04.05.2026
On April 28, in Kyiv, during the Energy Club forum “Distributed Cogeneration — 2026: Barriers to Energy Resilience and Urban Survival,” market participants effectively pinpointed a critical juncture: the Ukrainian energy system requires a rapid increase in distributed generation, yet the state itself is creating conditions under which this becomes economically risky or entirely impossible.
One of the most candid and systemic presentations was delivered by Volodymyr Kudrytskyi — former Chairman of the Board of NPC Ukrenergo and an investor in distributed generation projects. His position is based not on theory, but on practice: what is actually working today and what is stalling the market.
Volodymyr Kudrytskyi immediately dismissed emotional assessments, emphasizing that the key to understanding lies not in belief, but in figures and the system model: “For me, figures are what matter. And before discussing what needs to be done for gas generation to develop, we should determine whether it needs to develop at all.”
According to him, even before the full-scale war, the baseline development scenario envisioned a balanced system:
Today, this model is only further confirmed, but now with new economics.
“If in 2019 storage cost a million euros per megawatt-hour, today it is around 90 thousand. This completely changes the calculations,” the speaker noted.
Therefore, the problem is not in the economics itself: “Today, there is no problem with the economic engine for developing distributed generation.”
Despite the existence of technology and potential, the market is effectively blocked. Volodymyr Kudrytskyi clearly outlined three systemic reasons.
The biggest blow is the sharp and retrospective changes to the rules.
“This is not what stops existing installations. This is what stops those that have not yet been built,” Volodymyr Kudrytskyi emphasized. According to him, investors react not only to decisions but also to signals. Announcements regarding large-scale construction of new baseload capacities immediately undermine the financial models of private projects: “For some, these are just words. For banks, it is a question: show us a model where this pays off.”
As a result, projects are put “on pause,” which is already being confirmed by the market.
The second problem is technical but no less critical. Today, the assessment of connection feasibility occurs under a maximum-load scenario that is almost impossible in real life. The speaker emphasized: “On paper, our grid is filled with installations that haven’t even been built yet. But in reality, there is a capacity deficit.”
Volodymyr Kudrytskyi proposes changing the approach: taking into account the actual operating profiles of generation—specifically when batteries are charging or discharging, and when gas generation is running. This would allow for a rapid expansion of grid access without additional risks to the system.
The third barrier is financial and systemic.
“Today you burn gas, generate electricity, and receive payment 14 months later,” the speaker outlined the problem. “Effectively, this makes the balancing market—the key segment for distributed generation—inaccessible to investors.”
The problem has two components:
“Those who can but won’t should be put in conditions where they will want to,” Volodymyr Kudrytskyi suggested. Without resolving this issue, he stated, not only will generation fail to work, but so will integration with the European market.
The expert separately drew attention to the paradox of cogeneration: heat as a product is valuable, but its price does not reflect its real cost: “Electricity is the primary product you sell, not heat,” he responded to a question from forum participants—heads of district heating companies. Due to distorted tariff setting, it is often more profitable for an investor to build generation without a thermal component, even despite the obvious inefficiency of such an approach. “This thermal component simply does not pay off,” explained Volodymyr Kudrytskyi.
The conclusion of the expert’s speech is clear: the problem is not with generation—the problem is with the rules. Volodymyr Kudrytskyi effectively set the priorities: Ukraine already has everything for the rapid development of distributed generation—technology, investors, and market logic. What is missing is the basic requirement—stable and clear rules of the game.
And as long as: regulatory policy remains unpredictable, grid access remains artificially restricted, and payment discipline remains selective, no energy resilience strategy will be realized in megawatts.
Because today, the energy system is hitting a wall not due to a shortage of resources, but due to a shortage of solutions that work.
