22.08.2025
Distributed generation is no longer a concept of the future, but a new reality for Ukraine’s energy sector. A professional discussion on this topic took place at the Energy Freedom talk show hosted by Energy Club on August 21. Representatives from business, distribution system operators, equipment suppliers, and financial institutions spoke candidly about the progress in implementing distributed generation projects and the barriers market participants face.
The discussion focused on the interim results of project implementation (solar, gas, biogas, cogeneration), the readiness of grids for mass connections, the availability of financing and lending amid military risks, bureaucratic hurdles, and the new role of DSOs in the development of Smart Grids. Experts also discussed the economic models of distributed generation: how to transform it from a mere backup survival tool into a full-fledged business with predictable payback periods and the potential to participate in the ancillary services market.
This meeting was not about theory, but about the real-world experiences shared by the participants.
Ivan Dyriv, the Mayor of Dolyna, stressed that this topic will remain relevant for decades to come. The Dolyna community began working on energy resilience and efficiency at the start of the full-scale invasion, primarily to supply electricity to critical and social infrastructure. The plans include establishing an uninterrupted power supply for residents and businesses. “We are working on a concept for a cellular network in the community, developing a business plan, and modernizing the power grid to operate both within the unified energy system and in an island mode,” the mayor explained. “We have installed three solar stations for the water utility, which has become the first municipal enterprise in Ukraine to sell surplus electricity to the market. Stations with energy storage systems have been installed at the hospital and kindergartens. A local business has built a grid-connected gas generation facility. I am confident that in the future, a significant part of Ukraine’s energy system will operate in a decentralized manner.”
“The key is the technology we will use to restore the Ukrainian energy system,” emphasized Yuriy Bondarenko, First Vice President, Head of the Technical Committee of CIGRE Ukraine, and Head of STC Enpaselectro LLC. He highlighted three main areas: the generating capacities of nuclear, hydro, and thermal power plants, which play a crucial role in balancing Ukraine’s unified energy system; a new level of development for distribution networks, which are expanding with new stakeholders and undergoing modernization; and generators donated by benefactors. Communities have resilience passports, but only 25% of the planned connections have been made due to a lack of understanding of technical specifics. Therefore, all consumer projects must be comprehensive. Implementing all three areas requires significant funding. There is a desire to connect gas generation facilities where opportunities exist. Green generation is changing the nature and operating mode of the energy system, but there are problems with connecting to the Oblenergo grids. For the successful implementation of distributed generation projects, Yuriy Bondarenko is convinced that it is necessary to unite specialists, align the legal framework with EU requirements, and showcase achievements, as Ukraine is not only an agricultural but also an engineering country.
One of the leaders in implementing distributed generation projects is the food and ag-tech holding MHP, which in 2024 commissioned 18 MW of cogeneration units and 15 MW of solar power plants for its own needs. Oleksandr Dombrovskyi, Deputy Chairman of the Board of MHP, President of MHP Eco Energy, and Chairman of the Board of the green platform Global 100% RE Ukraine, spoke about these and other company achievements. He called distributed generation a strategically important topic for Ukraine, both during the war and for post-war recovery and development. “I am absolutely convinced that we are creating a new vision for the Ukrainian Unified Energy System. The pace of distributed generation development is so rapid that it can only be compared to the ramp-up of drone production.” However, a systematic state policy is needed to integrate the Ukrainian UES into the European energy system. This is crucial for industrial and regional development. MHP Eco Energy is developing all segments of renewable energy, allowing for a combination of energy sources depending on consumer needs. The company has commissioned Battery Energy Storage Systems for the energy security of MHP, Huawei, and others. A 60 MW wind farm project is currently being implemented in one of Ukraine’s regions. There are also developments in installing heat pumps that provide heating in winter and cooling in summer. “Today, Ukraine is a European leader in the development of distributed generation. We have every chance to create a new, modern, and powerful energy system,” noted Mr. Dombrovskyi.
Vitaliy Nikolayenko, CEO of Voltage Group, highlighted the demand for gas piston units and cogeneration projects for industry. For the past six months, solar power plants have been installed together with energy storage units. However, the issue of charging these units and many technical aspects remain unregulated, so the regulatory framework needs improvement as the energy market expands. Distributed generation must become the foundation of the unified energy system after the end of hostilities.
Yuriy Podolyak, Director of ICNET, identified three areas for further development: different types of generation, consumer statuses (active consumer, producer, etc.), and government agencies, communities, investors, and businesses. All of them are already showing significant results, which means we are not at the beginning of this journey.
The war has become a driving force for the development of distributed generation in Ukraine, forcing a search for new paths to energy resilience, expressed the common opinion of energy experts, as stated by Mykola Markheva, Head of the Department of Automation and Business Process Optimization at JSC “Ukrainian Distribution Networks”. According to their statistics, the number of connection applications has increased fourfold compared to 2024, with cogeneration units and solar power plants being the most common. However, financial and technical barriers exist. Facilities require reconstruction, which entails significant financial costs for the customer, and as a result, most projects are not realized. Today, DSOs are not just transmitting electricity but are active network managers. Progress requires investment in the development of new technologies.
The meeting participants were unanimous on the need to improve the legal and regulatory framework and, at the current stage, to maintain a balance between centralized and distributed generation, with the further development of the latter and the rebuilding of the Ukrainian energy sector based on the “Build Back Better” principle.
