State regulation of the energy sector considering its investment needs

Introduction. State regulation of the energy sector is a key factor in ensuring its effective functioning. The main focus of state regulation should be to increase energy production, ensure fair pricing of energy resources in the domestic market, and reduce costs per unit of converted, distributed, and used energy. Problem Statement. Under martial law, a difficult situation in the energy system of Ukraine and the lack of its own resources for the restoration of damage by energy companies, the issue of attracting investment resources from both national and international investors is gaining special importance. One of the key factors that affects not only the return on investment, but also the willingness of investors to invest is the state regulation of the energy market, which ensures the protection of the interests of investors. Purpose. To research into the issues of state regulation and development of the energy sector, taking into account its investment needs. Methods. In the research process, a comprehensive approach was used, including the comparison method, content analysis, statistical method, tabular method, and theoretical generalization method. Results. Based on the analysis of the cause-and-effect relationships between macroeconomic indicators of the energy sector, several main factors were identified that affect both the direct effect of investments, which consists of budget revenues from the energy sector, and the indirect effect, which manifests itself through the impact of energy on other industries and sectors of the country’s economy. These factors include the dynamics of energy capacity development; domestic energy needs; demand and prices on the European energy market; volume of energy generation; level of generation costs; sales volumes on the domestic and European markets; level of energy revenues of the Ukrainian budget. Conclusions. The following problems of state regulation of the energy sector have been identified, which negatively affect its development and the level of investment attraction: increasing costs for the transformation, distribution and use of energy resources; the presence of cross-subsidization of the population; an opaque mechanism for forming electricity prices; growing tax pressure on energy enterprises; the existing state monopoly on nuclear generation and hydro generation, etc.