New report: Through a critically strenuous winter, Ukraine progresses on energy market reform; focuses on crisis management  

The Energy Community Secretariat’s Q4 2025 Ukraine Energy Market Observatory Report reveals continued progress toward EU energy market integration

The fourth quarter of 2025 placed Ukraine’s energy sector under significant operational and institutional pressure as the country entered the heating season amid ongoing wartime disruptions. The Energy Community Secretariat’s Q4 2025 Ukraine Energy Market Observatory Report shows that, while gas and electricity supply were maintained during the period covered, policy responses highlighted trade-offs between emergency interventions, ongoing market reform efforts supporting closer integration with EU energy markets, and regulatory stability. The report identifies three distinct developments that shaped Ukraine’s energy markets in Q4 2025: 

1. Energy policy was dominated by short-term crisis management aimed at ensuring system stability and preventing supply disruptions. 

Throughout the quarter, policy measures prioritised immediate system operability over longer-term market development. Key interventions included the extension of regulated electricity prices for households, enabling state-owned entities to procure electricity imports, facilitating faster commissioning of new electricity generation through simplified temporary connection procedures introduced under martial law and administrative demand-reduction measures to manage system stress and support security of supply. In the gas sector, public service obligations were prolonged, and special supply conditions were introduced to ensure gas supply for electricity generation during the heating season. 

2. Legislative and technical steps toward EU energy market integration continued in parallel with winter crisis measures 

Ukraine progressed in several areas supporting the enabling framework for future market coupling with EU energy markets, including legislative alignment and cross-border operational integration. 

On legislative alignment, work continued on the Electricity Integration Package — a prerequisite for electricity market integration ahead of EU accession — as well as on establishing the legal framework for the designation of a Nominated Electricity Market Operator (NEMO). Draft Law No. 13450, transposing elements of the TEN-E Regulation, was adopted in first reading, providing a framework for future cross-border energy infrastructure development. Finally, progress toward transposing RED II and RED III strengthens alignment with the EU acquis and advances the regulatory framework for renewable energy integration. However, delays in adopting the legislation required to introduce the RES surcharge risk are hindering the transition to a separate financing mechanism for renewable support, necessary to ensure financial sustainability, regulatory clarity, and effective implementation of RES support schemes. 

On cross-border operational integration, electricity integration advanced through increased import capacity and the launch of long-term and intraday cross-border capacity allocation mechanisms with neighbouring countries, which attracted strong market interest. 

3. Regulatory governance considerations became more visible 

The quarter highlighted ongoing considerations related to regulatory capacity and independence. This included continued reliance on administrative price interventions in wholesale electricity markets, which remain a key area of alignment with the EU electricity acquis. NEURC adopted a new strategic framework through 2030, and draft legislation addressing regulatory independence was registered in Parliament. At the same time, continued administrative intervention in wholesale price formation and delays in addressing governance matters at major state-owned energy companies illustrated areas where market oversight could be further strengthened. These developments may have implications for investor confidence, regulatory credibility, and sustained alignment with the EU energy acquis. 

The full Q4 2025 Ukraine Energy Market Observatory Report is available for download in the sidebar.