Given the continued Russian missile attacks, Ukraine will have to change the structure of its energy system.
We all know that The Oaktree isn’t a political organization but, a mail arrived in our inbox this morning and after reading it, we felt that the content of the mail regardless of all the tragedy that a war brings was interesting and the thinking behind the changes Ukraine’s minister of Energy Herman Galushchenko expresses, is valid regardless if you are living in peace or not.
According to the Energy Research Center director, Oleksandr Kharchenko, Ukraine lost 10-12% of the generating capacity that was available at the time of the first attack on March 22 due to the latest intense attacks on the energy system. He added that restoring these capacities quickly will not be possible; at best they will return to operability before the next heating season.
At the same time, Dmytro Sakharuk, the Executive Director of the energy company DTEK, said that 80% of DTEK’s thermal generating capacity was damaged or destroyed in the March attacks. On March 29 alone, Russia attacked three DTEK thermal power plants and two Ukrainian hydroelectric power plants – the Kaniv and Dniester HPPs, which pose an ecological disaster threat for Ukraine and Moldova.
One of the largest thermal power plants, Zmiivska TPP in the Kharkiv region, was destroyed in the March 22 shelling. In this regard, Ukraine will provide its partners with a list of urgent needs to restore the generation capacities of energy companies in the state and private sectors.
Ukraine will have to change the structure of its energy system.
A shift to a large number of distributed small generation facilities is envisioned because it will be difficult and expensive for Russia to fire missiles at hundreds of small power plants, according to the head of the Committee on Energy, Andrii Gerus.
“Work is already underway to slightly change the architecture of the power grid so that we have a great number of small, distributed, decentralized generation points that are closer to the end user.
When we have hundreds of small power plants that will be located near consumers, areas where there is a serious consumption of electricity, then it will be practically impossible, or at least very expensive, to fire missiles at small objects,” Gerus added.
“the new configuration will contribute to both the flexibility of the power system and its reliability to provide electricity to end consumers.” – Andrii Gerus
“Most often, businesses build solar power plants to generate electricity for their own consumption, but each enterprise has a period of reduced consumption, and then they can take advantage of the opportunity to sell electricity to the grid,” said Andrii Gerus in his speech.
Secondly, state-owned banks, in particular Ukrgasbank and Oschadbank, have developed loan programmes to finance all types of green power plants.
Conclusion on why this is relevant for us all
Luckily war isn’t around our corner but, cyber-attacks, a new 9/11, accidents, and weather are daily threatening our sensitive and much-needed infrastructure.
- A recent report from cybersecurity asset intelligence firm Armis found that cyberattacks on utilities increased by more than 200% in 2023, with overall cyberattacks increasing by 104%.
- The U.S. has sustained 377 weather and climate disasters since 1980 where overall damages/costs reached or exceeded $1 billion (including CPI adjustment to 2024). The total cost of these 377 events exceeds $2.670 trillion.
- Bombings decreased, from 439 reported incidents in 2016 to 335 incidents in 2017 according to the bureau of firearms.
Even if the US and most other countries aren’t at war, there are severe dangers that we need to take into consideration.
Perhaps the most interesting piece that the mail expressed was, that it’s safer, and more resilient to build small distributed power generators.
It would be understandable if Ukraine only would build natural gas plants since they have the second largest reserves in Europe. However, they are using all energy sources to reduce the risks, which we should consider as well, not to put all our eggs in one basket, because we know how risky that is, all we need to do is look at Germany.
