Assessment of the Methodology for Studying the Pricing Mechanism in the Transition Time of the Ukrainian Electricity Sector to the Free Market Principles

Article history Received: 14 January 2019 Accepted: 25 January 2019 Published Online: 30 April 2019 Electricity Market Act No 2019-VIII passed in 2017 by the Verkhovna Rada of Ukraine enacts in July 2019 and causes the transition of this segment of the economy to the free market principles. The implementation of this Act is perceived ambiguous. Many experts criticize this Act, which have numerous risks, especially pricing risks. In order to better understand the implications of the enactment of the adopted Act, a study was carried out on the methodology of the pricing mechanism in the retail segment of the electricity market based on the Demand Side Management (DSM) approach. In the study, one of the varieties of DSM models was used – a dynamic demand-supply model for describing the pricing mechanism and short-term forecast of retail prices. Test and comparative analysis were conducted. The last one based on possibilities of short-term forecasting of prices of DSM model with the well-known Holt-Winters method. For testing were set historical data on electricity prices in England and Wales, during the transition period from a model similar to the current model of the Ukrainian electricity market.