Energy Giant Posts 500-600% Profit Margins as Expert Accuses Sector of 'Looting' in Ukraine's Power Market

The Myth of a Free Electricity Market in Ukraine

According to ХВИЛЯ: Ukraine's electricity market is far from free, dominated by two major monopolists: state-owned Energoatom and private firm DTEK, according to energy expert Oleh Popenko. Energoatom supplies roughly 62% of the nation's power, while DTEK previously controlled up to a quarter of the market. Popenko has highlighted troubling conflicts of interest among officials-specifically pointing to the case of Volodymyr Kudrytskyi-and opaque compensation schemes that demand closer scrutiny.

Inside the Power Market's Profit Machine

Data from the Verkhovna Rada's Temporary Investigative Commission (TSC) reveals that Energoatom's production cost for electricity ranges from 1.10 to 1.15 hryvnias per kilowatt-hour (excluding VAT). Yet the company sells that same power at prices between 4.5 and 6 hryvnias, yielding profit margins of 500–600%. Popenko has branded this situation as outright looting and is calling for a formal investigation into these findings.

The expert also cast doubt on the need to compensate regional power distribution companies (oblenergo) for tariff differences, given the massive profits already baked into generation costs.

'How can we talk about compensating oblenergo for tariff differences when we see 500 percent excess profit embedded in the cost of generation?' Popenko asked.

He noted that Naftogaz previously served as a quasi-tax collector, but now Energoatom has taken on that role, extracting substantial sums from both households and businesses.

Popenko expressed concern over potential collusion among oblenergo companies, Ukrenergo, the energy regulator NKREKP, and lawmaker Andriy Herus, who he says lobbies for these entities.

'Just imagine-oblenergo will be compensated for a tariff difference not at 9 hryvnias, but, say, 15 hryvnias, and this difference appears out of thin air,' Popenko stated.

Ukraine's energy sector remains in a state of tension, urgently requiring measures to restore transparency and genuine competition.

The absence of a truly free electricity market in Ukraine casts serious doubt on the effectiveness of existing regulatory and competition mechanisms. Given the expert's revelations, there is a growing need for an investigation and greater openness in dealings among the market's dominant players. This situation could have severe consequences for consumers, whose interests may be overlooked in an environment where monopolies control the vast majority of the market.

The alarming profit margins reported by Energoatom raise critical questions about the overall fairness of the electricity market in Ukraine. As highlighted by energy experts, Ukrainians are burdened with electricity costs that are disproportionately high compared to their European counterparts. To understand the underlying reasons for these disparities and the implications for consumers, read more about how Ukrainians face significantly higher electricity bills than their neighbors in Europe.