These estimates should be provided for plants that are currently operating in Ukraine, as well as estimates for greenfield facilities that potentially can be constructed in Ukraine.

The purpose of this modelling would to be inform the regulator’s view of potential market dynamics in the new electricity market arrangements with a view to supporting the Regulator’s activities. The Consultant should therefore:

  1. Identify the types and mix of generation plants that would be representative for Ukraine’s electricity sector;
  2. Select the appropriate cost structures that would be relevant to understanding of future market dynamics;
  3. Prepare estimates of costs (as defined in Task 5.2) for the representative generation plants (identified in Task 5.1).

6. Summarise potential future electricity markets dynamics

Based on the results from Task 5, envisaged market model structure and the experience of electricity market reforms in other similar jurisdictions, the Consultant will conduct a review to summarise potential dynamics of new electricity market arrangements envisaged in Ukraine. This review should take account of the characteristics of the electricity sector in Ukraine, including (but not limited to):

  1. the (draft) market rules of the wholesale markets (including the impacts of any Public Service Obligations);
  2. generation mix available in Ukraine, characteristics of generation assets, including the level of installed capacity, the flexibility of generation sources, and the availability of assets;
  3. system constraints, including grid constraints and constraints imposed by the way in which units may be committed (for example, use of CHPs in the heating season;
  4. the characteristics of demand, including seasonal variations; and
  5. projections of fuel prices and fuel availability in Ukraine.

The review would use the costs estimates developed under Task 5 above as a basis for outlining how electricity prices can develop across different segments of the wholesale market. The analysis would not involve the development of a formal electricity market modelling tool.

The output of this task would be a summary outlining how different generation sources are likely to affect electricity prices under different conditions. The summary would describe the incentives faced by different types of generation companies in different market conditions (reflecting their cost structures, competition mix and the wider characteristics of the market). It would build on these incentives to describe how the behaviour of generation companies in different conditions and different market segments (bilateral contracts, DAM and Intraday Market, Balancing Market, Ancillary Services, cross-border trade) is likely to influence wholesale electricity prices.

NB: As one of the assignment tasks is a scoping of the follow-on work that will be implemented under Phase II, the Consultant selected for this assignment (Phase I) will not be eligible to participate in the procurement process for the Phase II assignment.

Status of Selection Process: Interested firms or groups of firms are hereby invited to submit expressions of interest.

Assignment Start Date and Duration: The assignment is expected to start in April 2017, or at the time of adoption of the new Law “On Electricity Market” - whatever is earlier, and has an estimated overall duration of 9.5 months.

Cost Estimate for the Assignment: EUR 227,000 (exclusive of VAT).

The Consultant must determine whether any VAT would be chargeable on the services and the basis for that determination, without taking into consideration the special status of the Bank as an IFI and state this to the Bank in their response to the Invitation for Expressions of Interest. To the extent that a Consultant incurs input VAT on goods and services purchased in connection with the provision of services (e.g. VAT on airline ticket) which is not otherwise recoverable by the consultant from the local tax authority, the gross cost to the consultant of such expenses shall be treated as a reimbursable expense.

Funding Source: It is expected that the assignment will be funded by EBRD-Ukraine Stabilisation and Sustainable Growth Multi-Donor Account.

Eligibility: There are no eligibility restrictions.

Consultant Profile: Corporate services are required. The Consultant will be a firm or a group of firms preferably with previous project experience related to:

1. Advising government officials, regulators or regulated companies in the process of similar electricity market reforms to the Ukrainian one. Specific experience of electricity policies and/or reforms that are consistent with EU requirements (i.e. the Third Energy Package and other relevant EU regulations);

2. Coordinating the activities of a diverse set of local and international stakeholders;

3. International and local legal experience with respect to reviewing primary and secondary legislation on electricity markets and electricity market rules;

4. Modelling electricity markets, and collection and analysis of electricity market data.

The Consultant’s expert team is expected to include key experts as follows:

- Electricity market reform economics expert (Team Leader) – who will have overall responsibility for the delivery of all tasks. The Team Leader will have economics expertise and experience in advising on electricity market reforms.

- Coordination manager – who will be responsible for working closely with all relevant Ukrainian experts and other organisations engaged in electricity market reforms. The Coordination Manager will have experience of managing stakeholder engagements and have expertise in electricity markets.

- Electricity market legal expert – who will be responsible for reviewing legal documents and will have international and local legal expertise – particularly with respect to reviewing primary and secondary legislation on electricity markets, and electricity market rules.

- Electricity market modelling expert – who will have experience of modelling electricity markets, and collection and analysis of electricity market data.

- Local sector expert – with experience of working in the Ukrainian electricity sector.

Submission Requirements:
In order to determine the capability and experience of consultants seeking to be shortlisted for this assignment, the information submitted should include the following:

1. Company/group of firms’ profile, organisation and staffing (max. 2-4 pages).

2. Details of previous project experience or similar assignments particularly undertaken in the previous five years, including information on contract value, contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided (if different from duration) , main activities, objectives.

3. CVs of key experts who could carry out the Assignment detailing qualifications, experience in similar assignments, particularly assignments undertaken in the previous five years, including information on contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided, assignment budget, main activities, objectives.

4. Completed Consultant Declaration Form and Contact Sheet, the template for which is available from the following web-link:

The above information should not exceed 25 pages excluding CVs and the Consultant Declaration Form and Contact Sheet.

The complete expression of interest (including CVs, Consultant Declaration and Contact Sheet) should be submitted, in English electronically through e-Selection, to reach the Bank not later than the closing date. The expression of interest shall be one file (pdf). The EBRD reserves the right to reject applications of firms submitting more than one file. Only if the permissible file size is exceeded (4MB), the Consultant may split the expression of interest into further files.

Bank Contact Person:

Elena Kolodiy

Associate Advisor

Technical Co-operation

European Bank for Reconstruction and Development

One Exchange Square

London EC2A 2JN

Tel: + 44 20 7338 6765

E-mail: (submissions should be sent through eSelection and NOT to this email address)


1. The selection will normally be made from responses to this notification only. Consultants will not be asked to submit a proposal. The highest-ranked Consultant will be selected from a shortlist and be invited to negotiate the contract.

2. The evaluation criteria are:

(a) Firm's experience of advising on electricity market reforms that are consistent with EU Third Energy Package – 25%

(b) Firm's experience of amending and reviewing electricity market related primary and secondary legislation – 10%

(c) Firm's experience of electricity market modelling – 25%

(d) Firm's experience of electricity market reforms similar to the Ukrainian one– 10%

(e) Key Experts' CVs – 30%