Energy Day: Current status and development of Ukraine’s energy sector
On 12 June, the European Business Association held its annual Energy Day, bringing together representatives of business, government, experts, and international partners to assess current challenges and prospects for the development of Ukraine’s energy sector.
Svitlana Mykhailovska, Deputy Director of the European Business Association, emphasised the key role of energy for both society and the economy, underlining the need to focus on short- and medium-term measures, as well as on strengthening government support for businesses amid ongoing infrastructure attacks.
Yulia Kyyan, Director of the Directorate for Strategic Planning and European Integration at the Ministry of Energy of Ukraine, noted that the energy sector remains a target of Russian attacks but has shown high adaptability. She stressed the importance of cooperation between the state, business, and international partners to ensure stability and future planning.
Robert Kirchner, Head of the Energy and Climate Team at Berlin Economics, emphasized that Ukraine’s energy resilience is not only a matter of security but also an opportunity for innovation, sustainable development, and integration into the European market. He expressed confidence in the potential of green transformation for both Ukraine and the EU.
Energy Infrastructure and Policy Priorities
Ukraine’s energy infrastructure has suffered systematic attacks since October 2022, leading to major damage to generation facilities and critical infrastructure. Despite this, over 50% of the lost capacity was restored in 2024. A new challenge has emerged — gas security: following the cessation of Russian gas transit, attacks on gas storage facilities have increased, complicating preparations for the heating season.
Ukraine continues to implement its energy strategy aimed at increasing the share of renewables. However, the war has taken a toll on the green energy sector, with many facilities destroyed or occupied. In the short term, the country is returning to coal generation while simultaneously developing solar, wind, and geothermal energy to build a decentralised system.
The Ministry of Energy has introduced several effective stabilisation mechanisms:
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A humanitarian hub for generation assistance: over 24,000 tonnes of equipment (autotransformers, cables, couplings) were delivered with donor coordination and simplified legislation.
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An Energy Support Fund created jointly with the European Commission: €1.1 billion has been accumulated with transparent procedures and tenders managed by independent agents.
The key energy policy priorities for 2025 include: restoring and protecting critical infrastructure, accumulating gas reserves, and rebuilding damaged gas infrastructure. In parallel, the government is betting on decentralised generation and further energy market liberalisation and European integration.
Oleksii Brekht, Acting Chairman of the Board at Ukrenergo, expressed his gratitude to energy workers for their resilience during the war and emphasised the effective cooperation with international partners in restoring and strengthening the power system. He noted that the state of the energy system in the summer of 2025 is under control — generation is capable of meeting domestic consumption, while electricity imports and exports are conducted on commercial terms. The main focus lies on the development of renewable energy sources and flexible generation, as well as preparing for the winter season, which includes restoring damaged facilities, protecting infrastructure, and increasing interconnector capacity with EU countries.
Oleksiy Zayets, CEO, Member of the Board of Directors at Smart Energy Group, highlighted that despite heavy shelling and a difficult winter in 2024/25, the company resumed gas production at 60–65k m3/day and is ready to ramp up to 750k m3/day if regulatory constraints are lifted.
“Private business only needs security, stability, and the ability to operate — we will handle the rest.”
He also thanked the energy sector for ensuring a stable power supply, which made it possible to maintain gas production under wartime conditions.
Berlin Economics Study: “The Potential for Green Value Chains Manufacturing Localization in Ukraine”
Ukraine has the potential to become a key partner in European green technology value chains in light of domestic deployment targets and export ambitions, especially to the EU.
- Wind Turbines: The most promising sector for manufacturing localization and can be cost competitive vis-à-vis EU, especially in the production of towers and blades due to the availability of domestic input materials (steel, cement) and low labor costs. Some ancillary equipment, such as generators and converters, are already manufactured in Ukraine and can be ramped up. These could provide significant contributions in terms of jobs, economic benefits and stimulate other industry demand.
