War in 2025: How energy dynamics have shifted and the reasons behind rising utility tariffs for residents in Ukraine.
The overall losses in Ukraine's energy sector during the war exceed $56 billion. To fully restore, not just return to pre-war levels, but to improve the condition of the energy sector, $50.5 billion is necessary. This is how the situation in the energy sector was outlined by analysts from the Kyiv School of Economics (KSE). Energy experts assessed the chances of restoring Ukrainian energy and discussed whether it is realistic to expect a life without blackouts.
Multi-Billion Dollar Losses: How Specialists Assess the Energy Situation After Three Years of War
Data on losses in the energy sector from Ukrainian experts at KSE aligns with the assessment from the International Monetary Fund (IMF), which estimated the losses of Ukrainian energy due to Russian shelling at $56.5 billion as of the summer of 2024.
During the war, the Russian army occupied the Zaporizhzhia Nuclear Power Plant, considered the largest in Eastern Europe — the installed capacity of all six power units is 6040 MW. As of September last year, Russia carried out 25 massive missile and drone attacks on Ukraine's energy system. This is confirmed by data published on the Energy Map portal of the Ukrainian analytical center DiXi Group.
The Kakhovka and Dnipro HPPs, as well as the Zmiiv and Tripoli TPPs, were completely destroyed.
The Kakhovka and Dnipro HPPs, as well as the Zmiiv and Tripoli TPPs, were completely destroyed. Critical damage (over 80%) was inflicted on private thermal power plants, including the Ladyzhyn, Burshtyn, Dobrotvor, Kurakhiv, Kryvorizhzhia, and Dniprovska TPPs.
"The infrastructure has been damaged by billions of dollars. The most sensitive damage and destruction is the DniproHES. This is truly a significant loss for Ukraine. It should be emphasized that DniproHES was a power plant that significantly enhanced the ability to balance our energy system. We already have a deficiency of maneuvering capacities, so its loss is very noticeable," noted the director of energy programs at the Razumkov Center, Volodymyr Omelchenko.
1 As of 2025, Prime Minister Denys Shmyhal stated at the "Ukraine. Year 2025" forum on February 23 that due to Russian shelling, Ukraine lost 10 GW of generation capacity.
Russian troops have effectively destroyed all oil refineries on the territory of Ukraine and repeatedly damaged a significant portion of the infrastructure for storing oil and petroleum products.
According to experts, the greatest losses (let's recall, the total amount of losses in the energy sector exceeds $56 billion) were caused by the destruction of electricity generation facilities ($8.5 billion), main power transmission lines ($2.1 billion), and oil and gas infrastructure ($3.3 billion).
"The restoration needs for the electricity sector are estimated at a total of $33.8 billion, including $29.3 billion for generation facilities. An additional $4.6 billion is needed to restore electricity transmission and distribution infrastructure. The estimated cost to restore the oil and gas sector reaches $14.8 billion, and the centralized heating sector — $1.4 billion, not including the restoration of large CHPs," the KSE report states.
The director of research at the DiXi Group analytical center, Roman Nitsovich, noted that during the war, when information on security reasons is not disclosed, it is difficult to provide accurate data on capacity losses and their restoration. Therefore, conclusions can only be drawn based on the assessment of damaged, lost, or occupied facilities.
2 Repair, Build, or Change Strategy: Paths to Restore the Energy System
In the context of ongoing missile attacks, restoring damaged facilities — which requires time from several months to several years and does not guarantee protection during the next attack by the Russian Armed Forces — is considered impractical by energy specialists. They see a way out in ongoing and capital repairs, so-called "donor stations," as well as distributed generation — thousands of small facilities for electricity generation.
Ukraine had 30 key substations. Almost all were damaged during the war.
He noted that Ukraine had 30 key substations. Almost all were damaged during the war.
"In 2023, two substations underwent a major overhaul; however, in all other cases, only current repairs were performed. Therefore, at least seven of the key Ukrainian substations needed repairs as early as 2024. As far as I know, nothing has been done there. Operational repairs continued, of course, improving the technical level of the substations, but no capital works were carried out. I would add that no one has yet calculated how much investment is exactly needed to restore Ukraine's energy system. All that is known are only approximate estimates, which may not account for the facilities that were not operational," added Korolchuk.
3 The expert also noted that Ukraine is using so-called "donor" facilities, for example, the Kurakhiv TPP, which was dismantled for parts to restore other damaged power plants.
For a long time, the Russians shelled the Kurakhiv TPP with artillery. In April 2024, the losses from attacks on this TPP were estimated at nearly a billion hryvnias. However, it was ultimately decided to dismantle it after the occupiers blew up the bridge through which coal was delivered to the station. Restoring the bridge was impossible, so the TPP, which had been operational for decades, was decided to be dismantled. Before that, DTEK was searching for spare parts at decommissioned power plants across Europe. However, even partners who had Soviet-era spare parts needed months to arrange for and transport them to Ukraine.
"Equipment that is not in operation is being removed, or old units are being used. However, this is certainly not presented by energy companies as a solution to the problem," added expert Yuriy Korolchuk.
He also noted that Ukraine did not plunge into new blackouts in the winter of 2025, primarily thanks to the effective and prompt work of energy workers who are restoring, reconfiguring, and reviving damaged networks. Moreover, the winter, except for the last weeks of February, cannot be called frosty. However, there is another factor that influenced the fact that Ukrainians spent this winter with electricity.
"Since the second half of 2024, industrial capacities have somewhat decreased, which allows for not disconnecting the population and only limiting businesses," says Korolchuk.
4 Electricity Tariffs for Households: Will They Increase This Year
The Ukrainian government approved a new fixed tariff for electricity for households, according to the KMU resolution №632, effective June 1, 2024, the tariff for electricity for residential consumers increased from 2.64 UAH/kWh to 4.32 UAH/kWh. It should be noted that the tariff is fixed and does not vary by consumption volume. Since this price is expected to remain until April 30, 2025, no changes in electricity costs for households are anticipated at least until May.
As of June 1, 2024, the tariff for electricity for residential consumers increased from 2.64 UAH/kWh to 4.32 UAH/kWh.
According to the October memorandum of the International Monetary Fund, following the fifth review of the Extended Fund Facility (EFF), there are no plans to raise energy prices in Ukraine in the near future. The document does not contain direct requirements for increasing tariffs for Ukraine, as reported by the Ministry of Finance of Ukraine.
However, due to increased enemy strikes and shelling of infrastructure in Ukraine, the topic of changes in electricity tariffs arises from time to time in the information space. In particular, some experts do not rule out the possibility that electricity tariffs could rise during 2025. For instance, the chairman of the Union of Utility Consumers, Oleg Popenko, expressed the assumption that from the beginning of summer, the price of electricity could rise to 6.64 UAH per kWh: "The electricity tariff for households is planned to be raised from June 1, 2025, approximately to the figure of 6.64 UAH. Approximately. It could be plus or minus 6.32 UAH or 6.64 UAH."
"People are raising questions against this backdrop, given the significant investments announced for the completion of units at the Khmelnytsky NPP, purchases made by Energoatom, and so on. It is clear that this is the context in which it will be necessary to communicate decisions regarding tariff increases for households. Therefore, I do not rule out the possibility of price increases, even this year. But it is still unclear what logic they could use to implement this,"