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Ivan Grygoruk. Ukraine's Energy Sector after the war

Recovery. The first steps

Firstly, this is a new concept of grid development, which should primarily include the construction and development of transmission grids. This applies to the transmission system operator NPC Ukrenergo, it has its own agreed catalog for integration into ENTSO-E, and it is implementing it. Regarding the concept of distribution system operators' networks, we will have to switch to a higher voltage class of 20 kV to reduce technical losses in the distribution of electricity, which will also improve the quality of electricity supply services for consumers. All this should be based on the principles of smart grids, including dispatching, the introduction of smart metering systems and with an emphasis on the development of distributed generation. As a result, over time, additional microgrids and small distribution system operators will appear, which will compete with distribution system operators, i.e. classical power companies, because in some locations they will be more efficient and provide better services than DSOs, which will lead to natural competition.

As for RES, their development is not possible without reliable operation of the basic generation, namely: nuclear power plants, hydroelectric power plants, and PSPs and TPPs as maneuvering capacities for the most efficient balancing and guaranteeing an effective reserve of stability of the power system. Another mandatory measure is the construction of interconnectors, which will provide not only export-import of electricity, but thanks to them we can also receive emergency assistance if there is not enough capacity to be self-balanced within the IPS of Ukraine, so the above measures are crucial to enable the development of RES.

In addition, we must understand that there will be no more chaotic development of renewable energy sources, which has taken place so far. I support the development of renewable energy sources. Indeed, we need to move in this direction. Still, we need to draw conclusions from the past period of RES development in Ukraine and start installing systems of accumulation and regulation of electricity. At the same time, thermal power plants are still irreplaceable, which should still be in the reserve of maneuvering capacities, otherwise restrictions on the issuance of power for RES will be introduced or we will buy expensive emergency services from our Western partners. Also, for the development of RES, it is necessary to introduce regional dispatch centers with their balancing group, necessarily equipped with systems for forecasting electricity generation, which are currently almost not used in the work of RES.

European integration

To restore Ukraine's critical infrastructure in the post-war period, it is crucial to use a unified comprehensive approach with a relevant integration vector of development “Ukraine—EU”— this is the main tool that will help to use the opportunity of the international community's assistance as efficiently as possible.

It is important to understand that today for Europe the global energy crisis threatens to deal a heavy blow to significant parts of its industry and seriously undermine its ability to compete on the world stage. At the same time, the EU has to deal with the consequences of the important stabilization measures that other leading economies are applying in their industrial policies.

This requires the EU to reassess its industrial strategy to position the economy for new growth in the coming decades. Let me remind you that the EU Fit for 55 package and the REPowerEU plan have paved the way for an overall transition to clean energy. But the scale of the actions being taken elsewhere and the huge consequences of the energy crisis in Europe call for a bold new EU industrial strategy.

Therefore, taking into account the above, the main document for international partners and for Ukraine as a reference point should be the National Program of Economic Development of Ukraine in the context of integration into the EU. This document should consist of the resource balance, the concept of industrial development, regional community development programs based on industrial or agricultural specifics, etc. because we must understand that after the war the geography of production capacities and, accordingly, the structure of electricity consumption will change greatly. Therefore, under this development program, it is necessary to develop a new concept for the development of networks that will correspond to the post-war development program of Ukraine and which will be accepted by our international partners, which will also additionally protect the interests of the state of Ukraine and the Ukrainian people, as well as foreign investors.

State stimulation of the industry

The issue is very large, I will focus on the main measures.

First, legal measures are the adaptation of Ukrainian laws and regulations in the energy sector to European ones. The issue of investor protection and the system of guarantees for them at the state level is very important because without this large-scale recovery will be impossible.

Secondly, these are technical measures. We need a unified national vision in the form of a technical policy for the energy sector, which will consist of European standards adapted for Ukraine, providing for the use of new technologies, the latest standard technical solutions and equipment in the construction or reconstruction of critical infrastructure, which must meet high European quality standards to ensure the reliability of the energy system.

Thirdly, these are economic measures related to the reform of the energy market. This is an improved system of mutual settlements between all participants of the energy market in all its segments. This applies to electricity, heat and gas. It is also necessary to resolve the issue of old and new debts and prevent the restoration of the cross-subsidization system.

Fourthly, social measures are among the most important. These are obligations to the household consumer regarding the quality of goods, provision of services and affordable prices for them because after the war the population is unlikely to be able to pay the economically justified cost of electricity, heat or gas.

It should be noted that after the war, it is necessary to restore the infrastructure, which has already suffered enormous destruction, at the expense of the Government and international specialized funds, which are now being created with the help of the international community. After all, we understand that regardless of the form or structure of ownership, the companies themselves simply cannot physically attract such financial investments. This position is crucial because all distribution and transmission networks and the entire electricity industry are the basis of the national economy of the state and without it we should not even think about any development in the future.

Recovery of the energy system and critical infrastructure

Despite the war in Ukraine, there are many professional engineering companies, specialized specialists in the energy sector, the energy industry and significant material and technical potential, but today the state needs to take an enhanced course to preserve and develop human capital for all sectors of the economy, such as training in vocational schools, higher education institutions and mandatory advanced training of specialists. This applies to everyone, especially designers, installation engineers, commissioning engineers, operating engineers, dispatchers, etc., because due to the war, we are already experiencing a shortage of specialists and this deficit, unfortunately, continues its negative growth trend.

In addition, a significant number of specialized foreign companies will be involved in the restoration within the framework of the Marshall Plan, so the restoration of critical infrastructure will depend mainly on the coordination of the Government of Ukraine and international partners. It should be noted that under favorable conditions, the full restoration of all critical infrastructure can take up to twenty years.