Krutsyak M. TRANSFORMATION OF ELECTRIC POWER COMPANIES IN THE EUROPEAN INTEGRATION CONDITIONS

The dissertation is devoted to the solution of scientific tasks, which consist in the deepening of theoretical and methodological approaches and scientific and practical recommendations regarding the transformation of electric power companies in the conditions of European integration. The study of the concept of "transformation" provided an opportunity to argue for the expansion of the subject area of research. It is proposed to interpret the transformation of companies as an economic category, which, among other things, reflects the complex process of interaction of the object of transformation with the its environment, which is carried out simultaneously in time and space. The application of a complex and dynamic approach to the assessment of transformation is substantiated. The target functions, limitations and ways of the company's development and its transformation (especially in the conditions of European integration) are also highlighted. The necessity of using qualitative and quantitative indicators of company transformation is proven. Respectively, a complex synthesized methodical approach was developed, which involves a combination of quantitative and qualitative analysis (based on actual data) and quantitative economic and mathematical modeling of the functioning and development of the company (including its environment) in the future with the further application of comparative analysis (before and after the transformation process). The problems of obtaining adequate results of modeling the functioning and development of electric power company are highlighted, as well as proposed and developed appropriate ways to solve them, in particular the following: the use of a complex objective function that would characterize company’s cash flow NPV (including all costs) and would provide an opportunity to evaluate its transformation using a binary economic viability indicator; the use of an improved approach to the formation of a dynamic price offer on the market by electricity producers (taking into account the need to reimburse all costs and obtain a profit); use of dynamic co-optimization (determining the optimum between the provision of ancillary services and the production of heat and/or electricity); the use of the balance sheet method (unbalances endanger the security of supply and leads to failure to perform the basic functions of certain companies on the market); stochastic modeling of companies functioning in a segmented market; the use of penalty functions such as VoRS and VoLL (to ensure the solution of the optimization problem and to introduce marginal prices for goods and services on consumers side). The model of the electricity market adopted in Ukraine is characterized as favorable for the development of competition. At the same time, its key shortcoming is singled out - despite the fact that electricity prices are mostly formed under the influence of competition, this happens under conditions of strict administrative price restrictions. Comprehensively characterized (based on the results of financial and SWOT analysis) a number of studied electric power companies, in particular, their common features, strengths (high level of energy and environmental safety, effective cooperation with international organizations and institutions, low impact on the environment, potential to increase profitability), weaknesses (wear and tear of equipment, import dependence, dependence on regulatory policy), opportunities, threats, and reserves. A machine learning model has been developed for forecasting the demand for reserves and electricity (on different segments of the electricity market with hourly and sub-hourly resolution), the informational basis of which, in particular, is data on the dynamics and profiles of electricity demand by various sectors and forecasts of the economic and social development of Ministry of Economy of Ukraine. Based on the results of modeling the operation and development of electric power companies, negative factors have been identified that serve as prerequisites for their further transformation (from the electricity production cost increase to the simultaneous reserves and electricity shortage increase and the deterioration of the level of security of supply). Recommendations have been developed for the effective transformation of domestic electric power companies (at the same time ensuring the economic viability and security of supply) in the conditions of European integration, in particular the following: 1) step-by-step replacement of worn-out reactors by SE NNEGC "Energoatom" with new SMR-160 reactors; 2) construction of flexible PSHPPs by PrJSC "Ukrhydroenergo"; 3) gradual development of RES and involvement by PrJSC NPC "Ukrenergo" of RES producers in the provision of reserves; construction and operation of battery storages. 4) introduction of a new ancillary service on the domestic electricity market – a strategic reserve (for security of supply).