Since 2022, Ukraine has witnessed the rapid development of the energy storage facility (ESF) market, commonly referred to as Battery Energy Storage Systems (BESS). This growth has been driven by the urgent need to enhance the flexibility and resilience of Ukraine’s power system under martial law. As a result, energy storage technologies have been formally recognized under Ukrainian legislation, eliminating the legal uncertainty that had previously surrounded the sector and creating stronger incentives for investors to finance a technology that now enjoys a clearly defined legal status.
Now Ukraine has a comprehensive legislative framework for integrating energy storage facilities (ESFs) into its electricity system.
In 2022, the Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Amendments to Certain Laws of Ukraine Regarding the Development of Energy Storage Systems” № 2046-IX (Draft Law No. 5436-d), which introduced the legal definition of an energy storage facility and formally recognized energy storage activities as a separate activity within the electricity market.
In July 2022, the National Energy and Utilities Regulatory Commission (NEURC) adopted Resolution No. 798 dated 22 July 2022, approving the Licensing Conditions for Carrying Out Commercial Energy Storage Activities.
Under these Licensing Conditions, an energy storage licence was required where the aggregate installed capacity of an operator’s energy storage facilities equalled or exceeded 150 kW, except where the energy storage facility was operated:
Between 2023 and 2025, a number of amendments were also introduced to the Transmission System Code (TSC) and the Distribution System Code (DSC) governing the electricity market. These amendments incorporated energy storage facilities as an integral component of Ukraine’s electricity market framework.
In January 2025, the Ukrainian legislature introduced more flexible rules governing the operation of Battery Energy Storage Systems (BESS) connected to electricity generation facilities through Law No. 9381 “On Amendments to Certain Laws of Ukraine in the Fields of Energy and Heat Supply Regarding the Improvement of Certain Provisions Related to Business Activities and the Application of Martial Law in Ukraine.” Subsequently, in July 2025, the National Energy and Utilities Regulatory Commission (NEURC) adopted a series of regulatory amendments to implement the mechanisms introduced by this Law.
As a result, the principal legislative barriers to the connection, operation, and commercial exploitation of energy storage facilities have now been removed. At the same time, the current challenges facing Ukraine’s power system require rapid and effective measures to strengthen system resilience. In this context, the continued development of distributed generation and the deployment of Battery Energy Storage Systems (BESS) remain among the most important instruments for achieving these objectives. For many years, however, regulatory barriers—particularly burdensome licensing procedures applicable even to relatively small-scale generation facilities—discouraged private investment and hindered the sector’s development.
On 26 May 2026, NEURC adopted the landmark Resolution No. 789, introducing comprehensive amendments to several sets of licensing conditions. In practice, these amendments pave the way for the large-scale deployment of energy storage systems by significantly reducing the administrative burden imposed on operators of hybrid generation facilities. The revised regulatory framework represents an important step toward modernising Ukraine’s energy sector during the ongoing recovery and reconstruction of the national power system.
Increase of the licensing threshold from 150 kW to 5 MW.
The licensing threshold applicable to operators of energy storage facilities has been increased from 150 kW to 5 MW. Accordingly, an energy storage licence is no longer required where the installed capacity of an energy storage facility at a single metering point does not exceed 5 MW. This effectively removes hundreds of medium-scale projects—including industrial behind-the-meter storage systems and smaller grid-support installations—from direct licensing requirements.
Combined generation and storage under a single licence.
The amended framework expressly permits electricity generation and energy storage activities to be carried out at the same facility under a single licence.
Amendments concerning the Guaranteed Buyer’s balancing group.
The composition of the balancing group of the State Enterprise “Guaranteed Buyer” has also been clarified. The balancing group now formally includes not only electricity producers operating under the feed-in tariff (“green tariff”) mechanism but also active consumers.
At the same time, the Guaranteed Buyer has been expressly obliged to purchase electricity generated from renewable energy sources, including electricity supplied from energy storage facilities integrated into such renewable generation assets. This amendment eliminates legal uncertainty regarding whether renewable electricity stored in and subsequently discharged from energy storage facilities continues to qualify for the applicable renewable energy support schemes and incentive tariffs.
The amendments also introduce changes to the information disclosure form concerning the locations and facilities used for carrying out licensed activities (Annex 2 to the Licensing Conditions for Energy Storage Activities). Information on electricity generation facilities must now include details of any energy storage facilities installed at the respective site. Likewise, information submitted in relation to energy storage activities must now identify any electricity generation facilities located at the same site. This enables the Regulator to obtain a comprehensive overview of the technical configuration of each facility without requiring duplicative reporting.
Accordingly, the principal regulatory mechanism governing energy storage activities is shifting away from licensing towards transparent commercial metering and compliance with the technical parameters of grid connection.
The amendments introduced by NEURC Resolution No. 789 reflect a fundamental change in the regulatory approach to determining which market participants are subject to state supervision. By significantly reducing administrative burdens in the energy storage sector, the new framework streamlines regulatory oversight while making the sector considerably more attractive for private investment.
From a business perspective, the revised licensing regime delivers tangible practical benefits. In particular, it enables market participants to reduce both the time and costs associated with preparing licence application documents and eliminates lengthy waiting periods for regulatory approval.
The increase of the licensing threshold to 5 MW allows companies to implement energy storage projects significantly faster. Furthermore, the possibility of operating generation and energy storage activities under a single licence—for example, by adding an energy storage facility to an existing electricity generation licence—simplifies operational management and reduces administrative complexity.
Businesses should, however, pay particular attention to the updated requirements applicable to grid connection schemes. Such schemes must now clearly identify the commercial metering equipment associated with energy storage facilities and must be approved by the relevant Transmission System Operator (TSO) or Distribution System Operator (DSO). At the same time, system operators have been granted greater discretion over the implementation of energy storage projects through their authority to approve the technical connection scheme.
From the perspective of the electricity system as a whole, the simplification of the licensing framework for energy storage facilities is expected to accelerate the development of distributed generation by encouraging the deployment of additional energy storage capacity. This, in turn, will facilitate peak-load management, enhance system flexibility, and improve the integration of renewable energy sources, whose electricity generation is inherently intermittent and variable.
At the same time, certain legal and regulatory risks associated with the operation of energy storage facilities (ESFs) remain and deserve particular attention. Among the most significant are the following:
These issues require further refinement through continued regulatory development involving industry experts, legal practitioners, and business representatives to ensure an effective and balanced legal framework governing energy storage activities.
Energy storage facilities constitute a key element in making distributed (decentralised) generation in Ukraine both efficient and reliable. They effectively serve as a buffer that addresses the principal challenge inherent in decentralised energy sources—their dependence on weather conditions and consumption patterns.
The principal links between energy storage facilities and the development of distributed generation in Ukraine include:
Accordingly, the role of energy storage facilities in strengthening the energy resilience of Ukrainian communities and businesses will continue to expand following the energy market deregulation introduced by NEURC Resolution No. 789 in 2026. These regulatory changes are intended to facilitate the implementation of the Government’s Distributed Generation Development Strategy through 2035.
Ukraine has already launched a dedicated economic dispatch platform for energy storage facilities, which is currently being actively tested by more than 180 companies that have either deployed or intend to deploy energy storage systems. In parallel, local authorities have introduced financial support programmes under which businesses and households may receive compensation of up to UAH 2 million for the installation of hybrid energy systems combining electricity generation with battery energy storage.