Law 3220-IX:
Complete legal guide for the business of BESS

The market of energy storage systems (Energy Storage) in Ukraine has officially left the "grey zone". Law No. 3220-IX created a new class of market participants — Energy storage facility operator. This article is a complete legal guide for business: from a simple backup to making money from ancillary services.

1. Who is OUSE?

Energy storage facility operator — is a legal entity that owns or operates an energy storage system and is registered in the register of the NCRECP. This is a fundamentally new status in Ukrainian energy law, which differs from generator, supplier and system operator.

The status of OZE allows:

• Buy electricity on RDN/VDR for BESS charging
• Sell ​​electricity during periods of peak prices (arbitrage)
• Provide support services — FCR, aFRR, mFRR (frequency control)
• Participate in the balancing market (BR) as a provider of flexibility

2. Who needs a license?

This is the most common question among business owners. The answer depends on two factors: purpose of use and installed capacity.

* If the BESS is installed on the object of the existing connection and does not increase the total permitted capacity.

3. Procedure for joining networks

If your goal is only backup power or peak shaving on an existing facility, the procedure is as simplified as possible. But if you want to sell services to the network, you need to go through the full cycle.

Scenario A: BESS for own use (no leave)

Scenario B: BESS for Market Participation (BESS)

4. "Active consumer" status

Law 3220-IX introduced the concept "Active consumer" — an enterprise that not only consumes, but also accumulates and can sell excess electricity. It's a simplified alternative to a full EMS for medium-sized businesses.

5. Ancillary services market: How to earn on BESS

Ukrenergo actively purchases frequency regulation services. BESS is an ideal tool for this due to its instantaneous response (milliseconds vs seconds for gas turbines). In 2025, Ukrenergo held tenders for the first time FCR (Frequency Containment Reserve) of BESS participation.

Requirements for BESS to participate in the SOE market

To become a provider of support services, you must fulfill a clear set of requirements:

1. License of NKRECP for energy storage (for power >150 kW).
2. OUSE status — registration in the register of market participants.
3. Ukrenergo certification: checking response time (for FCR — ≤30s, for aFRR — ≤5 min), activation power, stability of operation during a 15-minute test.
4. SCADA/Telemetry: a system of monitoring and data transmission in real time to the dispatch center of Ukrenergo.
5. Contract of OSP (Transmission System Operator) to provide auxiliary services.
6. Minimum power: 1 MW for FCR/aFRR (several objects can be aggregated through the Aggregator).

6. Tax incentives and benefits

The government introduced a number of fiscal incentives to accelerate the development of Energy Storage in Ukraine:

7. Permissive procedure: land and construction

For containerized BESSs (which are the majority of industrial systems), the procedure is simplified:

• Container BESS up to 30 kW: Category CC1 is a declarative principle. It is enough to notify DABI.
• Container BESS 30-150 kW: Category CC2 is a simplified procedure. A construction passport is required.
• BESS >150 kW: Category CC3 — complete project documentation, expertise, construction permit.
• Earth: For BESS on its own territory (on the territory of the plant, shopping center, logistics center) - no additional lead is required. For standalone BESS on a separate site — changing the target designation to "energy".

8. Comparison of the EU: Where is Ukraine and where is it going

The legislative base of Ukraine is approaching European standards, but with some differences:

9. Road map of regulatory changes

Legislation continues to evolve. Here are the key regulatory developments expected:

Frequently Asked Questions

I want to install a BESS 200kw for the plant just as a backup. Do I need a license?

No, a license is not required unless you plan to sell electricity to the grid. BESS for its own needs (backup, peak shaving, tariff optimization) does not require any additional permissions regardless of capacity. You only need to agree to the Oblenergo project regarding relay protection settings. It takes 2-3 weeks.

How much does the license of the NKREC for energy storage cost?

The state fee for issuing a license is a symbolic amount (~17,000 UAH). But the real cost is the preparation of a package of documents: legal support, financial reporting, technical documentation, environmental report. On average, it costs $5,000-15,000, depending on the power of the system and the complexity of the project. The review period is 30-60 working days.

What is BESS "double taxation" and how does it affect payback?

The Challenge & Problem Statement is that BESS pays for electricity when charging (including all transmission and distribution tariffs) and then when discharging, the same energy is again subject to tariffs if sold to the grid. In fact, the same kWh is taxed twice. A bill to eliminate this problem is expected in Q4 2025. Until then, it reduces the ROI of arbitrage by 15-20%, but peak shaving and backup are not affected.

Can my BESS 500 kW participate in the FCR market?

The minimum block for participation in FCR is 1 MW. However, the law provides a mechanism aggregation: several objects (for example, two BESSs of 500 kW each) can be combined through the Aggregator into one virtual unit of 1 MW. Aggregation rules will be approved by the NCRECP in Q2 2025. We recommend planning the system of taking into account the future possibility of aggregation.

What are the risks of investing in BESS from the point of view of changes in legislation?

Regulatory risk in Ukraine exists, but it is mitigated by several factors: (1) Law 3220-IX has already been adopted and is in effect - it is not a project, but a law. (2) The European integration vector guarantees movement towards liberalization, not restrictions. (3) BESS for your own needs does not depend on the regulator at all — you simply optimize your consumption. (4) Even without market revenues, the ROI of peak shaving is 2.5-4 years. The biggest risk is delay: every year without BESS is lost savings.

Is BESS exempt from VAT on importation?

Yes, until December 31, 2027, equipment for Energy Storage (battery modules, inverters, BMS-controllers) is exempt from VAT and import duties. For this, the product must have the appropriate UKTZED code of the list of the CMU. We help clients with the correct classification of goods for customs clearance. Savings — about 20% of the equipment cost.

Conclusions of BESS Ukraine

Legislative field for Energy Storage in Ukraine established and business-friendly. If your goal is energy independence (backup, peak shaving), bureaucracy is minimal: approval of Oblenergo and installation. If the goal is to make money on the market (arbitration, DP), the procedure is more complicated, but transparent and implemented.

Ukraine has competitive advantage before the EU: zero duty and VAT on the import of equipment until 2027 years. This is a window of opportunity that reduces CAPEX by 20% and significantly improves ROI.

"Don't wait for perfect legislation - there is already enough. Only wait for your competitor to install BESS first." — BESS Ukraine team