LIBERALIZATION OF THE ELECTRICITY MARKET IN UKRAINE: LEGAL FRAMEWORK, ECONOMIC CHANGES AND INNOVATION CHALLENGES

Abstract

The article is devoted to a comprehensive analysis of the processes of liberalization of the electricity market in Ukraine in the context of the transformation of the energy sector, legal reforms, economic modernization and innovation challenges caused by the European integration course of the state. The work substantiates that electricity, despite its physical characteristics, has the legal nature of a commodity capable of acting as an object of civil law relations. Special attention is paid to the historical stages of the formation of the Ukrainian electricity market. The structure of the new market system is determined, which includes the market of bilateral contracts, the day-ahead market, intraday and balancing markets, as well as the segment of ancillary services. The study revealed that the legal and economic mechanisms of the functioning of the electricity market are closely interconnected with institutional factors. Considerable attention is paid to the analysis of innovation challenges and barriers to the development of the energy business. It is established that the main restraining factors of innovative activity are the high capital intensity of the industry, limited access to investments, imperfect regulatory framework, shortage of qualified personnel and low level of scientific and research interaction between enterprises and academic institutions. The author emphasizes that in order to increase the efficiency of innovative activity it is necessary to form partnerships with universities, ensure stable funding of research and implement organizational and marketing innovations. An important result of the liberalization of the electricity market was the strengthening of Ukraine's European integration in the energy dimension. It is substantiated that the synergy of legal, economic and technological reforms is a necessary condition for the sustainable development of the Ukrainian energy market. It is concluded that the current stage of development of the energy sector of Ukraine is characterized by a combination of liberalization and European integration processes with internal structural changes. Electricity is increasingly emerging as a strategic commodity with a dual nature - economic and security. Its effective market circulation requires a balance between the interests of the state, business, and consumers, and further integration with the EU creates the potential to increase the competitiveness and innovativeness of the national economy.