PAIH’s industry consultations: Ukraine’s energy sector

02 December 2022
Another Webinar was held as part of cooperation with Polish business to prepare for the resumption of export to and post-war reconstruction of Ukraine. The theme of the event was the Ukrainian energy sector – challenges related to the removal of war damage, prospects for modernization of the system and what Polish companies and institutions can offer. The event was inaugurated with speeches by representatives of the Polish Investment and Trade Agency and the Ministry of Development and Technology.

PAIH's industry consultations: Ukraine's energy sector

The Ukrainian government has restored business relations as we had before the war. We are working on a law that will enable the strengthening of Poland's insurance of economic exchange with Ukraine - said Tomasz Salomon from the Department of Trade and International Cooperation of the Ministry of Development and Technology of the Republic of Poland.

PAIH's Board Member Zdzisław Sokal stressed that energy is one of the key issues for the functioning of Ukraine, and efficient cooperation and financing instruments are needed for the reconstruction of their energy infrastructure, which need to also come from national and international institutions. He also reminded that the Agency's (PAIH) team of experts advise companies.

Today we are meeting to talk about how to support Ukraine and thus enable it to defend itself effectively, but also about what our cooperation will look like when the war is over - said Zdzisław Sokal.

Oleg Pavlenko, Investment Director of NEK Ukrenergo, raised the topic of the current state of the energy system, its destruction and needs. He reported a shortage of power in much of the country due to attacks on the energy infrastructure. He added, however, that thanks to Ukrenergo's efforts, it is possible to restore the operation of part of the infrastructure, but despite this, it is necessary to reduce energy consumption. He stressed that Ukraine's domestic resources, which are needed to repair the network are running out. At the same time, he asked for help primarily in the form of equipment, including transformers. He also added that he hopes that after the victory, Ukraine's energy transformation will continue in order to reduce its carbon footprint.

The problem of lack of energy concerns primarily large cities that are operating at the limits of the systems efficiency. The wave of refugees caused by the humanitarian crisis will be huge and will cost billions. Equipment for the reconstruction of the energy system will be a much smaller burden - he said.

Oleksiy Povolotsky, Director of Corporate Management and Compliance at DTEK, reported that as a result of last week's shelling, some cities were deprived of energy, heat and communication for up to several dozen hours. Energy supplies are being restored, but temporary shutdowns must be used to balance consumption. He stressed that one of the difficulties is the significant participation of Soviet devices, in the energy infrastructure which are incompatible with European standards.

The situation in the renewable energy industry was discussed by Kateryna Polyakova, Director of the European-Ukrainian Energy Agency Association. She stressed that the goal after the end of the war is to adapt the standards of Ukraine's energy system to European requirements and to increase energy exports to the EU.

Our mission is to develop green energy. Currently, our RES capacity is 2.7GW. From 2016 to 2020, we could see a significant 8-fold increase in renewable capacity. Due to damage caused by attacks, production from renewable energy has decreased by 50%. However, in some stations, it was possible to regain control and restore energy production - she said.

The first part of the meeting was closed by Oleksandr Laktionov from the Ukraine Energy Charter Secretariat, presenting the situation in Ukraine's oil and gas sector. He stressed that the damage to gas storage facilities is not significant because the storage facilities are located deep underground. He added that a significant part of the storage facilities are located near the border with Poland and they have not been damaged, but more than 200km of gas pipelines have been damaged as a result of Russian attacks. A significant part of the oil transmission infrastructure has also been damaged.

Ukraine has some of the largest gas reserves in Europe. When hostilities began in February, some of the drilling was stopped. About 15% of gas resources are in the occupied territories - he informed.

Laktionov also added that more than 10% of the country's oil reserves are located in the occupied territories, and therefore production in the vicinity of the occupied territories has been significantly reduced due to the risk of attacks.

In the second part of the meeting, the discussion concerned aid projects and the potential of Polish business to support the reconstruction of the energy sector in Ukraine. The participants learned, among other things, of the support tools offered by KUKE and BGK. The representative of PKN Orlen spoke about their experience in cooperation with the Ukrainian market.

Photo gallery: