Number of Customers Switching to Supplier of Last Resort Triples Amid Electricity Tender Failures

Challenges in Public Electricity Procurement

According to Главком: Delays in securing power suppliers for state and municipal buyers are mounting due to persistent issues in public procurement processes. According to an analysis conducted using SmartTender's analytical tools, the number of consumers forced to rely on the supplier of last resort (SOLR) in the first quarter of 2025 tripled compared to the same period in 2024. This problem has been escalating since 2021, when electricity prices surged sharply and a 10% cap on price increases in contracts was introduced.

Oleksandr Kudym, Director of Euro Trade Energy LLC, stated that multiple requests for data on this issue were sent to Ukrenergo, but no response was received. Part of the necessary information was gathered thanks to inquiries from civic organizations and journalists. Kudym emphasized that

“the difference in the first quarter-and the first quarter is the heaviest period for the supplier of last resort because it’s a transitional phase”

- Oleksandr Kudym.

Electricity Market Hurdles

Data reveals instances where buyers failed to find a supplier for three consecutive months after unsuccessful tenders. Oleksandr Kudym noted:

“When you run a procurement for three months and no one bids, it really highlights the core issues in the market”

- Oleksandr Kudym. This underscores the serious challenges buyers face in today’s electricity market and the urgent need for reform.

As a result, the situation surrounding public electricity procurement demands immediate action, since delays in securing suppliers could have negative consequences for consumers and market stability.

The ongoing procurement crisis highlights the critical need for reform in this sector. The rising number of consumers forced to switch to the supplier of last resort signals a systemic breakdown. Unresolved issues threaten to further destabilize the market, ultimately affecting both the availability and cost of electricity for end users.

The ongoing struggles in securing electricity suppliers are not unique to the consumer market. Similar challenges have been observed in the procurement processes for essential services such as healthcare and municipal utilities. For instance, recent tenders have failed to attract suppliers, leading to significant disruptions. This situation highlights the broader implications of procurement issues across various sectors, emphasizing the need for comprehensive reforms. To learn more about the impact on hospitals and municipal services, read our detailed report on tender failures in public utilities.