16.09.2026
On September 17, at the Energy Club forum “Enerhiia Svobody: Resilience and New Opportunities for the Energy Storage Systems Market in Ukraine”, one of the key issues will be the future of BESS in Ukraine: from the economics of individual projects to the role of energy storage systems in a decentralized energy system.
Among the forum’s key speakers is Yuriy Podolyak, General Director of IKNET, an engineering company that works with full-cycle energy projects and has significant experience in the field of energy storage systems. IKNET supports projects from the development of a concept and feasibility study to design, connection, and commissioning of facilities.
In his presentation, Yuriy Podolyak will speak about energy hubs and energy storage systems as an element of the new architecture of Ukraine’s energy sector.
Ahead of the forum, in an interview with Energy Club journalist Olena Karpachova, Yuriy Podolyak spoke about whether BESS projects really have an extremely fast payback period today, why it is important for an investor to choose the right moment to enter the market, and what mistakes can undermine a project’s economics even before its launch.
The interview covers the technical limitations of Ukraine’s grids, connection problems, equipment selection, regulatory “swings”, and realistic planning horizons for investors. It also discusses why, in the expert’s view, the future lies not with an individual battery, but with energy hubs, microgrids, and energy islands, where solar, wind, storage, flexible generation, and the consumer operate as a single system. And, ultimately, why in the energy sector of the future, each individual element makes sense only when it is properly integrated into this system.
— Mr. Podolyak, following the rapid development of the energy storage systems market in Ukraine, BESS are gradually moving from the category of backup equipment into a full-fledged energy asset. How do you see the Ukrainian energy storage market today: what stage of development are we at?
— At the peak of this development. And it is not simply a peak, but a certain imbalance, because the ESS segment accounts for 80–90% of all investments in the energy sector. So this is a peak, and we will see its first decline as early as 2027.
— What business models for energy storage systems can already be economically justified in Ukraine today? Is this primarily about operating in the balancing market and price arbitrage, or could comprehensive solutions for enterprises and communities become more promising?
— In general, when we talk about BESS, or ESS in Ukrainian, we need to distinguish between two segments: investment, where BESS themselves are an investment, and BESS as a system that helps communities or consumers. These are two completely different segments.
If we are talking about investment, then a free market operates here. As long as there is a large difference in summer between the cheapest and most expensive electricity – from less than UAH 1 to UAH 15 per kilowatt-hour during a single day – the payback period can be very short. Accordingly, this is what is causing the current boom. Will it always be like this? No.
I think this will last until 2030 at most, when the “green” tariff expires. Then, based on solar and wind power plants, owners will start building ESS because it will become economically and technically feasible for them. Accordingly, in 2030 the market will begin to develop differently.
At present, no one is entering the balancing market because payment delays amount to more than a year. An investor has to charge the battery system with their own money, and that money will return, at best, in a year. So this is currently a non-functioning market.
As for price arbitrage, it is a completely free market. But this market will constantly change. Unfortunately, military actions remain the key factor affecting Ukraine’s energy sector today.
As for communities and enterprises, this segment is only beginning to develop. Consumers are still gradually coming to understand the technical and economic advantages of ESS.
— What has the greatest impact on the payback of BESS in Ukraine today? How realistic are the investment return periods declared by developers of such projects, and under what conditions does storage truly become a profitable asset?
— Any market that is just emerging faces problems – legal, economic, and technical. But, on the other hand, if everything goes successfully, the first participants also receive a large profit. At present, everyone who entered the summer season of 2026 prepared has already capitalized quite well.
Therefore, one needs to enter this market at the right time. Those who are investing heavily now will shape their influence on price changes in the DAM as early as the next season. Accordingly, profitability will constantly decrease.
In addition, the cost of equipment has changed significantly in recent years. Three years ago, it was EUR 200,000 per MWh, then EUR 180,000, 160,000, 150,000, 100,000 and even less. And this change is also of great importance for the project economics.
But in the enterprise segment, the profitability of ESS operation cannot be calculated solely as storage. It needs to be calculated comprehensively: the efficiency of the solar power plant, the gas-piston plant, and the battery storage system. Because each system on its own does not have the advantage provided by a properly created energy hub at an enterprise.
— From a technical point of view, how should the parameters of an energy storage system be properly determined for a specific facility? Do investors often make mistakes by choosing battery power and capacity without analyzing the hourly consumption profile and grid operating modes?
