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Ukraine aims to become Europe’s leading green energy hub

Since Russia’s invasion of Ukraine in February 2022, one of the main targets of their military aggression has been Ukraine’s energy sector. Attacks targeting critical power infrastructure have impaired millions of civilians’ access to vital services such as electricity, water and heat – a war crime designed to gradually cause terror among the population.

Written by Andreas Vestre, Senior Business Consultant, Itera

Russia continues to deliberately target attacks on Ukraine’s energy grid, which has so far resulted in a significant loss of the country’s energy capacity: from a total available generation capacity of 37.6 GW in early 2022 to 18.3 GW in April 2023 – a decrease of more than half. Over 50% of thermal power, 30% of solar power and 90% of wind generation have either been disabled or occupied. Gas distribution networks, power grids and substations are continuously repaired by Ukrainian power engineers, many of whom are risking their lives to restore the energy supply to homes, schools, hospitals, and businesses.   

During the war, Ukraine’s total generation capacity has decreased by more than 50%.

Ukraine has for many years worked towards joining Europe’s power grid, decreasing their reliance on Russian energy. The war fast-tracked this process, and less than a month after the invasion, the Ukrainian grid was successfully connected to ENTSO-E (European Network of Transmission System Operators for Electricity) – a year earlier than planned. In June 2022, Ukraine exported its first electricity to the European grid, and has since supplied electricity to several of their neighboring countries. 

A key to Europe’s future energy security is to rebuild Ukraine’s infrastructure with renewable energy. According to Irina Stavchuk, a former Ukraine Deputy Minister and leading expert on climate policies, Ukraine has the largest untapped potential of solar and wind generation in Europe and is perfectly positioned to replace the dependence on Russian oil and gas with renewables.  

With more than 300,000 IT specialists – a number that is growing by about 40,000 per year – Ukraine has long been a digital hub and sought-after country for European business seeking much needed IT competence. With its vast potential within renewables and the international community’s ongoing efforts to rebuild the country after the war, could Ukraine also become a green energy hub for Europe? 

The war’s effects on Ukraine’s energy sector 

The war has had devastating consequences for the energy sector in Ukraine. During the period from October to December 2022 alone, the Russian military fired more than 1,500 missiles and drones at the country’s energy infrastructure. 12 million Ukrainians were left with no or limited electricity and disrupted water supplies and heating systems, at a time with freezing temperatures. According to estimates from Ukrenergo, Ukraine’s national power company, the average Ukrainian household endured five weeks without electricity during the last few months of 2022. 

Devastating impact on power generation

Within a year after the invasion, Ukraine’s ability to produce electricity declined by 61%. About 60% of the country’s power units had either been destroyed, damaged, located under Russian control or were out of operation due to logistical problems. In the transmission network, 42 of 94 crucial high-voltage transformers had been damaged or destroyed. 

 

Ukraine Reduction in generation capacity-2

During the war, Ukraine’s total generation capacity has decreased by more than 50%, with the largest absolute declines for thermal and nuclear power generation. In percentage terms, wind power has faced the biggest blow with more than 90% of the generation capacity either being disabled or occupied. Ukraine’s energy infrastructure remains extremely vulnerable and is still operating in emergency mode without sufficient safety margin for both power grids and generation.    

Ukraine by regions Reduction electricity consumption-2

Ukraine’s green energy transition 

Despite the war, Ukraine is working determinedly towards a green energy transition of the country based on the EU’s Green Deal. With investments of close to USD 400 billion, there are great opportunities to rebuild and develop the country’s energy sector with production capacities multiplying previous levels. Add to this Ukraine’s geographical conditions, ideally suited for solar and wind energy production, and it seems obvious that the country has a vast potential to become a green energy hub.  

Ukraine Potential new capacities and investments-2

A key to Europe’s future energy security is to rebuild Ukraine’s infrastructure with renewable energy

Until 2050, Ukraine plans to increase its annual electricity production to 700 TWh, from today’s levels of just over 100 TWh. Much of the increase will be driven by wind and solar power, with new capacities of around 140 GW and 94 GW respectively. There are also plans to boost production within other renewables such as hydropower, bioenergy and hydrogen, while coal is to be phased out until 2035. Ukraine has the potential to produce 80-95% of the equipment required for wind and solar generation, as well as lithium and graphite for battery production. 

According to the United Nations Economic Commission for Europe (UNECE), “bioenergy, hydro, solar and wind generation could constitute the building blocks of Ukraine’s future energy system, contributing up to nearly 80% of total energy generation by 2050. Provided key strategies and investments are put in place, and complemented by nuclear, renewables could propel Ukraine towards a carbon-neutral future.”          

Ukraine Current and future energy generation mix-1

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Niko Nyström 4

Niko Nyström

Head of Energy in Itera

Andreas Vestre

Andreas Vestre

Senior Business Consultant

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