Three years under Russian fire: How is Ukraine's energy sector coping with yet another wartime winter?

The Ukrainian energy sector has endured relentless Russian drone and missile attacks for the third consecutive year.

During this period, the industry has suffered dozens of large-scale attacks, the loss of 18 gigawatts of power generation due to occupation, and the destruction or damage of another 10 gigawatts – an amount equivalent to the total electricity consumption of the Netherlands or Finland.

On a positive note, experts’ predictions of 20-hour daily blackouts didn’t materialise. This weekend already marks the beginning of spring, bringing with it forecasts of warmer weather.

On the downside, the threat of new bombardments remains and Ukraine's heating season does not end on 1 March. At best, it will last another month, possibly longer.

The situation in the power and gas sectors remains grim, although a catastrophe or apocalypse has definitely been averted. How has the industry managed to persevere?

What's happening with electricity?

Russian forces have launched more than one thousand strikes on Ukrainian energy infrastructure since October 2022. Hundreds of Shahed loitering munitions and dozens of missiles continue to regularly target Ukrainian power plants and distribution networks across various regions.

However, despite the relentless attacks and apocalyptic predictions from energy experts and foreign media outlets of "20 hours a day without electricity", Ukraine is getting through the winter more or less steadily.

Even as temperatures plummeted in February, Ukraine's power grid managed to prevent large-scale power cuts. Restrictions on energy consumption for industry and businesses became routine in the final month of winter, but the population felt little impact. The only exceptions were brief emergency blackouts in certain regions due to Russian strikes and freezing weather.

How has Ukraine avoided long hours of blackouts? Experts and market participants attribute this success to a combination of several factors.

First and foremost, Ukraine has prepared for the heating season. Prime Minister Denys Shmyhal reported that the country had restored around 4 GW of capacity at damaged thermal and hydroelectric power plants in 2024.

Secondly, Ukraine’s air defences have been reinforced, as evidenced by their performance during the most recent Russian attacks. However, this is still not enough.

President Volodymyr Zelenskyy has emphasised that Ukraine requires 20 additional Patriot air defence systems to fully protect its energy sector. "If we do not protect the switchgears at nuclear power plants, we may lose another 4-5 GW of generation," he warned. In such a scenario, blackouts of 20 hours a day would be inevitable.

Thirdly, the weather has generally been kind to Ukrainians for three years in a row. Despite temperatures plunging to -20℃ in some regions in February, these cold spells were brief. However, consumers did feel the impact through restrictions on industry and business and short-term emergency power cuts in several regions.

As in previous years, electricity imports from the European Union remain vital for getting Ukraine through the winter. Starting 1 December 2024, the European Network of Transmission System Operators for Electricity (ENTSO-E) has increased its import capacity from 1,700 MW to 2,100 MW.

In addition, Ukraine is guaranteed to receive up to 250 MW in emergency mode if necessary.

Kyiv increased its electricity imports by more than fivefold last year, reaching 4.4 million MWh. Most of these imports came from Hungary (39%), Slovakia (23%) and Romania (18%).

For most of this winter, less than 50% of the import capacity available from the EU was utilised, leaving a safety margin.

All these factors combined ensured that the Ukrainian power grid remained intact and avoided prolonged blackouts.

Gas market: no imminent catastrophe

Although Ukraine's gas facilities have been under Russian fire almost since the onset of the full-scale war, they have suffered the most damage in 2024-2025. Initially, the Russians systematically targeted gas storage facilities in the country's west before shifting their focus to production facilities in the east and centre.

Russia began targeting Ukraine’s underground gas storage facilities in the spring of 2024. Ekonomichna Pravda sources in the gas sector have identified two main objectives behind the Russian bombardments.

The first objective was to disrupt Ukraine's preparations for the heating season by preventing gas from being pumped into storage facilities.

