The war in Ukraine, which has caused immense suffering and resulted in the destruction of critical infrastructure, demands urgent action to rebuild the country and its energy system.
Today, Ukraine heavily depends on fossil fuels, which accounted for some 70% of its primary energy supply in 2020. The Russian invasion has resulted in the occupation (the Zaporizhzhya nuclear power plant and about 44% of total thermal power capacities) and destruction of critical energy infrastructure triggering a sharp decline in total energy supply, while electricity demand had fallen by 40% by October 2022.
In view of their high untapped potential in the country, bioenergy, hydro, solar and wind generation could constitute the building blocks of Ukraine's future energy system, contributing up to nearly 80% of total energy generation by 2050. Provided key strategies and investments are put in place, and complemented by nuclear, renewables could propel Ukraine towards a carbon-neutral future. These are the main findings of the pathway scenarios developed by UNECE, based on its UNECE Carbon Neutrality Toolkit, published ahead of the Ukraine Recovery Conference (London, 21-22 June).
"This report aims at serving as a roadmap for policymakers and stakeholders, providing insights and recommendations for Ukraine's energy transition," said UNECE Executive Secretary Olga Algayerova. "UNECE will continue to collaborate with the Ukrainian government, international organizations, and partners towards reconstruction and recovery for a just and sustainable future for Ukraine, in line with global climate commitments".
Reducing dependence on fossil fuels and enhancing energy security
Achieving carbon neutrality would necessitate a radical transformation, including the phase-out of unabated fossil fuels, massive improvements in energy efficiency and harnessing modern bioenergy.
The energy intensity of the Ukrainian economy is three to four times higher than the European Union average, driven by high demand in residential heating, an industrial structure that is concentrated in capital and energy-intensive activities, and an energy-inefficient industrial, energy, and building infrastructure due to decades of under-investment. By embracing energy efficiency improvements and electrification, Ukraine could dampen demand growth and achieve a significant decrease in energy intensity, of up to 60% by 2050.
Decarbonization efforts across all sectors would be essential in reducing reliance on fossil fuels. The report estimates the potential for a decline in fossil fuel dependence by 93% in the transport sector, 97% in the industrial sector, and nearly 100% in buildings by 2050. Extensive decarbonization could lead to a doubling of electricity demand.
Moreover, the transition to a carbon-neutral energy system would enhance Ukraine's energy system's resilience and independence. The report envisions a scenario of shift towards domestic renewables and low-emission technologies, which would make Ukraine self-sufficient in terms of primary energy, reaching 98% by mid-century. This transformation would not only contribute to energy security but also mitigate the impact of regional and global energy crises on Ukraine.
Massive investments needed
Realizing these ambitious goals would require an increase in annual investments by EUR 30 billion per year, or approximately 15% of GDP by 2050 across various sectors, including transport, residential buildings, industry, power generation, and renewables. Energy investments would need to reach EUR 9.5 billion annually, with additional investments needed in energy infrastructure (e.g. power grids, heat networks, gas pipelines).
Prioritizing investments in clean and efficient end-user devices, along with tripling investments in power generation, particularly in batteries, bioenergy, wind, and solar technologies, would be critical to achieve carbon neutrality.
The scenario has been built on the assumptions that all occupied territories are restored; and captured and damaged production facilities are returned and recovered by 2025. No import and export of hydrogen, biomethane, or other green fuels/energy has been taken into consideration.
