Ukraine Energy Market Observatory:  EU-aligned reforms advance while key institutional challenges remain 

The Secretariat's Q2 2026 Ukraine Energy Market Observatory Report shows that during the second quarter of 2026, important progress was made in implementing the legal foundation for electricity market integration with the EU (the Electricity Integration Package), modernising electricity and gas market rules, and strengthening the framework for renewable energy deployment. At the same time, the report highlights that key institutional reforms – notably strengthening the independence of the national regulator and preparing roadmaps for post-war market liberalisation – remain outstanding. The report identifies four key developments shaping Ukraine's energy market reform trajectory during the second quarter of 2026: 

1. Ukraine strengthens the foundations for future integration into the EU electricity market 

Following the partial adoption of the Electricity Integration Package earlier this year, Ukraine has begun putting in place the regulatory building blocks for future integration with the EU's internal electricity market. Ukraine's energy regulator, NEURC, initiated the steps to enabl  the designation of  Nominated Electricity Market Operators (NEMOs) in Ukraine. Following the public consultations the procedure was formally adopted on 7 July 2026 (early Q3), after which candidates could begin applying for NEMO status. At the same time, the regulator adopted a comprehensive implementation plan comprising more than 200 measures to align Ukraine's electricity market rules with the EU acquis.  In other electricity sector modernisation developments, long-term bilateral electricity auctions were introduced, while a tender for more than 1.5 GW of new generating capacity was launched under a new market-based support mechanism designed to strengthen system resilience. 

Importantly, the responsibility for transposing the remaining network codes and guidelines that form part of the Electricity Integration Package still needs to be formally assigned. 

2. Renewable energy and long-term climate-planning gained momentum 

Ukraine significantly strengthened its renewable energy framework during the quarter. The Government increased the 2026 renewable energy support quota from 330 MW to 1 GW, including a dedicated quota for combined solar and storage projects, while also adopting an updated National Energy and Climate Plan to 2030. The approval of the Biomethane Production Development Programme until 2035 further reinforces Ukraine's ambitions to develop a competitive renewable gas sector and prepare for future integration with the European biomethane market. 

3. Further steps taken to align Ukraine’s gas market with EU standards 

In the gas sector, Ukraine advanced alignment with EU market rules by submitting legislation transposing the Security of Gas Supply Regulation, introducing energy-based cross-border capacity allocation, updating transportation and storage tariff methodologies, and completing important corporate governance steps for both electricity and gas transmission system operators. 

4. Institutional independence and market liberalisation remain key priorities 

Despite progress across the energy sector, key governance reforms remain unfinished. No progress was made on legislation aimed at strengthening the independence of  NEURC, while the roadmap for the gradual liberalisation of electricity and gas markets after martial law has yet to be prepared. The Secretariat underlines that advancing these reforms will be essential for ensuring transparent, competitive energy markets and supporting Ukraine's full integration into the EU internal energy market.