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Energy sector

The war in Ukraine had a significant negative effect on the Ukrainian energy sector. About 50% of the country’s installed power capacity is occupied, damaged or destroyed, thousands of kilometers of electricity, gas and heat networks, transformers, compressor stations, boilers and other infrastructure facilities. The oil refining industry is destroyed.

Frequent attacks on energy infrastructure have left 12 million households across the country without or with limited electricity and with disrupted water and heating systems. Most systems in a country continue to operate in a centralized manner, making the energy supply more vulnerable, sometimes leading to disruptions of gas and district heating networks and of electricity supply, which would significantly affect the supply of water in major cities and have a major impact on other sectors.

The post-war context provides an opportunity to rethink the priorities of the energy sector in Ukraine. It will need to restore its energy supply, reduce dependence on fossil fuels and rebuild energy demand sectors to minimize energy consumption. On the demand side, Ukraine will have to promote the electrification of the industrial, transport and heating sectors. The heating and industrial sectors will need to reduce their reliance on gas to avoid gas imports in the short term while setting the pace for long-term decarbonization.

On the supply side, biofuels (including biomass, biogases, and hydrogen) will need to replace gas as the main fuel source in the industrial and heating sector, even though the electrification of industry and heating contributes to the gas shift.

With the growth of AI, additive manufacturing, automation and other technologies, the transition towards a cleaner future can be easier as many of the innovations help to control and monitor infrastructures and improve the environment by replacing old equipment with newer and better solutions.

> $27 bln
losses across power, gas, coal, and fuel sectors
12 mln
households impacted
of the total car fleet are electric
share of bioenergy in electricity production