Managing load shedding in Ukraine: rationing rules, exemptions and price caps

Ukraine’s power infrastructure has been a primary target of Russian attacks since the start of the full-scale invasion in February 2022. Since early 2024, generation capacity has regularly fallen short of domestic demand, requiring load shedding to maintain system stability. Ukraine manages these shortages through a sophisticated system of pre-announced Hourly Outage Schedules (HOS), alongside outage exemptions and regulated electricity prices. This paper has two components. First, we describe the regulatory framework governing HOS, including load blocks, queues, sub-queues, exemptions, and household price regulation, and discuss the complexity and trade-offs of the current approach. Second, we quantitatively assess a short-run residential demand-response proposal under which consumption up to 80% of a household’s 2021 monthly consumption remains at the regulated tariff, while consumption above this threshold is priced at approximately the unregulated retail price. Using an hourly power-system dispatch model for October 2026–April 2027, we test the effects of alternative assumptions about the current share of residential demand that responds, the price elasticity of demand, and the timing of demand reduction. The simulations show that residential demand response can materially reduce load shedding under stressed system conditions, but that its mitigation potential depends strongly on when demand is reduced. We therefore present the block tariff as a pragmatic near-term complement to, rather than a substitute for, system restoration, additional supply, imports, storage, and longer-term improvements in retail price signals.