07.09.2026
Ukrainian energy is gradually changing not only its structure, but also the very logic of its operation. In the new system, it is important not only to produce electricity, but also to store it in a timely manner, move it in time, use it when it is most needed, and ensure network flexibility. Therefore, energy storage systems are increasingly transforming from a “future” technology into one of the key tools for energy sustainability and economic efficiency.
Participants of the Energy Club forum “Energy of Freedom: Sustainability and New Opportunities for the Energy Storage Systems Market in Ukraine” will discuss how this transformation is already changing the Ukrainian energy market on September 17 in Kyiv. The focus of the discussion is not only on BESS technologies, but above all on the conditions under which they can become a full-fledged business asset: state policy and regulation, investments, new business models, work in the electricity and ancillary services markets, integration with renewables and opportunities for Ukrainian business.
One of the speakers at the forum will be Serhii Harmashev, head of Energo Group, a company that works with cogeneration, solar generation and energy storage systems. In a conversation with Energy Club journalist Olena Karpachova, he talks about the market, which has already left the experimental stage behind and is entering the scaling phase, and answers relevant questions: why today it is more correct to ask not “which battery to install?” but “what business model should the battery perform?”, where BESS already demonstrate real economic efficiency, why the future of Ukrainian energy lies in hybrid complexes, and how storage can change the very architecture of the energy system.
– Mr. Serhii, today energy storage systems are called one of the key elements of the new Ukrainian energy system. In your opinion, at what stage of development is the Ukrainian BESS market now: is it already a real business or is it still mainly a preparation for large-scale growth?
– In my opinion, the Ukrainian market for storage systems has already left the stage when BESS was perceived mainly as a promising technology or an experimental direction. Today it is already a real business, which is at the beginning of a very large-scale growth cycle.
We already have operational industrial facilities. One of the most striking examples is the complex of storage systems with a total capacity of 200 MW and a capacity of 400 MWh, which was put into operation in 2025. This was no longer a pilot scale.
Now the picture has changed, and in Ukraine they are talking about gigawatts of new BESS in total capacity. The reason for such interest is economic and security. BESS can simultaneously operate in several segments: arbitrage; RDP; balancing market RDN/VDR; optimization of own consumption; reservation; integration into RES. It is the ability to combine these functions that fundamentally distinguishes BESS from traditional generation.
At the same time, I would say that we have not yet reached a mature market. Now the second level of development is being formed – when BESS is starting to be considered not only by large energy companies, but also by industrial enterprises, RES developers, agricultural enterprises, logistics centers, municipal infrastructure, and others.
And here the philosophy itself changes. Previously, the question was: “Do we need a battery?” Today, the correct question is: “What business model should a battery perform?”
This could be backup, peak load reduction, optimization of electricity procurement, work in the ancillary services market, arbitrage between time zones, integration of solar or gas generation. The strongest projects are those where one asset performs several functions.
Therefore, I assess the current stage as a transition from the early market to scaling. And it is the next three to five years, in my opinion, that will determine the architecture of the Ukrainian storage market.
– The forum is dedicated not only to technologies, but also to creating a transparent energy storage market. What solutions does business today expect most from the state and the regulator so that investments in BESS become predictable and economically attractive?
– For an investor, the main thing is not even that the state creates the most favorable conditions. The main thing is for the state to create long-term, understandable and predictable rules of the game.
BESS is a capital-intensive asset. The investor invests today and returns it over the years. Therefore, the financial model is extremely sensitive to changes in market rules, tariffs, connection conditions and access to individual segments.
I would highlight several key issues.
First – connection to networks. Important changes are currently taking place here. Updated connection mechanisms have come into force since September 1, 2026. For UZE projects that will be put into operation or launched by January 1, 2027, the current approach to determining the connection fee has been retained. In my opinion, thise will help cool the situation for new connections. In parallel, the regulator is working on a flexible connection mechanism, and this may positively affect the overall picture of new connections.
Second – predictability of revenues in the electricity and ancillary services markets.
Third – the clearest rules for an active consumer, when the company simultaneously consumes, generates, accumulates and, under certain conditions, sells electricity. In 2026, the regulator is already significantly updating this model.
Fourth – simplification of administrative procedures. Today, it is sometimes faster to physically install a BESS than to go all the way from the land issue and technical conditions to commercial accounting and full-fledged work on the market.
