The Scene
As Ukraine struggles to rebuild its decimated energy system, among its obstacles are its allies.
Last week, I visited one of the six fossil fuel power plants operated by the private Ukrainian energy company DTEK in territory held by Kyiv (the company has another two plants in Russian-occupied territory). All six have been heavily damaged by Russian missile and drone, and in some cases artillery, attacks. The one I visited — for security reasons, identifying details have to be concealed — has been attacked more than 10 times since last year, and has been shut off entirely since it was last hit with a barrage of rockets in May.
Most of the plant’s turbine units are beyond repair. A mountain of coal sits unused outside its cavernous, hangar-like main building, constructed in the 1970s, when Ukraine was part of the Soviet Union. The roof is gone. Inside is a three-story pile of charred, twisted metal draped in fallen insulation; splintered stairways and caved-in catwalks; enormous turbine shells and fuel silos pockmarked with shrapnel; sagging pipes, bits of rockets, and mounds of broken glass, all coated in ash. The huge axle of a train car sits incongruously across a second-floor walkway, thrown there from the rail line outside by an explosion. A long room where hundreds of kilometers of cables converged — and drew the raging fire along their length, during the attacks — resembles the blackened interior of a pizza oven.
Oleksandr, one of the plant’s top engineers, used to oversee its daily operations. Now his job involves a lot of sweeping and shoveling, and sifting through the rubble for salvageable parts. His staff sit on the floor to scrub small pieces of machinery with brushes, or clamber up with buckets of tar to repair the roof. Some work at desks behind a wall of sandbags, in front of now-useless switchboards, body armor and trauma medical kits at hand. They take lunch breaks and play chess in an underground bomb shelter originally built to defend against a US nuclear attack.
During the last rocket strike, the resulting fire reached above the level of the roof, and filled the complex with choking dust and smoke.
“It was like hell in here,” Oleksander said. “The power station is like a bomb itself. After all these attacks, it’s a miracle that no one here has been injured or killed.”
Making the plant operational again is tedious, strenuous, and dangerous, but Oleksandr is optimistic that it will be at least partially functional again by the end of the year. It has to be, he said, not just for the sake of the larger Ukrainian electric grid, but for the heating supply to his own house and the local community — nearly all of whom work at the plant. But the moment exhaust comes from the plant’s towering smokestacks, it will become a ripe target again.
“If we can’t protect this plant,” Oleksandr said, “then a very difficult time is coming for our town this winter.”
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Tim’s view
Russia’s attacks on energy infrastructure are forcing Ukraine to run its energy transition in reverse, dumping cash into the rebuilding of massive coal projects that would never fly in Europe or the US. And that tension has meant that even as Western capitals send weapons and aircraft to Kyiv in order to defeat an invading army, they could be hampering its efforts to rebuild critical infrastructure battered by those same forces.
In some respects, Europe’s energy transition has proved a boon to Ukraine; the decommissioning of coal plants in Germany, Poland, and elsewhere has created a stockpile of parts that Ukrainian energy officials are now scouring. But that stockpile covers only about 20% of DTEK’s repair needs, Executive Director Dmytro Sakharuk told me. As a result, cash is needed, and even though experts agree that repairing existing coal plants is the simplest and cheapest way to restore Ukraine’s energy security before this coming winter, funds are constrained by the climate policies of Western donors and financial institutions that don’t want to underwrite increased use of coal, Viktoriya Gryb, a Ukrainian lawmaker, said.
That’s both because of the emissions implications of refurbishing coal-fired plants, and because such investments may lose value in a post-war, post-energy transition Ukraine. But the resistance to coal is misguided, she said, because after the war Ukraine has the potential, and an eagerness, to be a clean energy powerhouse for Europe. In the meantime, there’s no choice but to accept the risk that today’s emergency repairs become tomorrow’s stranded assets.
“We do want to be part of the European Union, and we need to comply [with EU energy policies], that’s clear,” said Gryb, who leads a parliamentary subcommittee on energy security. “But another thing that is very clear to me is that we need to survive. That’s the difference between long-term and short-term strategy.”
Ukraine is facing an extreme version of a dilemma familiar to many developing countries, who find that their donors’ climate concerns sometimes take precedence over the near-term requirements of energy access. Wind and solar power are great, but they’re an insufficient solution for countries with extreme energy shortfalls, and for countries with plentiful fossil fuels at home, a waste of existing resources that rich countries long exploited.
In the meantime, DTEK’s books are growing increasingly dire. The company will have invested about $200 million in repairs out of its own cash reserves between last year and the end of 2024, a spokesperson said. At least another $350 million is needed, at a time when the company’s revenue has been almost entirely eliminated (the total cost of damages to energy infrastructure across Ukraine could be as high as $16 billion, according to a Kyiv School of Economics study). So far, DTEK has avoided layoffs. But the situation is not sustainable. The lack of sufficient war insurance and the company’s inability to pay the coupon on its debt because of wartime currency exchange restrictions have deterred foreign investors, Sakharuk said. The company’s sole owner, the post-Soviet billionaire Rinat Akhmetov, is also not a conventional recipient for development finance or foreign aid.
Some Western investors are beginning to change tack. Dirk Buschle, deputy director of the Energy Community, a European Union-administered organization that oversees the delivery of energy-related aid to Ukraine, said that governments are starting to come to grips with the fact that putting taxpayer euros into Ukraine’s coal sector is now unavoidable.
“The situation now has triggered a rethinking by the donors who say, ‘Our policy is green, and in principle that should apply to investments that we sponsor’,” he said. “We do realize that in order to make an impact, now before winter, we have to allow for exemptions.”
Yet they are not moving fast enough, from Ukraine’s perspective.
“Even if everything was here, the equipment, people, grid connections, permits, et cetera, and without fighting a war at the same time, it will be impossible from the physics of the process to build even one gigawatt of generation within a couple of months,” Sakharuk said, and about nine gigawatts in total have been destroyed so far.
Room for Disagreement
While it rebuilds its coal plants, access to finance remains a “bottleneck” on DTEK’s ambitious plans to develop new wind farms and grid-scale energy storage, Sakharuk said. Meanwhile, other entrepreneurs are also laying the groundwork for closer clean energy ties to Europe. Sergiy Yevtushenko, managing partner at the Kyiv-based energy development firm UDP Renewables, has several hundred megawatts of wind and solar projects ready to break ground once foreign investment returns. His whole business strategy, he said, is predicated on the theory that first-movers in the energy transition will profit most after the war.
“We will have a new inflow of investors,” he said. “We need to get ready for this.”
The View From Kursk
Ukraine, meanwhile, is escalating its own counterattacks on energy infrastructure in Russia. Following a wave of drone strikes on oil refineries last month, Ukrainian media outlets reported on Thursday that one target of the unexpected ground assault this week by Ukrainian troops into Russia’s Kursk region was a facility that controls the flow of Russian natural gas into Europe-bound pipelines, and which is now reportedly under Ukrainian control. Gas prices in Europe bounced to their highest levels this year following the attack.