Why DAM price is not the final electricity cost for businesses
- DAM price accounts for roughly 50–65% of a facility's total energy bill.
- Transmission and distribution tariffs are state-regulated and uniform across suppliers.
- Accurate load forecasting directly reduces imbalance penalty costs.
Media reporting of wholesale Day-Ahead Market (DAM) clearing prices often creates a misconception that it represents the total electricity cost for commercial enterprises.
In reality, the DAM price is merely the wholesale commodity price of electricity. The final invoice for non-household consumers consists of five distinct components:
1. Weighted average commodity price on DAM/IDM or bilateral PPA contracts. 2. NPC Ukrenergo transmission tariff (from 01.08.2026 — UAH 928.45/MWh ex VAT). 3. Relevant DSO distribution tariff (Voltage Class 1 or Class 2). 4. Commercial electricity supplier margin and service fee. 5. Imbalance settlement costs and 20% VAT.
Accurate power budgeting requires modeling all regulated components and optimizing consumption schedules to minimize grid imbalance surcharges.