*Based on the UNDP and the World Bank assessments, and independent research
Ukrainian Energy sector before the war
Before the Russian aggression, Ukraine had a highly developed physical and social infrastructure. The energy sector played a key role in Ukraine’s economic architecture. The energy supply represented 17 percent of the country’s GDP. One hundred percent of the population had access to electricity, and 95 percent had clean cooking fuel. Central heating had high penetration (ca. 47 percent), particularly in the bigger cities. The gas distribution network covered 74 percent of the population and nearly 90 percent had clean running water thanks to developed pumped water distribution systems.
Russian attacks on the Ukrainian energy sector
Russia targeted attacks on Ukrainian energy infrastructure have caused extensive damage across the country. Since February 2022, the Government of Ukraine and independent experts’ estimates refer to more than 5000 missiles and drones, as well as shelling and grenades, targeting the infrastructure of Ukraine. Out of them, hundreds of missiles and drones are estimated to have hit large energy facilities.
As a result, the generating capacity has been reduced by 61 percent as the available capacity of Ukrainian power plants dropped from 36 GW to 13.9 GW. About 10 GW of installed capacity remains in the territories under the temporary control of the Russian military and is not delivering to the grid (including a 6 GW Zaporizhzhia nuclear power plant).
Russia severely harmed the Ukrainian electricity transmission system. 41 out of the 94 substations in the territory controlled by Ukraine (43 percent) were hit or destroyed by missile and drone strikes. Damage to power transmission networks significantly limits the ability to supply electricity to consumers, even with sufficient generation. Russia has destroyed almost the entire 750 kV high-voltage power grid used for power delivery from the Zaporizhzhia NPP in areas under its control.
The gas sector infrastructure has suffered significant damage. The main gas pipelines with a total length of 27 km and about 20 km of branch gas pipelines have been damaged or destroyed. Three compressor stations were damaged or destroyed and 175 gas distribution stations were disconnected. A total of 23 GRS were damaged and disconnected.
A large part of the district heating infrastructure in war-affected areas is damaged beyond recovery. In addition, a large number of CHPs have been targeted, putting at risk district heating in multiple cities. As for the coal and mining sector, approximately a quarter of Ukrainian mines are located in territory currently under the control of the Russian military.
Russian attacks lead to severe electricity restrictions being applied throughout Ukraine for industry and household consumers. Critical infrastructure facilities have been repeatedly left without power due to the outages. The drop in electricity generation in Ukraine y-o-y constituted over 30 percent.
The damages to the energy infrastructure and the loss of access to the assets located in the territories under the temporary control of Russian forces have led to severe energy supply disruptions.
Continuous and regular waves of attacks on energy infrastructure have left 12 million households across Ukraine with no or limited electricity, disrupting internet communications as well as water supplies and heating systems in the winter time, when temperatures had fallen below zero in most parts of the country. The average Ukrainian household had to endure five cumulative weeks without electricity.
The attacks negatively affected the operational viability of the telecommunication, banking, and service sectors and contributed to economic hardships in the country.
At the beginning of 2022, there were 75 units of thermal power plants and CHPP in Ukraine. Some units were disconnected from the IES. The total available heat generation capacity was 15.8 GW. As of early December 2022, the operating capacity of TPPs that are connected or can be connected to the IES fell to about 4.5 GW or 26 percent of the level at the beginning of 2022. It’s an almost three-fold decline in available heat generation.
Summary of Damage to the Ukrainian Energy System
As of the end of February 2023, the total direct damage to the Ukrainian Energy System is estimated by the World Bank at over $10 billion. The largest share of damage is in the power sector (close to $6.5 billion). Within the power sector, the largest contributor to damage is the generation segment ($3.9 billion) followed by the transmission segment (about $1.9 billion). Damage to the power distribution sector is estimated at about $404 million (without including assets in territories temporarily not under Ukraine’s control).
The gas sector damage estimates are at around $1.2 billion. This comprises damage to gas distribution infrastructure as well as damage reported by the gas transmission system operator.
Damage to the oil sector, including oil refinery facilities, fuel depots, and fuel stations, is estimated at close to $1.7 billion. Damage to the coal and mining sector could not be precisely estimated because there is a lack of information from the mines located in territories temporarily not under Ukraine’s control.
While direct losses to the IPS are close to $10 billion, the estimated war-related revenue losses in the power, gas production, gas transit, coal mining, and fuel oil sectors exceed $27 billion. The financing needed for its renewal is estimated by the World Bank at nearly $47 billion.
Preparation efforts for the 2023/24 winter season need to primarily focus on restoring access to electricity supply for millions of Ukrainians as well as critical social infrastructure, including heating, potable water, wastewater treatment, and communication. Among the many needs, two critical areas for interventions are high voltage transmission equipment and reserve additional generation capacity for the most vulnerable cities.