The second objective was to deter foreign traders from storing gas in Ukraine. Unfortunately, the Russians succeeded in this. At the beginning of the previous autumn-winter period, non-residents held 2.5 billion cubic metres of gas in Ukrainian storage facilities, but by 2024, this volume had dwindled to almost zero.

Attacks on Ukrainian gas production facilities have surged since the New Year. Since then, Russian forces have repeatedly targeted facilities owned by Naftogaz, Ukraine's largest national oil and gas company, in Kharkiv and Poltava oblasts. A gas production facility belonging to DTEK, a private energy company owned by oligarch Rinat Akhmetov and the largest of its kind in Ukraine, was also struck in Poltava. These two regions account for the lion's share of domestic production.

Ukraine has lost around 40% of its gas production due to these attacks. Given these severe losses, will there be enough gas to last until the end of the heating season? Ekonomichna Pravda sources in the gas industry say the outcome will depend on air temperature, production levels and consumption rates.

To cover the deficit caused by the recent attacks, Ukraine plans to import around 800 million cubic metres of gas in February-March. However, this will come at a significantly higher cost, as gas prices in the European Union are currently consistently above US$500 per thousand cubic metres, compared to the US$300-350 range seen in the summer.

Experts believe that, under the current circumstances, there should be enough gas to last until the end of the winter season. Nevertheless, additional measures will be necessary if temperatures plummet, consumption rises and Russian strikes cause further damage. These may include restrictions on industrial consumption or the temporary closure of schools and nurseries.

This heating season is also likely to end earlier. Before the war, it typically ended on 15 April, but this year, heating may be switched off closer to the end of March in order to conserve fuel.

The most important thing is that Ukraine is not facing any gas cut-offs, in stark contrast to what Russian propaganda claims. There will be no catastrophe or apocalypse in the gas sector.

Fuel market: all stable

Russian forces began targeting Ukraine's electricity infrastructure in the autumn of 2022, while attacks on oil refineries and depots began on the very first day of the invasion.

Following the immediate loss of fuel supplies from Russia and Belarus, Ukraine's petroleum products market had to swiftly find alternatives to replace over 90% of its diesel imports and around 50% of its petrol.

A real large-scale crisis engulfed Ukraine in May 2022, with kilometre-long queues at petrol stations and restrictions of 10-20 litres of fuel per vehicle. However, the country completely switched to supplies from the European Union in record time.

Initially, Ukraine procured fuel regardless of cost, but fuel supply chains began to reduce prices as the crisis subsided. By the third anniversary of the full-scale invasion, the oil products market had been stabilised, achieving its strongest position since the war began.

"Indeed, the oil products segment of the energy market is the most stable today. There is no shortage; we have a consistent fuel surplus on the market. This is particularly evident in the retail segment, where we have been operating with minimal mark-ups over the past year," said Serhii Kuiun, Director of A-95 Consulting Group, a Ukrainian analytical company researching the oil market.

Kuiun believes that Ukraine has an ample supply of fuel and a diversified distribution system, with petroleum products being delivered consistently by both rail and road.

On the bright side, the number of supply sources is decreasing, and speculative mark-ups for Ukraine have all but disappeared.

"Traders rushed to secure every drop of fuel in 2022-23, but the situation changed last year. The market began to opt for the most profitable options and make deals under the best terms.

When demand was at its peak in 2022, the mark-up for Ukrainian traders sometimes reached 100% of the price, but this is no longer the case and we now have the lowest cost possible under these conditions," the expert adds.

Little change in fuel prices is expected in Ukraine over the next month or two. Any fluctuations will largely depend on global oil prices.

"Trump has repeatedly emphasised his desire to reduce oil prices and, as a matter of fact, it can be done. If the cost of a barrel falls to US$60-65, our price [per litre of fuel] will drop by UAH 7-8 [approx. US$0.16]. The crucial factor for us is that Russia would earn less from its exports, which would impact its ability to continue its war against Ukraine," Kuiun concluded.