Ukraine’s Role in the EU’s and Germany’s Energy Transition
This policy brief gives an overview of the current state of the Ukrainian energy system and the challenges that emerged because of the war, but also the chances for the sustainable reconstruction of the energy sector. In order to modernise the economy on a sustainable basis Ukraine needs significant private investments. At the same time, the large-scale reconstruction of the energy sector offers opportunities for German and EU companies to participate in the “green” development of the Ukrainian economy.
Executive Summary:
Ukraine is fighting for victory in the war unleashed by Russia and plans to rebuild the economy on the grounds of stable and sustainable economic growth, a “green” transition, the development of a decarbonised energy sector and economy in the medium term, and the synchronisation of the country’s energy and industrial policy with the European Green Deal within the course of the country’s accession to the EU.
On the way to the decarbonisation of the energy sector, the country must make significant progress in increasing energy efficiency, and developing solar, wind, hydro and sustainable bioenergy. Against the background of the future decommissioning of coal generation and the growing share of power plants on renewable energy sources, the country needs to determine the role of nuclear generation in the national energy mix, provide for the development of new sources of energy system flexibility, and the development of modern digitised electrical networks.
The experience of massive attacks on energy infrastructure and oil refining facilities requires new approaches to the physical protection of energy facilities and finding the optimal balance between centralised and decentralised energy generation.
National natural gas resources should receive an adequate investment inflow to play a leading role in the transition period not only as an energy resource for flexible generation, but also for export. Ukraine should establish itself as a supplier of renewable gases: biomethane already in the near future, „green“ hydrogen, and its derivatives later. The national gas infrastructure needs optimisation to eliminate excess capacity and as a potential means of transportation and storage for a mix of conventional, renewable, and synthetic gases. Ukraine’s critical minerals can potentially play a role in Ukraine’s and EU industrial development.
Ukraine’s energy sector and other economic sectors devastated by the war will require large-scale private investments based on modernisation and „green“ renewal, which will require incentives through institutional, economic and market reforms.
The large-scale reconstruction of the energy sector creates great opportunities for German businesses to take part in the „green“ development of Ukraine’s economy. In particular through the implementation of projects in the energy sector, the creation of joint ventures, the export of equipment, technologies, services and know-how, the import of energy resources, and „green“ electricity and renewable gases. These will contribute to the development of the modern economy of Ukraine and the integration of the energy markets and industrial sectors of Ukraine and the EU.
LibMod_PB_Ukraine_EnergyTransition
This paper was prepared within the project of LibMod and Clean Energy Lab (Kyiv) on Ukraine-Germany energy cooperation supported by the Prague Civil Society Centre. The paper incorporates comments from the workshop which was conducted by LibMod and CEL in Berlin on 28 February 2023 and attended by leading energy-focused think tanks as well as representatives of politics. The results of the discussions among leading stakeholders from industry, civil society, and politics, which were organised in the framework of the project, have also been included in this policy brief.
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