The response to the destruction of the energy sector should be to increase the speed of its recovery – Olena Pavlenko at URC 2024

The response to the destruction of Ukraine’s energy infrastructure by russia should be to increase the speed of recovery by simplifying procurement and import procedures for equipment, accelerating digitalisation in the organisation of humanitarian aid to energy companies, and expanding opportunities for cities and communities to find autonomous solutions.

Olena Pavlenko, President of the DiXi Group, spoke about this during the “Green Transition as a Business Case” panel at the Ukraine Recovery Conference (URC) in Berlin on 12 June. 

The discussion included a presentation of the National Energy and Climate Plan (NECP) until 2030.

Oleksiy Sobolev, Deputy Minister of Economy of Ukraine, said that the NECP was the result of commitments made by the Government of Ukraine last year at the recovery conference in London in 2023. Despite the fact that most EU member states develop similar plans over 1.5-2 years, Ukraine completed this task in less than a year.

“First time, we collected our national energy and climate commitments in one document. From now on, these policies will be synchronized and will be aligned with the European Green Deal policy and targets. Despite the war and all damages to energy infrastructure, Ukraine still is committed to move towards green recovery and decarbonization. Ukraine will follow “Energy Efficiently First” principle, and energy security will be an integral part of our both energy and climate policies.,” Oleksii Sobolev emphasized during his speech.

The Deputy Minister of Economy noted that the implementation of the NECP policy in all sectors will require significant expenditures that cannot be mobilised in Ukraine alone. This requires commitments from our international partners to support this approach.

According to Olena Pavlenko, the regular power cuts that began in the summer are having a major impact on the Ukrainian economy. And the funds intended for development, decarbonisation, green reconstruction and the National Energy and Climate Plan (NECP) can be used to pay salaries to teachers, doctors and support the army.

“Aid and investments will not be aligned with the policies and measures of the National Energy and Climate Plan unless we protect our energy sector with air defence systems and find a solution to respond to the destruction of the energy system. I believe that the response to destruction should be to increase the speed of recovery. The more the Russians destroy infrastructure, the faster we have to rebuild it,” Pavlenko said.

The expert also suggested that three key elements could speed up the recovery:

• Reducing bureaucracy by simplifying procurement for some donors and international financial institutions, simplifying equipment import procedures, but with greater transparency in reporting;
• Reducing manual control and increasing digitalization. An example is the AidEnergy system, which is already working to distribute international humanitarian aid to energy companies. According to Pavlenko, the government and international partners should discuss what other elements of cooperation can be digitized to increase the speed of information exchange between demand and response;
• Reducing hierarchy and increasing coordination by allowing local communities and businesses to find solutions for themselves without waiting for centralized decision-making, as well as by providing tools to inform the government, transmission and distribution system operators about their activities and the ability to respond.

Mechtild Wörsdörfer, General of DG Energy said that the fact that the NECP is in its final stages of development is a remarkable achievement, especially in times of war. She noted that the Directorate had identified four aspects to be included in the NECP:

• Replacing destroyed electricity generation capacity, with a focus on renewable energy sources.
• Defining the role of domestic gas in the future energy system.
• Improving the energy efficiency of residential buildings.
• Helping energy-intensive industries to decarbonise.

In addition, it is necessary to continue reforms of the electricity and gas markets, in particular, to work on integration with the markets of the EU and Energy Community partner countries.

“Our working group will focus on reforming the gas market to make it compatible with the European one. This is an important step for the implementation of the NECP. We will be advising the Ukrainian government for six years to help implement these ambitious plans, taking into account the military situation. This will ensure predictability and attract the necessary investments,” said Mechthild Wörsdörfer.

Assistant Secretary for Energy Resources at the U.S Department Geoffrey Pyatt expressed admiration for Ukraine’s unwavering determination to win the energy war and build a more sustainable and decarbonized energy system. He stressed the U.S. readiness to provide Ukraine with all necessary support and tools to achieve this goal.

“It’s time to change the paradigm of how we think about Ukraine’s energy future. Instead of focusing on aid, we should see Ukraine as a powerful business opportunity. Europe will never again rely on Russia as a reliable energy supplier, and this opens up new prospects for Ukraine to become a key player in the energy arena,” said Geoffrey Pyatt.

Nusrat Ghani, Minister of State the Foreign, Commonwealth and Development Office of the United Kingdom, is confident in Ukraine’s great energy potential and its desire to transition to clean energy sources. She emphasizes Britain’s readiness to cooperate with Ukraine, particularly through public-private partnerships, and highlights the importance of establishing a Green Transition Office in Ukraine with British support. This office, advised by the UK Climate Change Committee and the International Climate Council, will develop and implement policies aimed at achieving green energy transition goals.

“The NECP exists, and we must do everything to make it work. We are ready to provide guidance and leadership in the areas of defense, humanitarian aid, social programs, and energy. We will work closely with Ukrainians to provide them with new opportunities in the energy sector. Ukraine can again become the seventh, sixth, or even fifth largest energy producer in Europe,” Nusrat Ghani said.

IFC Vice President for Europe Alfonso Garcia Mora stressed the importance of involving the private sector in Ukraine’s reconstruction and highlighted three key sectors: housing, energy, and transport. The speaker believes that these sectors have the greatest potential to attract investment and transform the country. He also mentions the importance of green construction and energy for Ukraine’s future. Despite the war, Alfonso Garcia Mora expresses optimism about the prospects for the country’s reconstruction and development, thanks in particular to reforms and planning.

Olena Pavlenko stated that if Ukraine stops fighting, it will cease to exist. The only way to stop russia is to deprive it of resources by stopping buying russian gas, oil, and other goods. The speaker also called for an end to cooperation with russia in the energy sector, in particular, to abandon the construction of a new nuclear fuel plant in Lingen, Lower Saxony (Germany). She stressed that Ukraine has proven the possibility of abandoning russian fuel, so there is no point in maintaining dependence on it in Eastern Europe.