How renewable energy can help Ukraine overcome the energy crisis

Ukraine is facing a severe energy crisis due to the destruction of gigawatts of generating capacity by Russian attacks. These attacks have primarily targeted maneuverable generation—thermal power plants (TPPs) and hydroelectric power plants (HPPs)—which are crucial for system flexibility during peak consumption hours.

In the short term, the most effective solution lies in the development of wind energy. Wind power has the lowest total cost per kilowatt-hour and can be deployed quickly. A wind power plant (WPP) can be built within a year, while larger projects take about two years. Ukraine already has several projects that have passed all development stages and are ready for implementation.

According to Ukrenergo’s estimates, Ukraine needs 8 GW of new renewable energy capacity, up to 1.5 GW of gas-fired maneuverable power plants, 1.5 GW of biomass-fired TPPs, and 1 GW of energy storage systems. The Ukrainian Wind Energy Association estimates that 4–5 GW of wind power capacity could be rapidly built in the coming years.

However, large-scale deployment of renewable energy requires addressing several key challenges:

1. Establishing a Corporate PPA Mechanism. Currently, Ukraine lacks a corporate Power Purchase Agreement (PPA) framework, making it harder to attract international investments. Implementing PPAs would provide investors with predictable long-term revenue streams, significantly accelerating the construction of new power plants.

2. Investment Insurance. Due to high wartime risks, many renewable energy projects remain unimplemented. The government has introduced an investment insurance mechanism, but its current coverage limit (up to 200 million UAH) is insufficient. A more robust insurance fund should be created in partnership with international financial institutions to protect investments.

3. Settling debts to renewable energy producers. As of 2024, the Guaranteed Buyer has paid only 60% of the funds owed for renewable energy, with total outstanding debts exceeding 18 billion UAH. The government could resolve this issue by providing a loan to Energoatom or issuing bonds, allowing debt repayment to investors and stimulating new construction.

Currently, the cheapest energy sources worldwide are onshore and offshore wind, as well as solar power. According to Bloomberg NEF, the Levelized Cost of Energy (LCOE) for nuclear power is estimated at $230–432 per MWh, whereas wind energy is significantly more affordable. Given Ukraine’s war-driven energy crisis, leveraging this cost advantage is critical.

The expansion of renewable energy is not just a technical necessity—it is a crucial economic factor that impacts business stability, social welfare, and national defense capabilities. The speed at which new power generation facilities are built will determine whether Ukraine can overcome its energy crisis and mitigate the impact of power outages on daily life.