Renewable Energy: How Ukraine is building the foundation for future growth
Russian aggression has made energy not just critically important, but decisive for Ukraine’s future. The loss and destruction of a significant portion of its generating capacity, attacks on its infrastructure, and the occupation of the Zaporizhzhia Nuclear Power Plant have become unprecedented challenges.
However, we have simultaneously been presented with a unique window of opportunity. Rebuilding the energy sector can not only restore but also modernize the country. It can make it resilient, modern, and competitive in a world where energy has become the most critical resource.
New Investments: from theory to contracts
In July 2025, the Ukraine Recovery Conference (URC2025) took place in Rome. It could become a pivotal turning point for Ukraine’s energy sector.
Indeed, of the over 200 agreements totaling 10 billion euros reached over the two days, a significant portion pertains specifically to energy. According to official data, these include financial agreements in the energy sector amounting to over 1.2 billion euros.
This is not just about general intentions, but about specific contracts, financial commitments and technical solutions that will begin to be implemented in the coming months.
These are agreements for the development of nuclear power generation, hydropower, the oil and gas sector, distributed generation, renewable energy, as well as educational and research programs.
Therefore, even amid ongoing combat operations and air strikes, investors recognize the potential for financing Ukrainian energy projects.
The Future of Energy: where the focus lies
Today, the entire world is competing for access to a large quantity of a cheap resource – energy. The growth in global demand in 2024 alone (by 2.2%) exceeded the average annual rates of the last decade.
This may seem paradoxical, but Ukraine is no exception. Yes, during the first three years of the full-scale war, the energy market experienced a decline. However, in 2025, the vector has already changed: the country is entering a period of sustainable growth in energy consumption.
The key growth factors are the recovery of industry, the construction of mil-tech clusters and the launch of new processing capacities. And in the perspective for the coming years – the development of data centers with their high demand for electricity.
This is precisely why Ukraine’s energy strategy is concentrated on several key directions at once:
- Nuclear Power. «Energoatom» and Westinghouse Electric have signed a declaration on the localization of VVER-1000 fuel assembly production. In parallel, a memorandum was signed with Holtec International to launch a plant for the production of Small Modular Reactors (SMRs) and containers for spent nuclear fuel storage. This could become the transition to full energy sovereignty.
- Gas Power Generation. «Ukrnafta» is launching six distributed generation projects with a total capacity of 420 MW. With the support of international partners, the new gas turbine and gas piston power plants will be commissioned as early as 2026. Specifically, €160 million for this will be financed by the EBRD. Furthermore, Naftogaz of Ukraine has signed a strategic memorandum with Baker Hughes on modernizing gas extraction and transportation, and implementing hydrogen solutions.
- Renewable Energy. The URMM (Ukraine Renewable Energy Risk Mitigation Mechanism) was established in the renewable energy sector to attract investments into new projects. In addition, the EBRD and the EIB view it as a mechanism for guaranteeing a minimum price for «green» electricity. This is particularly relevant for Ukraine given the poor state of settlements between NPC «Ukrenergo» and the enterprise «Guaranteed Buyer». The URMM has already been funded with contributions from the EU (€180 million) and the Netherlands (€12 million), with Germany, Sweden, and Switzerland expected to participate. The overall goal of the URMM is to attract €1.5 billion in investments for the construction of solar and wind power plants.
- Grids, hydropower plants, and energy efficiency. In addition, the EIB is allocating €120 million for the repair of hydropower plants damaged by attacks as part of the energy sector restoration. This will help partially restore the capacities to operation. A memorandum has been signed between Ukrenergo and the Italian company Terna regarding system synchronization and the exchange of experience in the field of grid management. Companies such as Siemens, Voith, Webuild and other players are also joining the modernization of critical infrastructure.
Resource base and challenges
The Ukraine Energy Support Fund, established in 2022 with the involvement of the Energy Community, has already accumulated over €1.16 billion from 33 donors.
This has made it possible to sign over 790 contracts for the supply of equipment to more than 50 energy companies in 21 regions of Ukraine.
The current simultaneous gap between the needs of the energy system and the available resources is estimated at €617 million.
This once again underscores that we must not only use the attracted funds but also build a systematic funding model — one that is efficient, transparent and results-oriented.
Perspective: a new energy model
Ukraine has all the prerequisites to become a regional energy hub. We are already rethinking our generation structure, reducing dependence on centralized solutions and transitioning towards decentralization and smart grids. In parallel, we are integrating into the European market, gaining not only technologies but also the principles of transparent governance and regulation.
But the main point is that we are starting to think strategically. If the driver of the energy boom in the US is artificial intelligence, then in Ukraine it is industrial development, mil-tech and data centers.
We understand that recovery is not about returning to the pre-war state. It is about creating a new model, based on energy independence, flexibility, and technological development.
And it is energy, as in every great transformation, that is of primary importance.
The author of the article is Andrii Kalinov, Technical Director of NVP «ENERGO-PLUS» LLC.
Source: Energy Club.
