Ukraine's energy sector has undergone significant transformation. Despite massive attacks and occupation, the system continues to operate thanks to the implementation of distributed generation. Previously, energy was centered around large facilities, but now a network of smaller power plants is being developed across the country.
Since the beginning of the full-scale war, Ukraine has lost a significant portion of its large capacities — facilities totaling about 18 GW were damaged or occupied, hydro and thermal generation was targeted. At the same time, businesses and municipalities are actively investing in the installation of solar panels, cogeneration units, and gas generators with capacities up to 20 MW, which are faster to restore and harder to destroy.
Since 2019, a free electricity market has operated in Ukraine, increasing incentives for own generation. Companies can choose their supplier and sell surplus electricity, making investment economically viable. With state support, several hundred MW of new small capacities are expected by the end of 2024, despite delays due to bureaucracy and equipment shortages.
The Ukrainian government has adopted a strategy for the development of distributed generation until 2035, which provides for energy planning at the community level. The European experience shows that this share can reach up to 50% of electricity production, as in Denmark.
Challenges include complex connection procedures, equipment shortages, and market debts. Advantages are high resilience and quick system recovery, reduced risk of targeted attacks, and economic appeal due to declining technology costs.
In the future, distributed generation and market diversification should become the basis for Ukraine's energy security.
