On Wednesday January 25, Ukraine’s energy security was the topic of the first 2023 online briefing by DTEK CEO Maxim Timchenko. The online session was conducted from a bomb shelter due to the air raid alert in Kyiv. Here are the key messages:

Energy facilities under massive miles attack 

  • Russia is changing its war tactics. It is focusing on completely destroying power units. On January 14 the main target was power units of TPPs, not just transformers as previously seen. The devastation and destruction means it will be impossible to restore electricity supply with equipment from Western partners quickly, and in fact is requires investment and a longer rebuild. 
  • DTEK Group is the major operator of TPPs in Ukraine and is under direct attack from the Russian war machine.
  • As a result of the systematical damage to Ukrainian energy facilities, there is now a significant power deficit in the system – approximately 1.5 GW at night and up to 4.5 GW during the day.
  • On average 6 million Ukrainians are deprived of daily electricity supply.
  • The heaviest price for Ukraine is the loss of people's life. Since the beginning of the war, 133 of DTEK’s employees have died, 24 are missing, 4 are in captivity, and 322 have been wounded. Our thoughts and prayers are for everyone impacted, especially the families of those who we have lost.

The Winter season 

  • We have 80 days left until the end of the 2022-2023 heating season
  • At the start of Winter, Ukraine had enough reserves of coal and gas in storage; the subsequent damage of electricity facilities has led us to an urgent situation where DTEK now does not have enough capacity to supply 24-7 power supply.
  • Conversely, due to the country's decline in consumption and the increase in gas production by private companies, Ukraine will have the potential to export gas to Europe upon completing the pipeline, and still enough for new Winter.
  • In 2022, DTEK Oil&Gas produced more than 2 billion cubic meters of gas, thus keeping private gas production at levels set in 2021. The company is one of a few in Ukraine’s gas industry to keep production at pre-war levels for the year, despite the war.
  • In 2022 DTEK Energy managed to keep coal production at pre-war level.
  • The main challenge for Ukraine during the current heating season is the ability to supply electricity. Solutions discussed during the session included:
    • Electricity import. As of now, Ukraine has cross border capacity to supply 600 MWt and could increase it to 2,5 GWt in the mid-term perspective. Last week Ukraine managed to import the first 300 MWt the previous weekend. The next step is to increase imports and further integration with Europe. 
    • Investments in RES. DTEK and renewables developers are in discussions to resume construction of various solar and wind power farms. From mid-term and long-term perspectives, increasing RES is the best model for the Ukrainian energy sector to ‘build back greener’, as endorsed by US Senator John Kerry in Davos. Not only because it achieves decarbonization targets but because decentralizing energy sources are harder to target and destroy versus a TPP. 

Preparation for the next winter season and model of future European security  

  • Ukrainian energy companies and government should prepare for the next winter heating season. International partners are helping Ukraine restore its energy system. Unfortunately, only the public sector is financed so far. DTEK does not receive grants or loans. We repair damaged equipment at our own expense, which is now at a critical point.
  • Russia is not selective in hitting private or state energy assets, but international support is provided only to governments. State companies are receiving money to order transformers and other equipment to recover from the attacks. Ukrainian private sector companies are at breaking point.
  • Private business will play the key part in the restoration process. But DTEK gets a small amount of high-voltage equipment through the distribution of the Ministry of Energy, and its volume is not sufficient to meet all our needs. 
  • It is critically important to develop investment solutions for energy companies in Ukraine and provide tools to invest in restoring energy facilities or, more importantly, to create new renewables capacities.
  • Ukraine has huge potential in renewable energy and will help Europe decarbonize faster and reach its Green Deal goals. 
  • DTEK announced at Davos the “Ukraine Coalition of the willing - build back greener”. Private companies will lead in providing expertise, skills, capacity, and funding to help in various sector taskforces. The Energy taskforce has a target to build 30 GW of renewable energy in Ukraine by 2030, a brand-new national economy with enough clean energy to export to Ukraine’s Western neighbours.