After the war: the state of Ukraine’s energy infrastructure and the future of the industry

Since the beginning of the Russian invasion, more than 4,000 km of gas distribution networks have been destroyed. As a result, losses of operators of gas distribution networks reached UAH 9.2 billion at the end of May.

Experts are convinced that one should not be limited to restoring the destroyed infrastructure to the pre-war level. Most analysts and officials suggest rebuilding natural monopolies with a future perspective, that is, modernising them.

Anton Zorkin, Head of the “Energy” sector, told what it is worth knowing about the restoration of Ukraine’s energy infrastructure.

The main thing for the post-war reconstruction is to attract a sufficient amount of investments to modernise as much of the networks as possible

Anton Zorkin notes that the proper course has been chosen for the modernisation of Ukrainian infrastructure. “During the development of electric and gas networks, even before the active phase of the war, modern technologies were used. The only problem is that the share of new networks in their total number is tiny. The reason for this is insufficient funding. Therefore, the main thing for the post-war recovery is to attract a sufficient amount of investments to modernise as much of the networks as possible. After all, in the process of restoration of objects damaged as a result of the war, a relatively small share of networks will be modernised, especially outside the areas of hostilities. Therefore, it is very important to attract funding for the total modernisation of networks throughout Ukraine. And in addition to the modernisation of networks directly, it is also necessary to introduce financial incentives for operators regarding further investments in the comprehensive development of companies,” says Anton Zorkin.

The need for modernisation is argued by the expert, in particular, by insufficient efficiency of the existing supply and distribution systems. Low network efficiency means high energy losses in the distribution process, low supply quality, and high operating costs. That is, low technical efficiency leads to low financial efficiency and ultimately to an increase in the cost of services for end users, explains the representative of BRDO.

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