Ukraine’s Role in the EU’s and Germany’s Energy Transition

Foto: Imago

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.

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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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