UKRAINE’S POWER STRUGGLE 

On a summer evening, the restaurants and cafés of Kyiv’s central Zoloti Vorota (Golden Gates) neighborhood are buzzing, but the sound comes from the generators lined up on the sidewalks of each establishment. Power cuts can last for 12 hours or more, leaving residents rushing to accomplish daily activities and charge devices and power banks while the power is on — and filling the air with fumes and pollution from generators while it’s off. The reason is a relentless Russian campaign over several weeks this spring and summer to destroy Ukraine’s power capacity and infrastructure, building on the years of damage inflicted in late 2022 and early 2023. These attacks have deprived the country of 9 Gigawatts (GW) of generating capacity, representing a third of pre-war capacity, according to BBC reporting citing data from Ukrenergo, the country’s electrical transmission operator. It reports grimly that all of Ukraine’s state thermal power plants have been destroyed, and all its hydropower plants have been damaged to some degree. In one particularly grim act of both terror and ecocide, the Russians blew up the Kakhovka dam, which incorporated the eponymous power station, flooded surrounding communities and natural reserves, caused billions of dollars of damage, and destroyed its electrical output capacity. 

These attacks have a bleak logic from the Russian side. While deliberate attacks on civilian targets such as hospitals – a tactic Putin has lifted directly from his Syria campaign – and power generation infrastructure appear to be in part simple terror bombing to break morale (a strategy with, at best, mixed results in the 80 years since it was first tried in its modern form). They also appear to be a kinetic form of economic warfare: a straightforward attempt to degrade Ukrainian economic viability and warfighting capacity by destroying critical infrastructure that is costly and time-consuming to rebuild. Power generation, in particular, is essential not only to day-to-day economic activity and civilian industry, and thus Ukraine’s bottom line, but also to Ukraine’s burgeoning defense industrial base, no doubt a primary target of the Russian campaign. What the US and its allies are attempting to do to Russia’s revenues and military-industrial complex with sanctions and export controls, Russia is trying to do to Ukraine’s with cruise missiles and attack drones. 

Following the blitz on power infrastructure during the first full winter of the war, technicians from Ukraine’s power company, DTEK, as well as Ukrenergo, embarked on an unprecedented campaign to repair damaged infrastructure. This averted major cuts in both power and heating for industry and homes last winter. Following attacks between mid-March and mid-May, however, the country faces significant rationing of power in the coming months and a bleak winter. Starting with a major attack on 22 March, Russia shifted its targeting from transmission infrastructure, like substations, to power generation facilities themselves, and changed tactics from desultory raids to massed missile and drone barrages against limited target sets to ensure some munitions could get through Ukrainian air defenses.  Analyst Andrian Prokip, writing for the Wilson Center in May, noted that Russia has been ruthlessly effective in the selection of targets and choice of weaponry, ensuring that much of the existing capacity cannot be brought back online. Of the 9 GW taken offline, “only a small share of this can technically be repaired by next winter.” He illustrated the point by noting that all of Ukraine’s 15 nuclear reactors have a combined capacity of around 7.7 GW, less than the amount taken offline earlier this year, while average winter consumption since the beginning of the full-scale invasion in February 2022 has been around 16.5 GW (Reuters cites a peak winter level of around 17.0 GW).

Importing power

Before the war, Ukraine was a net exporter of electricity. Today, Ukraine can access imports, with a technically agreed import capacity of 1.7 GW from EU neighbors.  The electricity grids of Ukraine and Moldova were successfully synchronized with the Continental European Grid (CEG) in March 2022. Notably, on the day of Russia’s initial assault, the country had disconnected from the Russian grid, to which it had always been linked, as an exercise. The full-scale war concentrated a process of disconnecting from Russia and joining the CEG was supposed to take several months into just two weeks, gaining Ukraine crucial security for its grid and access to Central Europe’s electricity markets.

After the attacks earlier this year, the Ukrainian Ministry of Energy began to record daily electricity imports, including from Poland, Romania, Hungary and Slovakia, with imports reaching up to the 1.7 GW limit. Power utility DTEK, which reported losing 90% of its domestic power generation capacity, said at this time that Ukraine could negotiate an increased 2.2 GW limit with the EU. 

But this power comes at a cost. GMK, an industrial association, notes that provisions of Ukraine’s martial law require companies to meet a quota “of at least 80%” of imported power from the EU at a “European price” to avoid wider rationing. For electricity-intensive industries like steel and cement, this drives up the price of goods, undermining competitiveness in both domestic and export markets. It appears the purpose of these regulations is designed to reduce the burden on consumers, although they increase the price of many goods and even threaten jobs. Metinvest, the country’s largest steelmaker, said in recent days that it was considering idling production at Inhulets Iron Ore, one of its largest ore facilities, because of the high cost of electricity, a primary input.

Alternatives

As Ukrainians have shown so often during this war, technological transformation could help the country survive the next year, especially the winter, while distributed technologies like solar are far less vulnerable to Russian attacks. Researchers creating a “suitability map” of the whole of Ukraine for solar power generation found varying levels of suitability, but around 36% of the country had average levels, while nearly 19% had high suitability, with the latter skewing toward the south of the country, which includes areas that are generally harder hit by Russian attacks due to their proximity to the front lines.  

The bottom line is that Ukraine is well-suited for widespread deployment of solar supported by battery technology. Notably, if you ask two experts, you’ll get two different answers regarding the exact state of “net metering” in the country (the ability of solar and other renewable producers to sell excess electricity back to the grid). But it appears parliament is advancing a modern version of the rules this summer. Ukraine’s ability to significantly enhance the share of renewables in total generation should also have a longer-term, positive impact on the economy.

Returning to steel, Ukraine’s largest market for steel products and slabs (for further processing locally) is the EU, where its skilled labor and traditionally cheaper energy made its products particularly competitive. But the EU has promoted the Carbon Border Adjustment Mechanism (CBAM), which puts punitive duties on steel produced with higher carbon methods outside the bloc. Ukrainian steel executives, shareholders and potential external investors have pushed a more than US$60 billion vision of rebuilding Ukraine’s production facilities to utilize low-carbon technologies, like electric arc furnaces, to make “green steel” that crucially uses far less electricity and natural gas. Notably, Ukraine’s iron ore capacity allows it to produce direct reduced iron (DRI), a crucial feedstock for green steel, and a more sustainable grid will further drive down the carbon intensity of the end product. Russia destroyed two of the largest plants in the country, Azovstal and Ilyich Iron & Steel Works, in Mariupol in 2022. Ukraine can show its resilience by rebuilding with green technology, an area where Russia’s sanctions-hit steel industry is likely to be left far behind in the coming years. 

Solar energy has the advantage of being far and away the cheapest and most readily deployable of any power generation source. Second, it lends itself to distributed production, making it more difficult to target in a systematic way. In a political environment where costs both for reconstruction and defensive weapons are an issue, it should be an uncontroversial policy solution along with more efficient use of the available power itself. The US government has promoted high-profile energy products like the construction of a new reactor by Westinghouse at the Khmelnitsky nuclear power plant (NPP) in Western Ukraine. Arguably, in a situation where one Russian strike could take such a multi-year project offline, the US should also be proactively supporting the deployment of sustainable and distributed energy capacity that can address the current crisis.