Development of generation capacities and investments in alternative energy: trends and forecasts for 2025
In an interview with Forbes, energy expert Ivan Bondarchuk shared his forecasts and analysis of trends in the development of Ukraine's energy sector for 2025. Here are some key aspects related to the development of generation capacity and alternative energy.
1. Business and community investments in energy independence
Businesses and communities have already begun investing in energy independence by installing solar, gas and wind power plants, as well as energy storage systems to meet their needs in the face of supply constraints and rising electricity prices.
In 2023-2024, agreements were concluded between industrial enterprises and electricity producers to build power plants, which allows for a stable electricity supply and a discount from the market price. Such agreements include lease, energy service or purchase of energy directly from the producer.
Following the adoption of Law No. 3220 and the National Commission for State Regulation of Energy and Public Utilities regulations, most of the problems with the connection of generating facilities have been resolved, and the relevant draft laws to regulate the interaction between consumers and producers are pending approval.
2. Distributed generation and energy storage facilities
Many companies have started building power plants to enter the electricity market. NPC Ukrenergo has issued technical conditions for the connection of more than 1.2 GW of distributed generation, with potential investments of more than $1 billion.
Epicenter, Nova Poshta, and UPG joined the market, which demonstrates the attractiveness of the energy sector for investors, including high-turnover retailers. The Cabinet of Ministers has simplified permitting procedures for the construction of facilities during martial law, but this is a temporary solution. Investors must comply with the requirements of the law and electricity market regulation, and to simplify the processes, they can conclude an agreement with a trader to sell energy.
3. Investments in utility-scale alternative energy projects
In 2024, the development market for utility-scale alternative energy projects in Ukraine intensified. OKKO bought several wind farm projects, and Elementum Energy acquired a 200 MW wind farm. Other developers, such as Wind Farms of Ukraine, have also begun to launch turbines.
More foreign investors are expected to sign deals in 2025. Currently, there are various options on the market for developing such projects, investing, and attracting investment. National investors who are willing to accept the risks of Ukraine can ensure higher margins by developing the project themselves or by financing professional development at an early stage.
4. Development of extractive industries and conclusion of production sharing agreements
In March 2024, PJSC Ukrnafta initiated a tender to conclude production sharing agreements for 15 fields, including lithium. It is expected that agreements may be concluded for vanadium, titanium and uranium, and that these activities will intensify in 2025.
Particular attention should be paid to deposits where the right to develop belonged to companies subject to sanctions, as well as deposits explored by third parties. Such investment targets require additional due diligence for sanctions risks and potential litigation and arbitration disputes with previous owners and investors.
These trends show that Ukrainian business is overcoming the energy crisis by being proactive, which makes the industry attractive for investment despite the high risks.
Conclusions for Ukrainian cities
Ukrainian communities should pay more attention to infrastructure modernization and investments in energy-efficient technologies to not only support the national energy transition but also improve the quality of life of their citizens. The development of renewable energy and innovative solutions will not only reduce energy costs but also make cities more environmentally sustainable.
Thus, 2025 promises to be an important milestone for the development of Ukraine's energy sector, with a particular focus on investments in alternative energy sources.