24.06.2026
In his personal blog, Serhiy Yermilov – Minister of Fuel and Energy of Ukraine in 2000–2001 and 2002–2004, former Head of the National Agency of Ukraine for Ensuring the Efficient Use of Energy Resources, Honored Power Engineer of Ukraine – continues a series of publications on what the 21st century energy system for Ukraine should actually be and what steps are necessary for its transformational transition.
In the second part of the author’s blog, attention is focused on an issue that is often underestimated in strategic discussions about the future of the energy system.
The Honored Power Engineer of Ukraine analyzes how terminology affects the formation of energy policy, regulatory decisions and investment models, in particular in the context of distributed generation, microgrids and aggregators. He separately emphasizes the difference between technical definitions and political interpretations of these concepts and emphasizes that it is the accuracy of terms that determines whether the new energy will be understandable to regulators and international investors. More to come.
Against this background, the discussion is spreading in the opposite direction. As quoted by the Energy Club website, during the energy forum “Energy Decentralization 2026: Generation, Accumulation, Financing” the president of the Public Sector Organization “CIGRE-Ukraine” Oleksandr Svetelyk emphasized: “that it is necessary to determine what decentralized generation is. In the sense that we now put into this concept, it is primarily reserve generation for individual enterprises. We need new projects, new economic relations, new innovative proposals. We have created an aggregator that should, in our opinion, unite everything and provide access to our main dispatcher. We need a unified, single, holistic energy system. If the system is not like this, only reserve generation will work. No islands, no clusters. We use many terms, but there are no projects yet, at least I have not seen them.”
Before moving further on the transformation of the Unified Energy System into a new architecture, I would like to analyze the statement of my esteemed colleague, also because it is a common expression among politicians and individual industry experts, whose opinions are quoted and influence the outcome of strategic decisions.
So, in the course of what Oleksandr Dmytrovych said:
In the professional and regulatory sphere in Ukraine, the term distributed generation is used. This is not just a linguistic difference. “Decentralized generation” is often used by many in Ukraine as a political and economic term, while “distributed generation” describes a specific technical model of placing generating capacities in the network. Therefore, when distributed generation is reduced to the role of “reserve generation for enterprises”, the question arises: is it a normative concept or a certain management concept.
The very word “aggregator” here looks ambiguous. In modern energy, an aggregator is not a dispatching superstructure over the entire system. Typically, an aggregator:
Therefore, the phrase “the aggregator … should unite everything and provide access to our main dispatcher” sounds somewhat strange to a specialist. It resembles the architecture of a “single control center”, while modern energy systems are built as multi-level control systems.
This very wording also raises questions. In a modern energy system, there is no need for each element to directly “access” the main dispatcher.
There is a hierarchy: local installation controller; microgrid controller; network operator SCADA; EMS/DMS systems; dispatch centers of different levels.
The philosophy of modern management is not to concentrate all teams in one center, but to distribute functions and automate decision-making.
The most controversial thesis is: “No islands, no clusters.”
Because:
After large-scale outages in the USA, Japan and Europe, one of the directions of development was the creation of controlled microgrids, rather than increasing absolute centralization.
For me, the most debatable idea is not the idea of a single power system, but the hidden identification of concepts: a single power system = a single control center. In modern architecture, these are not identical things.
You can have:
and at the same time:
This is how, in fact, the concepts of Smart Grid, Microgrid, Virtual Power Plant (VPP) and aggregated distributed energy resources (DER) are developing.
Therefore, the expression “an aggregator that will unite everything and provide access to the main dispatcher” is more reminiscent of the logic of the traditional vertically integrated power system of the 20th century than the architecture of modern digital energy, where management is hierarchical, distributed and largely automated.
It seems to me that the above quotes contain not only a terminological problem, but also a clash of two different paradigms of power system development.
Speaking in the language of standards and modern practice, today the following control objects are increasingly becoming: distributed energy resources (DER), microgrids (microgrid), virtual power plants (VPP), energy storage installations (BESS), active consumerschi (prosumers).
At the same time, the dispatch center does not control each inverter or gas-piston unit directly. It sets restrictions, modes, market signals and requirements for system services. A significant part of the decisions is made automatically at lower levels.
Therefore, the phrase: “the aggregator should unite everything and provide access to our main dispatcher” looks ambiguous also because it is not clear what exactly the author calls an aggregator. In world practice, an aggregator is, as a rule, a market or technological intermediary between many small resources and the system operator. It does not replace the Smart Grid or SCADA architecture.
Even more interesting is the statement: “No islands, no clusters”. Here I see a potential contradiction with the experience of Ukraine in recent years. During massive attacks on the energy infrastructure, many experts began to talk specifically about increasing the survivability of the system through: distributed generation, local power plants, cogeneration plants for communities, the possibility of autonomous operation of critical infrastructure.
That is, the question is no longer only about efficiency, but also about resilience.
And here a fundamental question arises for discussion:
Should distributed generation be considered only as an auxiliary element of the Unified Energy System of Ukraine, or should it become a separate equal layer of the power system with the possibility of local autonomy in emergency modes?
In my opinion, it is around this issue that the real boundary between supporters of the classic centralized model and supporters of the Smart Grid/Microgrid concepts passes.
Ukraine really needs to transition to a new architecture of the power system: Smart Grids, active distribution systems, microgrids, DER, prosumers, storage, V2G, distributed intelligence and cyber-protected digital coordination from the TSO to the grid edge. But this transformation should be based on professional international and regulatory terminology, and not on media metaphors that do not have a clearly defined technical, regulatory and investment content.
The Minister of Energy of Ukraine, Denys Shmyhal, stated that for the complete restoration and modernization of the country’s energy sector, it is necessary to attract more than 90 billion dollars over the next ten years. This means that the understanding of the terms: bankability, regulatory clarity, operator responsibility, investment structure, interoperability, due diligence, standards and many others from the Ukrainian side must coincide with the generally established ones among foreign investors and creditors.
This is not my first such discussion, but I will repeat: if we are talking only about explaining the idea, then we can really say “decentralized generation” or a network of “energy cells”. If we are talking about a state concept, development program, investment package, international financing or regulatory changes, the term must meet completely different criteria.
It should be:
Otherwise, it will not be perceived by banks (bankable concept), but will be a communication metaphor (communication concept).
If these questions are answered with the word “energy cell” — the investor will not understand anything. If they answer through distributed generation, microgrid, local energy node, UZE, managed load, DSO, aggregator, PPA, tariff model and regime responsibility — then a substantive conversation begins.
Once we move to financing, the terminology becomes part of risk allocation. The term is imprecise and means:
Sergiy Yermilov, Minister of Fuel and Energy of Ukraine (2000—2001, 2002—2004), Head of the National Agency of Ukraine for Ensuring the Efficient Use of Energy Resources (2009—2010), Honored Energy Engineer
