01.05.2026
At the Energy Club forum “Distributed Cogeneration – 2026: Barriers to Energy Resilience and Urban Survival”, held on April 28 in Kyiv, the Director of the Municipal Heating Company (MHC) “Cherkasyteplokomunenergo,” Pavlo Karas, delivered a tough, systemic, and at times uncompromising position on the real state of the Ukrainian energy sector. His speech was not theoretical; it was the talk of a practitioner who works daily with heat, generation, and urban survival under war conditions. The speaker not only outlined the industry’s key problems but also directly pointed to failures in state policy, the absence of a market, and a critical undervaluation of the role of heat supply.
The key thesis of the speech was the impossibility of considering the electricity sector separately from heat supply. According to Pavlo Karas, ignoring this connection is a fundamental error in state planning: “The main drawback of energy system planning is related to the fact that it fails to account for the need to provide people with heat.”
The head of “Cherkasyteplokomunenergo” emphasizes that the world’s most efficient energy systems—primarily Scandinavian ones—are built on a symbiosis of heat and electricity, where distributed generation, mini-CHPs, biofuels, and storage systems operate as a single model. Ukraine, he says, still lives in a paradigm where heat is secondary.
Cherkasy’s practical experience demonstrates a different approach. The city has created a backup system that allows the thermal infrastructure to be maintained even in the event of a total gas blackout. As Pavlo Karas emphasizes, even a minimal generation reserve can save the system: “10% heat generation at minus 20°C prevents the system from freezing. This is a critical factor that is somehow ignored in resilience plans.”
He admits that using diesel fuel is not an efficient solution in peacetime, but in wartime conditions, it is a necessary tool for ensuring basic security.
Speaking about the future, Pavlo Karas dismisses “fantasy scenarios” like hydrogen or small modular reactors in the near term, focusing instead on technologies that are already available: “We must base our actions on reality. Energy storage is the most optimal option, and I am already installing it.”
According to him, combining generation with storage creates a flexible system capable of operating in island modes and balancing loads. In Cherkasy, a model is already being implemented where cogeneration units work in tandem with storage, effectively forming “energy islands.”
Another key direction is biofuel, specifically wood chips. Pavlo Karas identifies it as a basic condition for Ukraine’s energy survival in the medium term. At the same time, he warns of the risks of losing this resource due to restrictions in the forestry sector and the lack of a market. According to him, the situation is already approaching a critical point: access to raw materials is difficult, and systemic solutions are absent.
Separately, the director of MHC “Cherkasyteplokomunenergo” points out that even existing capacities can be transformed. Specifically, coal-fired stations, following the example of European countries, can be modernized for biofuels or waste, providing a chance to utilize existing infrastructure instead of losing it entirely.
The most biting part of the speech was dedicated to state policy. Pavlo Karas directly named the key barriers to development: “There is a fundamental evil—PSO (Public Service Obligations) and the moratorium on tariffs.”
According to him, the current model not only distorts the market but also effectively blocks the development of generation, investment, and even the operational activities of district heating companies. He is particularly critical of the role of NJSC Naftogaz of Ukraine, pointing to non-transparent pricing and the absence of a real gas market.
The speaker also highlighted the paradoxes of the system: municipal enterprises lack access to a competitive resource market while bearing obligations to state structures, leading to debts, seized accounts, and disrupted winter preparations.
Another systemic challenge is the public perception of energy resources: “Society does not perceive heat, electricity, and water as a commodity. But they are commodities.” Without changing this paradigm, any market reforms will remain formal, Pavlo Karas is convinced.
The speaker’s final conclusion was crystal clear: “The key problem is not tariffs and not the difference in tariffs. The key problem is the lack of a market. And this market must have no exceptions.”
Pavlo Karas’s speech became one of the most candid signals from industry practitioners: energy resilience is impossible without systemic changes that go far beyond technical solutions. It is about changing the very logic of the industry’s functioning—from manual management and a pseudo-market to a transparent, competitive model where heat and electricity are viewed as a single system.
And the main message between the lines: there is no more time for deliberation. Decisions will either be made, or their consequences will have to be lived through in future crises.