Therefore, I would formulate the expectations of business very simply: not subsidies, but predictability. When the rules are clear on a 5-10-year horizon, private capital will find cost-effective projects itself.
– Energo Group implements comprehensive projects – from development to commissioning. What are the most common mistakes that companies make when they first think about installing energy storage systems?
– The most common mistake is to start with the choice of a battery, not with a business model.
They may contact us with a request: “We need a 5 MW battery.” My first question: what exactly? Because 5 MW of capacity says practically nothing about the project. We need to understand the required capacity – 5, 10, 15 or 20 MW/h, the number of cycles, the enterprise’s load schedule, the connection point, the charge and discharge mode, the requirements for backup and the markets in which the system will operate.
Another common mistake is to consider only one revenue model. For example, only arbitrage: bought electricity cheaply – sold it expensively. Such a model may look attractive based on historical data, but the spread is changing now and will continue to change as the market fills with BESS and distributed generation systems.
You need to analyze at least:
DDN + VDR + BR + RDP + own consumption + reservation.
And only after that determine the optimal MW/MWh ratio.
Therefore, we are trying to create a stacked revenue model, where BESS can perform several functions.
The third mistake is underestimating the connection point. Sometimes a technologically excellent project becomes economically weak due to the cost of network reconstruction or limitations on available capacity.
Fourth – incorrect modeling of degradation, efficiency, cyclicity, OPEX and cost of capital.
Therefore, the correct sequence for us looks like this:
energy audit → connection point → business model → technical configuration → financial model → equipment → implementation.
– More and more enterprises consider BESS not only as a backup power source, but also as a cost management tool. What is the economic efficiency of such projects today?
– The economics of BESS are formed not so much by the battery as by the algorithm of its use.
The first source is price arbitrage: charging during low-price hours and using or selling electricity during more expensive hours.
Second – the ancillary services market. BESS has a fundamental technological advantage: it responds very quickly to the system operator’s command, so it is well suited for balancing and frequency regulation tasks.
Third – management of the enterprise’s own consumption: peak shaving, peak reduction and optimization of the electricity purchase schedule.
Fourth – integration with own generation.
Fifth – the cost of uptime. For an industrial enterprise, one hour of downtime sometimes costs more than the electricity savings of several days.
Therefore, the financial model of BESS cannot be evaluated only through the formula “battery cost / annual income”.
We must calculate the total economic effect: direct income + savings + avoided costs from downtime + generation optimization.
That is why I consider the most promising multi-service BESS model, when one asset operates in several economic modes at once in our difficult times!
– Energo Group works with cogeneration, solar generation and storage systems. How promising are hybrid energy complexes and why, in your opinion, is the future of Ukrainian energy?
– In my opinion, the future is in hybrid complexes, because this is one of the main directions of development of Ukrainian distributed energy.
A separate solar station depends on the sun. A gas-piston installation has a fuel component and certain optimal operating modes. BESS itself does not produce energy.
But when we combineo solar generation + cogeneration + BESS + EMS, each element compensates for the weaknesses of the other.
For example, during the day, the SPP provides cheap generation. The surplus can be accumulated. BESS covers rapid load changes and peaks. Gas-piston generation provides forecasted capacity regardless of the weather. And the EMS manages the complex as a single energy asset.
As a result, the enterprise receives not just a backup source, but a local controlled energy system. This is especially important for Ukraine due to the need to simultaneously solve three tasks: energy security, economic efficiency and decentralization.
It is significant that the hybrid principle is also considered at the system level: for example, the Ukrhydroenergo project provides for the integration of ESS with hydropower units to provide fast-acting auxiliary services.
– You already have experience in implementing BESS projects and developing business models for them. Can you share examples of solutions that are already demonstrating their effectiveness in Ukrainian conditions?
– From our practice, I see several models that have the greatest potential.
The first is BESS as an independent commercial asset, focused on working in the electricity and ancillary services market.
The second is BESS for an industrial enterprise, where the system simultaneously optimizes consumption and increases energy sustainability.
The third is BESS + own generation.
For example, we are working on the concepts of energy clusters, where one node combines storage, gas-piston cogeneration, and in some cases solar generation. In this case, the key advantage is not in a separate technology, but in the ability to manage the balance of production, storage, and consumption.
