How green energy can become the basis of Ukraine's energy sustainability

The destruction of traditional energy infrastructure as a result of Russian aggression has significantly accelerated the development of Ukrainian renewable energy. Over the next 15 years, the share of green energy in Ukraine's energy mix may become even higher than in many EU countries. According to Boston Consulting Group experts, the share of renewables will increase from 15% in 2022 to 28% in 2040.

During the sectoral conference “Green Energy for Recovery” organized by the We Build Ukraine think tank in partnership with the Ukraine Facility Platform, three key areas were discussed: solar energy, wind energy, and biofuels. The focus was on creating transparent rules for investors, localizing production, supporting government policy, and integrating into the European energy market.

More than 100 market representatives, specialized associations, international financial institutions and global energy players focused on the following issues:

🔹 Wind energy - opportunities for scaling up projects despite risks, access to financing and tax exemption for import of wind turbines, synchronization with the European market

Solar energy - overcoming barriers to the development of new solar power plants, localization of component production, grid integration, PPA reform, and stability of the distributed generation system.

🔹 Bioenergy - potential of the agricultural sector in providing raw materials, development of agricultural clusters, investments in local heat and electricity systems, access to the European market and fairness of the quota system

Oleksandr Kubrakov, Chairman of the Supervisory Board of We Build Ukraine, emphasized that green energy is one of the few sectors of the economy that demonstrates growth even during a full-scale war. Despite the challenges, both Ukrainian companies and international partners, including the EBRD and IFC, are investing in it.

Experts of the We Build Ukraine think tank, together with the international company Boston Consulting Group, have developed the Economic Growth Strategy of Ukraine until 2040, which identifies the green energy sector as one of the eight priorities for reform to increase the country's GDP. According to Oleksandr Kubrakov, each sector can systematically work on 5-7 problems, the solution of which will lead to significant changes, but does not require extraordinary efforts.

“Half of these solutions can be implemented today - they do not require changes to legislation, only government decisions. It will take 3-5 months of work, and we will get an effect that will allow the industry to develop more efficiently,” Kubrakov said.

He emphasized that the inhibiting factors are often not laws, but technical barriers, regulation, or untimely decisions of state-owned companies, such as connecting new wind farms to the grid. Overcoming such problems in partnership with the government and the market will allow Ukraine to become a strong competitive player on the continent.

BCG Senior Expert Balint Silhavi predicts that Ukraine's energy sector will become more decentralized and less dependent on coal over the next 15 years. It is expected that:

✅The share of carbon-free energy will reach 60%;

✅The role of renewables and biomass will increase;

Coal will be gradually replaced by gas, renewables and nuclear power.

Silhavi is also convinced that Ukraine has a chance to become a center for the production of low-carbon energy equipment, which will stimulate economic growth and strengthen energy security. He predicts active attraction of foreign direct investment and private sector participation in modernization through a liberalized market.

“Investments in new technologies and renewable energy can open up capital inflows to the country. Given the difficulties Ukraine is facing, it may not be easy, but it is a chance to attract additional capital,” he said.

According to BCG's forecasts, in 2040, total energy consumption in Ukraine will return to the level of 2021 - now there is a decrease in consumption, but in the coming years it will gradually increase. Similar trends are currently evident in the EU, where coal consumption is also falling. Renewable energy sources - from the sun and wind - will grow in the world

“There is a gradual process of decarbonization, and this is also true for Ukraine. Moreover, energy consumption in Ukraine is likely to be even greener than in Europe due to the combination of renewables and nuclear power,” Balint Silhavi summarized.