— You know, for some reason, investors and consumers almost always think that this is a simple thing: it is enough just to buy what the manufacturer offers, and everything will be fine. Almost no one thinks about the generation, consumption, and balancing profile using ESS.
Therefore, unfortunately, there is almost no such market. We often become crisis managers when something has already been purchased and either does not work at all or does not work as expected. And then consumers start looking for companies that can sort everything out and establish proper operation.
And our first question is: why did you buy it with exactly these specifications? As a rule, we hear in response: “Because it was in stock” or “Because it was cheap.” And the fact that this equipment is unsuitable or inefficient specifically for this consumer becomes clear only after it has been purchased and installed.
Therefore, unfortunately, there is no analysis, no engineering, and consumer companies do not understand what the creation of mini-energy systems means. And this is like Ukraine’s unified power system, only on a miniature scale. It includes generation, balancing, distribution, control, and automation. And, first and foremost, it is a complex system.
IKNET conducts such an analysis, which is why we advise clients not to rush into choosing equipment until we develop a concept specifically for the particular enterprise and understand what reconstruction needs to be carried out. Because, as a rule, the grids may date back to Soviet times and require substantial reconstruction. And this directly affects CAPEX and the cost of the entire project.
In general, it looks like this: we want to buy a Ferrari, but with the “automation” of a Zaporozhets.
— You work with energy and industrial projects comprehensively. What typical mistakes do you see today in the implementation of BESS projects in Ukraine – from design to connection and subsequent operation?
– Again, there are two market segments. If these are investment projects, then the first traditional and key mistake is connection. And there are many nuances here.
We understand that storage operates both in consumer mode, meaning it takes electricity from the grid, and in generation mode – supplying it to the grid. Accordingly, the grid to which we connect must have such a capability. This means that the substation must not be loaded with consumers or overloaded with generation. There are few such substations. And few people conduct this analysis or understand these nuances.
Moreover, our legislation is not perfect in this respect. That is why we encounter this widespread mistake. Distribution system operators are often also not ready for such connections, and this directly affects project implementation timelines.
The second mistake is equipment selection. You cannot simply buy a Chinese manufacturer’s product. You need to choose equipment represented in Ukraine by a well-established company capable of providing service. If it is an official, established representative, everything will be fine. If it is a company that has just appeared and does not offer servicing, this can become a key mistake.
We also often see mistakes in the development of the business model: the systems’ own needs and their degradation are not taken into account. In other words, at the planning stage we have certain indicators, while in reality we get different parameters on the revenue side.
If we are talking about the consumer or active consumer market, it is necessary to configure everything correctly: combine consumption, generation, and storage, provide technical balancing, carry out reconstruction properly, and install automation that will control all of this.
IKNET directly deals with this: we conduct audits, develop and implement projects. Our product is the end result, starting with the development of the business model and concept and ending with implementation and assistance in generating profit.
We obtain all the necessary permits so that, depending on the selected model, the customer can either save money or earn money.
— To what extent are Ukrainian grids and existing infrastructure ready for the mass connection of energy storage systems? What changes in grid infrastructure and connection rules are necessary for BESS to fully operate as an element of the energy system?
— Today we are experiencing a peak in the implementation of such projects. Is the infrastructure ready overall? Clearly, no. Because 90% of our equipment dates back to Soviet times. There is almost no automation or smart grids.
Storage is a technology of the 21st century. But the grid technological design standards for 35 kV and above date back to 2014. They contain no such terms as ESS, active consumer, or hybrid systems (SPP with ESS). Accordingly, we are designing according to standards that are already morally outdated.
Why do the Ministry of Energy together with Ukrenergo not want to change this? It is unclear to me…
There is an understanding of what can and cannot be done in the grids. For example, generation can be connected to Ukrenergo grids at the 35 kV voltage level, while ESS cannot be connected to Ukrenergo’s 35 kV grids. Why is the regulatory framework like this? Why this difference?
And there are many such questions. Therefore, it cannot be said that we are ready. But we have no choice, so we will all work together based on the actual situation.
But there is also good news: our institutions respond quickly to changes – both the NEURC and the Verkhovna Rada, as well as the Ministry of Energy, which is currently working quite well and systematizing all the issues.
We cannot plan everything in advance, but at least we can respond quickly to changes.
