The memorandum commissions an analysis, not a structure. It creates no new entity, provides for no transfer of assets and does not set the format of future cooperation. Within 15 days, the parties will form a joint working group. Over the following 90 days, the group will analyse possible cooperation models and their economic potential and prepare recommendations. Based on the results, a proposal will be submitted to Lviv City Council, which will take the final decision on the model, its participants and its parameters.
The city treats its own generation primarily as a security expense: backup power for the water utility, the sewerage system and hospitals. These assets sit as separate facilities on the balance sheets of different municipal enterprises. The memorandum asks what the same capacity could deliver for the city if it operated as a single energy portfolio. Backup power for critical infrastructure remains the priority.
The model has a long European track record. Bringing municipal energy and infrastructure together in a professionally managed portfolio – the Stadtwerke model – has worked in Europe for more than a century. All three of Lviv’s German sister cities – Frankfurt, Würzburg and Freiburg – run their municipal infrastructure this way. European municipalities did not adopt it for the sake of the structure itself. They combined energy, heating, water and transport in a single holding company so that municipal energy would stop being only a cost line and start funding services that cannot fund themselves.
“We want to look at municipal energy assets as a single system in which each facility complements the others. This will allow more efficient use of existing capacity and deliver a measurable economic benefit for the city and its enterprises. It is a shift from keeping capacity in reserve to managing it.”
Andriy Moskalenko, First Deputy Mayor of Lviv
As a national operator of distributed generation, ECU brings to the partnership its expertise in forecasting consumption and generation, imbalance management, commercial dispatch and the management of integrated energy portfolios. The goal is to determine how to use existing capacity more effectively, align its operation with consumption and reduce the city’s energy costs.
“In this model, the city becomes a participant in the energy market, not only a consumer: it manages its own assets, forecasts consumption, works with generation and earns an economic return on what has already been built. This experience will also be useful for other Ukrainian cities.”
Kateryna Krasnova, Executive Director, Energy Company of Ukraine (ECU)
About ECU
Joint-Stock Company Energy Company of Ukraine (ECU) is an energy company wholly owned by the state and a national operator of distributed generation. It ensures the integration of new generating capacity into Ukraine’s electricity market.
Its core activities are electricity supply and trading for the country’s strategic enterprises, together with forecasting, balancing, aggregation and commercial dispatch of generation assets. The company’s market infrastructure includes aggregated groups in 19 regions, its own dispatch centre and subsidiaries in Slovakia and Moldova that provide direct access to electricity markets in Central and Eastern Europe.
ECU helps manage energy portfolios more effectively, use the opportunities of distributed generation and improve the economic performance of energy projects.
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