New generation: how many gas power plants have been built in Ukraine, and will they make difference?

Ukraine's next heating season promises to be the most challenging in its history. Russian missile attacks have knocked out 9 GW of thermal generation capacity, while strikes on energy infrastructure continue.

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To counter Russia's attempts to weaken Ukraine's energy sector, authorities have set a course to develop a distributed system of small power generation units. Unlike an energy system composed of large facilities, distributed generation cannot be destroyed by massive missile strikes, government leaders believe.

President Volodymyr Zelenskyy announced a goal to build 1 GW of flexible capacity in 2024. To achieve this, the government introduced measures in the summer to incentivize businesses to participate in creating small-scale electricity generation. These include preferential loans, permission to operate without power outages, and simplified conditions for connecting installations to the grid.

How effective have the government's steps towards energy "decentralization" been? Do they motivate businesses to enter the power generation market, and what obstacles remain? What capacity has already been created? How much more can be built before the cold weather sets in, and should we expect a reduction in power outage times?

LIGA.net spoke with market participants and analysts to answer these questions.

What is maneuverable generation and why did Ukraine need it before 2022?

Even before the full-scale war, Ukraine's energy system's weak point was its ability to flexibly adapt to consumption changes. Nuclear power plants, which account for more than 50% of generation, cannot quickly increase and decrease power. This type of generation is called baseload.

The most mobile sources of peak load coverage in the Ukrainian energy system were hydroelectric power plants (HPPs, PSPs). But their resources were insufficient, partly due to climate change. Recent years have been low-water, characterized by low precipitation.