Update - Ukraine’s energy sector during war

31 January 2023

Ukraine’s energy security was the topic of an online briefing by DTEK CEO Maxim Timchenko, on Wednesday 25 January. DTEK is the major operator of thermal PPs in Ukraine. It was reported at the briefing, which was conducted in an air raid shelter during a missile attack, that Russia is changing its war tactics: it is now focusing on completely destroying power units. On 14 January, they switched from targeting power plant transformers to targeting the power units. The devastation and destruction means it will be impossible to restore electricity supply with equipment from the Western partners quickly. and it will require greater investment and a longer rebuild. 

 DTEK Group is now under direct attack from the Russian military. As a result of the systematic damage to energy facilities, there is now a significant power deficit in the system of approximately 1.5 GW at night and up to 4.5 GW during the day. On average, six million Ukrainians are deprived of daily electricity supply.

The heaviest price for Ukraine is the loss of life. Since the beginning of the war, 133 of DTEK’s employees have died, 24 are missing, four are in captivity, and 322 have been wounded.

The winter season

At the start of winter, Ukraine had enough reserves of coal and gas in storage. The subsequent damage has led to an urgent situation where DTEK does not now have enough capacity to provide a 24-7 power supply.

Conversely, due to the country's decline in consumption and the increase in gas production by private companies, Ukraine will have the potential to export gas to Europe upon completing the pipelinecurrently being constructed, and still have enough for the winter.

In 2022, DTEK Oil&Gas produced more than two billion cubic metres of gas, keeping private gas production at 2021 levels, and in 2022, it  also managed to keep coal production at pre-war levels.

The main challenge for Ukraine during the current heating season is the ability to supply electricity, but Ukrainian energy companies and the government need to start preparing for the next winter heating season. International partners are helping Ukraine restore its energy system. Unfortunately, only the public sector is financed so far: DTEK has not receive grants or loans. That means it is repairing damaged equipment at its own expense, which will become unviable very soon.

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