Debts in Ukraine's balancing market pose a threat to the operation of its energy system, according to the FSR.

Debts in the balancing electricity market pose a threat to the stable operation of the entire energy system.

This was reported by RBK-Ukraine citing a report from the Florence School of Regulation (FSR).

"Another serious issue is the debt in the balancing market. Significant debts among market participants, especially towards electricity producers, create a 'domino effect' in settlements and threaten the stability of the entire energy system," the report states.

It is noted that the critical situation with debts in the balancing market is also related to the imperfections in debt collection mechanisms and the lack of effective financial guarantees from market participants. This negatively impacts the liquidity of the entire energy sector and its investment attractiveness.

The report explains that to support reforms in the market, the Energy Community has established the Energy Observatory of Ukraine. The Observatory closely monitors all events related to the energy market and corporate governance in Ukraine, providing assessments and recommendations.

"However, the depth of the problems indicates the need for broader and more systematic support to overcome the crisis that has arisen in the energy sector," emphasized FSR.

Recall that earlier, the director of the Energy Research Center, Alexander Kharchenko, stated that due to enormous debts in the energy sector, the development of new energy projects is being blocked, and potential investors are freezing existing ones.