15.12.2025
On November 20, Kyiv hosted the Energy Club forum “Energy of Freedom: Resilience and New Opportunities for the Energy Storage Systems Market in Ukraine.” The event united business representatives, investors, regulators, experts, and state institutions. The goal was to develop practical steps for the development of the Battery Energy Storage Systems (BESS) market and to create a transparent, self-balancing, and investment-attractive model for the energy sector of the future.
Ivan Grygoruk, Vice President of Energy Club, while moderating two panel discussions, outlined the key conclusions defining the vector of the industry’s development amidst the war and massive challenges for Ukraine’s energy system.
Summarizing the first panel, “Strategy, Investments, and Business Models: How to Make the BESS Market in Ukraine Profitable?”, Ivan Grygoruk emphasized that the Ukrainian energy system was historically powerful, with a large safety margin, but had low digitalization, as its peak development occurred in the middle of the last century. The war, which has been ongoing for over ten years, has forced adjustments: the repair-emergency mode has effectively become the norm for the energy system’s operation.
“While in peacetime it is natural for the system to operate in three modes—normal, repair-emergency, and isolated on a dedicated load (island mode)—and although such modes have always existed, their role for the consumer has changed critically today,” Grygoruk noted. “The positive news is that some regions and industrial enterprises have the ability to be powered by localized sources—mostly CHPs (Combined Heat and Power plants) capable of operating in isolated mode on a dedicated load. This allows for the maintenance of electricity and heat supply for consumers even during a total blackout.”
Ukraine is moving toward grid digitalization, but slower than Europe. The reasons include the war, lack of sufficient funding, and unreformed tariff setting. The existing RAB-tariff—a mechanism intended to fund the modernization of distribution networks—is effectively not working. Currently, DSOs (Distribution System Operators) require long-term investments in electrical networks, substations, switchgear, SCADA, modern dispatch systems, and smart meters.
“Without state support, we cannot raise the level of digitalization in the short term, because this would impact tariff increases that the consumer must ultimately pay,” noted Ivan Grygoruk.
He expressed hope that after the victory, DSOs will be able to attract long-term, non-commercial loans for grid modernization. This would allow for the correct integration of BESS, solar (SPP), and wind (WPP) power plants into Ukraine’s energy system and, in turn, provide the opportunity to balance peak loads in the intraday schedule.
“When investing a dollar in generation development, it is mandatory to invest a dollar in grid development. We lack this balance, and that is why problems arise for many market participants,” the Vice President of Energy Club remarked.
Ivan Grygoruk highlighted that Ukraine is moving toward the European model: “In some former Warsaw Pact countries, energy systems are also low on digitalization. I faced this challenge personally, as I am currently participating in the design of industrial data processing and storage centers combined with energy storage systems. These will, in particular, work as auxiliary tools for the stable operation of nuclear power plants. Such projects eliminate the need to maneuver the nuclear blocks themselves, which will have a positive impact on nuclear and radiation safety in Europe.”
Summarizing the panel regarding “Bankable” projects—how to finance, legalize, and technically implement BESS—Ivan Grygoruk emphasized that despite the war, issues with improving the legislative and regulatory framework, and technical challenges, Ukraine has finally begun to move toward a modern energy model.
Ten years ago, the integration of new technologies for electricity storage and regulation was questionable—Ukraine had a surplus of thermal generation, which sufficiently guaranteed the participation of players with significant spinning reserves in system regulation. Today, the situation is radically different.
Bank representatives at the forum stated that they view BESS development as a promising direction, despite high risks. “This is our chance to build a new, modern, unified energy system—self-balancing, flexible, reliable, and simultaneously understandable for banking institutions for future investments,” Ivan Grygoruk supported.
He drew attention to the growth of distributed generation volumes: over 1 GW has already been commissioned. Of this, about 300 MW operates within the energy system, while others work for production or own needs at industrial enterprises, are used as backup, or are in the design stage.
Ivan Grygoruk cited several examples of his own realized projects in the energy sector regarding complex technical solutions combining the use of BESS, diesel generators, and gas turbine or combined cycle units at industrial enterprises.
Today, such systems ensure the execution of strategic functions for the country’s economy and defense capability, securing the operation of critical processes even under the conditions of long-term military aggression by Russia.
A separate important topic is the development of Small Distribution Systems (SDS). The state has already launched their creation, and the first ones are preparing for commissioning and obtaining SDS operator licenses. According to Grygoruk, this will become a point of increasing competition for Distribution System Operators (Oblenergos).
In communities where there is no mutual understanding with the DSO, businesses or municipalities are forced to build their own networks. This is an unnatural but typically Ukrainian reaction—”don’t wait for someone to do it for you.” This is exactly how future SDSs are being born today, which will secure critical social infrastructure objects and the vitality of certain communities.
At the same time, such solutions are expensive, and their roles are currently closer to providing emergency assistance to consumers than to a normal operational model. However, over time, there will be SDS operators that are highly competitive—for example, industrial parks.
The moderator confirmed that the regulatory framework for connecting BESS and distributed generation is slightly outdated, particularly the Distribution System Operator Code, Electrical Installation Rules (PUE), and Technical Exploitation Rules for Power Stations and Networks.
He emphasized—as he also participates in the development of regulatory documentation—that updates are happening, albeit slowly. He noted the process is complex due to:
The situation is similar in Europe: grid digitalization is also insufficient there, but EU governments have already updated grid development strategies and established both investment requirements and funding sources.
Due to the war, foreign investors are waiting for risk reduction, as investment insurance in wartime is extremely expensive. However, they are closely watching the Ukrainian market, seeing successfully implemented cases and the readiness of businesses to work despite uncertainty.
Ivan Grygoruk forecasts the development of a range of related directions:
His key thesis: “The main thing is to look forward with hope, not to give up, and to work hard building the future together.”