- Solar PVs: Ukraine is unlikely to be cost-competitive with Chinese or South-East Asian solar PV modules, but neither is the EU or US. However, module assembly exists and can be ramped up, along with ancillary equipment manufacturing (e.g. inverters, steel frames), to meet domestic and export demand.
- Li-ion Batteries: Ukraine has lithium deposits, but outlook is uncertain due to low global market share, unclear production costs, long lead times, and very high capital investment needs in an environment of high risks and thus capital costs. Local battery cell manufacturing prerequisites do not exist in Ukraine, but focusing on assembling batteries for energy storage, domestic EVs and public transport could scale up the sector, with niche applications such as defense-related batteries could serve as a potential avenue.
There are several reasons to invest in the localization of green technologies in Ukraine:
- А sharp increase in domestic demand is expected by 2030 — with 18 GW of new capacity planned, including 12 GW from solar and 6 GW from wind energy.
- Green technology manufacturing would build on Ukraine’s industrial strength and help diversify the economy and drive economic growth. Ukraine offers a combination of affordable and skilled labor, access to raw materials, and a strong IT sector.
- The country’s favorable geographic location — close to Central and Eastern European markets—helps minimize logistics costs and ensures efficient export potential.
- Ukraine strives to become a EU member, joining eventually a common market of around 450 m people, which is a key consideration in every investment decision.
Vladyslav Shevchenko, Commercial and Marketing Officer of Helios Strategy, emphasised that solar energy is not just about megawatts and savings — it’s about turning energy into a development resource. Today, we are building generation capacity, but we don’t always have an economy that can absorb it. Local surpluses without local demand lead to technical instability and inefficiency.
That’s why it’s important to shift the approach — not only to think about where to build, but also who and how will consume. Only a combination of generation, storage, and consumption-driven economy will turn energy into a driver of industrial growth.
Aron Kerpel-Fronius, Energy Advisor at the EU Delegation to Ukraine, stressed the importance of strategic planning and international integration. Market liberalisation, an independent regulator, and EU market coupling by 2027 are essential for investment.
Mariia Malaia, First Deputy Head of the State Agency on Energy Efficiency and Energy Saving of Ukraine, stressed that today, energy efficiency and the development of renewable energy are not just global trends — they are strategic issues of national security and survival. The full-scale war has fundamentally changed the approach to energy policy formation. It has forced Ukraine to reconsider principles of energy sector management, accelerate the integration of clean technologies, and implement sustainable solutions.
Viktoriia Pysmenna, Chief Legal Counsel at Elementum Energy, noted that market-based electricity sales mechanisms remain a priority. However, there are challenges: the absence of war risk insurance, complicated logistics, and regulatory barriers such as price caps and restrictions on sales volumes.
Yevhen Lapchenko, Head of Regulatory Relations at DTEK Renewable Energy, highlighted the company’s investments in 1.1 GW of solar and wind energy, as well as the construction of energy storage facilities with a total capacity of 200 MW. Key challenges include military risks, a debt crisis amounting to UAH 21 billion, and the lack of guaranteed offtake for electricity. Proposed solutions include resolving the debt issue, introducing green auctions, creating a fund with the EBRD, and ensuring market coupling with the EU.
Denys Kostiuk, Head of Business Development at Naftogaz, presented the group’s decarbonisation strategy, which includes 34 MW of solar capacity, 450 MW of wind projects by 2030, up to 300 MW of cogeneration, and the development of biomethane. The strategy is expected to be made public in the first quarter of 2026.
Andrii Herus, Head of the Verkhovna Rada Committee on Energy and Housing and Communal Services, emphasised that while the legal framework for the energy sector is largely in place, problems persist at the implementation and regulatory decision-making levels. The return of VAT and market liberalisation remain key issues.
The European Business Association extends its gratitude to Berlin Economics, DTEK, Helios Strategia, and all government and corporate participants for their contributions to the discussion.