We also see the potential of four-hour systems, for example, 5 MW/20 MWh configurations, especially where the BESS is to perform more than one narrow function, but to operate in several modes throughout the day.
Our approach is not to sell the customer megawatts of batteries. We are trying to create an energy asset with specific economic functions.
– One of the key topics of the forum will be energy sustainability of the business. How much have customer requests changed over the past year? What is more important to them today – uninterrupted operation, savings or the opportunity to receive additional income from working in the electricity market?
– The demand has changed significantly over the past year. Previously, the first question was often: “How many hours can the battery last us?” Now, more and more often, they ask: “What will the battery do when there is no accident?” This is a fundamental change in thinking.
A business does not want to buy an expensive asset that 95% of the time simply expects an emergency shutdown. He wants this asset to earn or save money every day, but at the same time remain an element of reservation.
Therefore, today the client needs all three components: stability, savings, monetization.
The priority depends on the enterprise. For continuous production, reliability may be in the first place. For an energy-intensive business, it is optimization of the cost of electricity. For a professional energy investor, it is profitability in the market.
In my opinion, the best BESS project is the one that does not force you to choose only one of these functions.
– Ukraine is moving towards a decentralized energy system. What role will storage systems play in this transformation in the next five years?
– I believe that storage will become one of the basic elements of a decentralized energy system.
Decentralization is not just about installing a large number of small generators. The system must be managed. If we install thousands of solar plants without storage and management, we will get additional generation, but at the same time we can create new problems for the grid.
BESS turns unstable or local generation into a managed energy resource.
I expect that within five years we will see the development of three levels of storage: large-scale systems of systemic importance; regional and industrial BESS; local systems of active consumers. And this will gradually change the very architecture of the energy industry: from the model of “large power plant – grid – passive consumer” to the model of “network of active energy nodes”.
In fact, regulatory changes regarding active consumers, distributed generation and flexible connection are already moving the market in this direction.
– If we talk about different categories of consumers – industry, agriculture, logistics, municipalities – who is most ready to implement BESS today, and where do you see the fastest development of this market?
– I consider industry to be the most prepared today.
The reason is simple: there are simultaneously energy networks, a large volume of consumption, a high cost of downtime, significant peak loads and the opportunity to get a significant effect even from a relatively small optimization of energy consumption. We are currently calculating a potential powerful project forbased on an enterprise with a projected consumption of 80+ MW.
The second promising direction is the agro-industrial sector. Especially enterprises with elevators, processing, refrigeration capacity, biogas or their own solar generation.
The third is logistics and warehouse complexes, especially with large rooftop solar power plants and the gradual transition of transport and internal equipment to electric traction.
A separate huge segment is municipal energy: water utilities, hospitals, boiler rooms, critical infrastructure.
But I expect that the market will grow fastest precisely where three factors coincide simultaneously: expensive electricity + high price of power outages + the possibility of own generation. It is at such points that BESS has the greatest economic value.
– How do you see the Ukrainian market for energy storage systems after the end of the war? What needs to happen today for Ukraine to become one of the leaders in this area in Europe?
– I see Ukraine as potentially one of the most dynamic energy storage markets in Central and Eastern Europe. And this may happen not despite the problems we have today, but to some extent precisely because of them.
Ukraine will have to actually rebuild a significant part of its energy infrastructure. And here it is important not to restore the energy system in the form in which it existed twenty years ago, but to build a next-generation system.
This means more distributed generation, more storage, more automation, digital management, local energy clusters and active consumers.
What needs to be done today?
Therefore, I would formulate the task as follows: we must not simply build the energy system during the war and restore the Ukrainian energy sector after the war. We must use the restoration as an opportunity to move to a new model – decentralized, flexible, digital and sustainable. And storage and distributed generation systems will be one of the foundations of this model.
Today, Ukraine has actually received a forced chance to rewrite the rules of its own energy sector. The war exposed the vulnerabilities of the old model, but at the same time opened up the opportunity to create a new one – decentralized, flexible, digital and able to respond quickly to changes. In this system, electricity is no longer simply produced and consumed: it becomes a resource that needs to be managed.
And that is why the future of BESS is to teach the energy system to save energy, time, money and sustainability. Those who create such solutions today are actually shaping the energy of the future.
