Integration of Ukraine’s Energy Sector into the EU: Building Stronger Ties for the Future

DiXi Group and The Clingendael Institute have published a joint research “Integration of Ukraine’s Energy Sector into the EU: Building Stronger Ties for the Future”, which analyses the transformation of the Ukrainian energy sector and the possibilities of its integration with the European energy market.

If there has ever been a country where “build back better” applies to the energy system, it is Ukraine. From a heavily centralised, fossil-dependent energy system, Russian attacks now compel Ukraine to continuously undertake short-term decentralised repairs to its energy infrastructure. In order to join the EU and cut its fossil ties with Russia, Ukraine has started to implement a completely revised, much greener and decentralised energy system as part of its reconstruction efforts.

This policy brief discusses efforts by the EU, the US and other partners to support the restructuring of Ukraine’s energy sector. It argues that energy transition can be an early win in a process of gradual integration into the EU. Ukraine can moreover be considered as a blueprint for more decentralized electricity systems running on renewable energy to increase energy security in the face of disruptions. To accelerate Ukraine’s energy recovery in line with the EU Acquis, both partners need to set up a proper institutional and regulatory framework and to attract investments.

A Green Agenda for Ukraine could guide policy reforms in the energy sector and facilitate alignment with the EU. Moreover, in order to realize Ukraine’s ambition to export green electricity and hydrogen to Europe, investments need to be made to repurpose the existing gas infrastructure to deliver green hydrogen.

In addition, the document states that the integration of Ukrainian energy market operators into European structures such as ENTSO-E and ACER will facilitate energy reforms and accelerate Ukraine’s accession to the EU, which is an important step towards energy independence and sustainable recovery.