Ukraine’s largest energy firm is asking the European Union to invest in the war-torn country’s energy security, with smaller, less centralized green power facilities emerging as a key part of the effort to protect the system from Russian bombardment.
But the investment risk has left builders without access to capital for the new projects the country desperately needs, Maksym Timchenko, CEO of Ukraine’s largest private energy company DTEK, told Politico.
Ukraine’s energy sector has sustained US$12 billion in damage since the Russian invasion began in 2022, Politico says. Attacks on energy infrastructure have increased since March, causing hours of blackouts across the eastern Kharkiv region. DTEK recently announced it had lost 80% of its generation capacity, with five of its six coal-fired power plants “seriously damaged.”
But if Ukraine’s energy production were spread out—across hundreds of wind turbines, for instance—the utility wouldn’t have to “concentrate large amounts of power generation in one place,” Timchenko said. A more distributed network of solar and wind energy sites would make it harder for Russia to knock out large amounts of power in a single strike.
Already, attacks on major energy sources like the Zaporizhzhia nuclear power plant and the Kakhovka Dam have had severe impacts, Euronews.green reported in February.
“What we can learn from that,” said Anna Ackermann, a climate and energy expert at Ukrainian NGO Ecoaction, “is that any big centralized energy infrastructure is highly vulnerable because it’s very easy to get information of where it is.”
But Timchenko’s vision for decentralizing power generation needs capital and insurance. “Unfortunately, we are not in a position to build big solar or wind farms because of this,” he said, adding that “all the rest is in place” for the firm to start investing.
The EU should immediately contribute cash to rebuild DTEK’s energy infrastructure, and Brussels should send electrical equipment, Timchenko said.
His pleas came as aid from the United States was blocked by congressional Republicans.
“I appeal to institutions like the European Bank for Reconstruction and Development, European Investment Bank… so that they will start helping us” with accessing capital and de-risking guarantees, Timchenko said, adding that more green projects would have wider benefits. “It’s not only for our own consumption but also for exporting to Europe—and I think that renewables in Ukraine help the European Union to accelerate [its own] green transition.”
President Volodymyr Zelenskyy has also said he wants Ukraine to be a “green energy hub” for Europe, reports Euronews.green.
Meanwhile, the European Commission is preparing to sanction Russia’s liquefied natural gas (LNG) industry, Politico reports.
Sanctions on prominent Russian individuals and various sectors of the economy have been put in place since the start of the war. While they “inflicted fairly minor damage,” they have worked to erode the profitability and international political clout of Russia’s government- controlled gas company, Gazprom, writes Eric Reguly in a Globe and Mail opinion piece.
Now, similar actions are targeting LNG. The sanction would not affect LNG imports into the EU, but would stop EU countries from re-exporting Russian gas after importing it, and ban EU involvement in upcoming LNG projects in Russia.
The proposal argues that “such a measure limits the expansion of Russia’s LNG capacity and thereby limits Russia’s revenues,” though the penalties would only affect a fraction of Russia’s total fossil fuel income, Politico says.
Still, the EU’s measures to shift away from Russian energy have cut into its use of Russian LNG, which accounted for just 5% of EU energy consumption last year. The proposed sanction would also force Russia to change its LNG business model, which involves shipping LNG to Asia via hubs in European countries like Spain, Belgium, and France. Under the proposed rules, Russia would have to ship its product through the Arctic Sea instead, requiring icebreakers that are in limited supply.
“If they can’t transship in Europe, they might have to take their ice-class tankers on longer journeys,” said Laura Page, an LNG analyst at Kpler Insight.