— The regulatory environment for energy storage is gradually changing. What legislative or regulatory decisions, in your opinion, is the market most lacking today so that investors can forecast their projects 10–15 years ahead?
– On the one hand, changes are taking place, and that is good. On the other hand, there are decisions that frighten investors quite strongly.
For example, the cancellation of the preferential natural gas tariff for gas-piston and gas-turbine systems. At the same time, price caps were removed from the DAM. These two changes more or less compensate for each other, but investors heard primarily about the cancellation of the preferential gas tariff. Therefore, today the investment attractiveness of new gas generation projects is effectively zero. This is already creating a problem for the development of flexible generation.
Another example is the NEURC decision on the cost of ESS connection. From September 1, the rate was significantly increased – approximately twofold. Then a transitional period was introduced, under which the current procedure for calculating the connection fee remains in place for ESS commissioned or launched by January 1, 2027.
The question arises: how is an investor supposed to go through the entire process from obtaining technical specifications to connecting the facility within a few months? Such decisions simply stop projects because everyone calculates the money and the risks. Especially now, when storage facilities are already becoming targets of missile and Shahed attacks.
Therefore, planning for 10–15 years is impossible today. A maximum of 3–5 years, and that is already very good. We simply do not know what will happen in 10–15 years.
At the same time, our legislators and regulators must take into account the real state of the market and the situation in the country. We cannot constantly create additional barriers for investors who invest money in the energy sector during the war.
We really have an extremely dynamic system. Something changes every week: projects are implemented or halted, operating facilities come under attack. How can one forecast what will happen in three, five, or ten years under such conditions? It is practically impossible.
Therefore, the key task today is not to prevent investors from investing money in the energy sector. And such periodic regulatory “swings” are unfortunately taking place.
— Can the combination of solar or wind generation with storage become one of the most promising areas of Ukraine’s new energy sector? Which configurations of such projects do you consider the most effective from a technical and economic perspective?
— We are developing, and you cannot simply give a medieval person the keys to a car. They have to go through a certain path. We are going through that path as well.
And the end point of this path, in my opinion, is the creation of energy hubs capable of operating as energy islands. An energy hub is a combination of solar, wind, ESS, and gas-piston or gas-turbine systems in various combinations.
Such a combination provides both efficient economics and stable operation. Gas-piston generation will work more in winter, storage together with solar – in summer, while wind is a shoulder-season resource. Such hubs can be connected to large consumers or industrial zones.
And the mandatory condition is the creation of energy islands. And now, unfortunately, no one is moving much beyond the very term “energy island”.
What does this mean? For example, an energy hub is connected to an external grid, say, through a certain substation that has the “right” automation. When the power supply to this substation from the external grid is disconnected, the energy hub ensures the operation of the local distribution grid and the consumers connected to it using generation and ESS.
This is the future. And we are still far from it – both in legal, economic, and technical terms.
— What changes in the Ukrainian energy storage market do you consider inevitable in the coming years? Which technologies, business models, and projects, in your opinion, will have the greatest chances of success?
– New markets or submarkets for energy storage systems will definitely emerge because these systems are not standing still either – they are developing technologically.
Why did such rapid BESS development begin precisely over the past two years? Because their production cost fell to an economically viable level, when government financial support is no longer required, as was the case with “green” tariffs.
Now neither solar nor wind generation, nor BESS, require such support. Therefore, development will continue.
In the coming years, we at least need to master the markets that already exist: supporting the energy system (the balancing market and ancillary services market), creating energy islands, and working with consumers as part of energy hubs.
All of this is already happening; it is simply at different stages of development. What will happen next – we will see. It is very difficult to say what will happen in five years, especially since the technology itself is constantly developing.
The Ukrainian energy storage market is still only going through the first stage of its development. Today, investors are learning to calculate BESS economics, businesses are learning to properly integrate storage into their own energy systems, while the state and regulator are adapting the rules to technologies that, just a few years ago, practically did not exist.
The next step is much more complicated. It is the transition from individual storage systems to energy hubs, microgrids, and energy islands capable not simply of storing electricity, but of balancing generation, consumption, and the grid.
It is precisely the speed with which Ukraine can make this transition – technically, economically, and regulatorily – that will determine whether energy storage systems become a separate segment of the energy market or transform into one of the foundations of a new decentralized energy sector.
