Ukraine’s Power Crisis: No Missiles For Defense, No Money In The Bank

Since March, Ukraine has lost half of its remaining power generation capacity due to ongoing Russian strikes, leaving the country with severe energy deficits. Volodymyr Kudrytskyi, CEO of Ukrenergo, revealed the grim reality during a recent panel discussion, where the dire situation was underscored by frequent blackouts. With winter approaching and no immediate solutions in sight, Ukraine faces a daunting challenge to restore power amidst war, inadequate funding, and a desperate need for air defense. The future of Ukraine’s energy grid hangs in the balance, raising urgent questions about survival and resilience.

Ukraine has lost half of its remaining power-producing capacity since March of this year, according to Volodymyr Kudrytskyi, CEO of Ukrenergo, the country’s state-owned transmission company.

“Nine gigawatts (GW) is a huge number,” Kudrytskyi stated during a discussion panel held by Ukraine Business News (UBN) Network on Friday, June 21.

If Kudrytskyi’s calculations are correct, Ukraine had only about 18 GW remaining in the system before the repeated Russian strikes this year, which is less than a third of the pre-war 56 GW.

And everyone who attended the UBN event felt the energy shortfall since it was repeatedly stopped due to Ukraine’s rolling blackouts.

During the conversation, Kudrytskyi, together with Dmytro Sakharuk, Executive Director of Ukraine’s DTEK energy organization, and former Deputy Minister of Energy Oleksiy Ryabchyn, highlighted concerns about Ukraine’s energy status and the challenges it faces.

“Even in the summer, when consumption is 40 to 45 percent lower than in the winter, we have a power deficit that cannot be covered by electricity imports from Europe,” Kudrytskyi said, adding that a number of EU countries are now transferring 1.7 GW of energy to Ukraine to help with the deficit.

However, in response to a subsequent Kyiv Post question, Kudrytskyi declined to comment on the electricity capacity used last year and required for the upcoming winter, citing a sensitive figure.

According to DTEK’s Sakharuk, Ukraine’s declining energy condition is primarily due to a lack of air defense missiles.

“It appears that for every missile that we have right now, five, six Russian missiles are coming in.

“If 10 missiles are coming in, you need at least 12 missiles in the air defense … so, even if we start recovering, start repairing, there’s no means right now to protect [the] recovered units,” Sakharuk said.

He also blasted Kyiv’s insufficient investment in the private sector and poor governance, which aggravated the problem.

“In Ukraine, no capital is in private hands. The capital only goes from government to government. [The] private sector is zero right now,” he added, adding that it would cost over $1 billion to restore a single GW of energy, regardless of the source of energy.

“The state sector could not deliver results quickly in time, except [for a] few exceptions. We have some. But in general, it’s just total managerial inability to do something in time,” Sakharuk added.

“Just because the money that was given to some state-owned companies will not be spent. Why? Because there is no organizational ability to spend them. No experience, no knowledge, and no desire.”

Then there’s the question of war insurance, or the lack thereof, which has stopped private enterprises like DTEK from implementing some projects.

“It’s impossible to build something if you don’t have war insurance right now – or if you have, as everybody says, the coverage available [is] $1 million. But you need $1 billion… This is the third year we are talking about this,” Sakharuk said.

There are several options for dealing with the deficit, including decentralized power generation, restoration of wrecked infrastructure, and importing more from Europe, each with its own set of challenges.

“We have to recover as much generation capability as possible before winter; We have to ask for extra air defense to protect what we recover, but also we have to roll out new generation facilities to make sure that if Russians undertake these attacks, they cannot concentrate on 10 or 15 big power plants, but they would have to deal with hundreds of smaller ones.

“This is what we talk about. This is where we get to [the] decentralization of the generation. And we have to do it not after the victory, not after the war, but right now,” said Ukrenergo’s Kudrytskyi.

He claimed Ukraine would require at least a few GWs to replace the ones it has lost, but the country “would not be able to recover in the next two to three years.”

In terms of decentralization, Kudrytskyi believes a shift in government attitude is required.

“And I agree with Dmytro. You cannot roll out decentralized generation in a centralized way,” he said, adding that it would not be possible to manage 500 smaller power plants through centralized governmental entities.

“With all due respect – not only are we talking about DTEK, we’re talking about 50 companies that should enter the market and more,” said Kudrytskyi.

Aside from governance, it is considered that establishing new, decentralized facilities would take years, making it a long-term solution that would not be able to address Ukraine’s crisis this winter.

In terms of rebuilding current facilities, Sakharuk stated that DTEK intends to restore up to half of what it had before the Russian strikes on March 22 – up to 3 GW – but only if it is protected.

In terms of electricity imports, Kudrytskyi stated that the best-case scenario is to increase them to 2.2 GW, but this comes with technical and physical constraints.

“First of all, technically, there are limitations. There are physical limitations to push through the power from Europe to Ukraine. If you need extra GWs of imports, you need to build transmission lines. And it takes years, if not decades, in Europe to obtain needed permits, licenses to pass through certain communities and land,” he said.

At the end of the discussion, all three panelists agreed that it would be difficult to predict the number of hours of energy available each day this winter.

“I’m not a voodoo magician, the range of possibilities is quite high … It will almost fully depend on the attacks,” said Kudrytskyi.

Recently, GreatGameIndia reported that Ecuador’s Minister of Public Works, Roberto Luque, revealed in a post on X that the nationwide power blackout, which plunged the country into darkness, was due to a failure in the transmission line.