Renewable energy development in Ukraine has the potential to contribute not only to its national energy security but also to the European Union’s energy diversification goals, given the country’s considerable renewables potential. However, with Ukraine’s renewable energy sector facing multiple uncertainties, mainly due to Russia’s ongoing attacks on energy infrastructure, the EU’s continued support is crucial.
As a country with a territory larger than any European Union (EU) member state, significant natural endowments (particularly wind, solar and biomass), and a low population density, Ukraine is a favourable environment for renewable energy development. Its renewable energy sources (RES) potential theoretically stands at 5.06 million GWh/year of renewable electricity generation (while renewables produced 1.21 million GWh in the EU in 2023). The RES share in electricity generation started rapidly growing in 2009 when the feed-in tariff (FIT) was introduced to allow producers to sell renewable electricity at fixed rates significantly higher than the market price. Although the share of renewables in Ukraine remains relatively low compared to EU levels (9.8% in electricity generation) and the country faces war-related security risks, this potential could be further developed with a favourable legislative framework and sufficient investments. The EU’s support, as Ukraine’s largest renewable energy trade partner, could be key in that regard.
The importance of renewable energy development for Ukrainian and EU energy security
With much of Ukraine’s highly centralised power system destroyed by Russian attacks, it is vital to “build it back better” and encourage the inclusion of renewable technologies in ongoing and future energy projects – a process already underway. First, the launch of many small-scale RES power plants, which can operate independently from each other and be distributed more equally across state territory, will guarantee a more stable power supply despite possible future attacks and help mitigate the 6 GW power deficit. Second, the green energy transition will contribute to Ukraine’s long-term energy security. Due to reliance on fossil fuels, Ukraine has long been subject to disturbances in energy supply (e.g. with the so-called ‘gas wars’ with Russia) and volatility of prices on energy imported from the EU. Third, Ukraine’s energy security will be reinforced significantly through its integration with the EU energy market, for which Ukraine must implement, among others, the EU’s renewable energy acquis, including the Renewable Energy Directive II and the Renewable Energy Directive III provisions.
Considering its significant RES potential and large landmass, Ukraine could eventually scale up its production and supply renewable energy to EU member states at relatively low prices. As the EU is on a firm decarbonisation trajectory, and seeks to enhance its energy security and independence through partnerships and agreements with third countries, it has a strategic interest in supporting Kyiv in its RES development efforts and integrating Ukraine into the European energy network. Ukraine’s substantial agricultural sector and extensive gas pipeline network position it as a prominent biomethane exporter. This gives Kyiv the potential to cover around 20% of the EU’s biomethane demand by 2030 and thus reduce EU member states’ dependency on Russian pipeline gas, currently supplied to the Union via TurkStream, given that biomethane and natural gas are chemically nearly identical. With the procedure for customs clearance recently adopted in Ukraine, the first exports from the Ukrainian company Vitagro already took place, with 68 Mm3 of biomethane delivered to Germany on 7 February 2025.
Besides, the EU lists Ukraine among the key external partners in renewable hydrogen (GH2) imports in the REPowerEU Plan and the EU External Energy Engagement Strategy. Ukraine is featured in several GH2 projects initiated by EU member states, such as the Central European Hydrogen Corridor (CEHC), providing for GH2 exports to Slovakia, the Czech Republic and Germany by 2030, or the “Ukraine–EU Hydrogen Corridor” initiative. Both projects are currently undergoing feasibility studies.
Ukraine’s renewable energy sector – State of play
Ukraine has recently taken several important steps to improve legislative and market conditions for renewable energy development. It adopted the National Renewable Energy Action Plan for the period up to 2030, and the National Energy and Climate Plan with the goals of achieving a 27% renewables share in the gross final energy consumption and implementing the RED II Directive. Ukraine thus confirmed that renewable energy would constitute a priority for its reconstruction efforts and its commitment to adopting EU norms to improve transparency and efficiency of renewable energy policies, which might attract more foreign direct investment. By including the Action Plan in Ukraine’s Energy Strategy until 2050 and defining targets for different RES, Ukraine demonstrated its long-term commitment to the green energy transition. The government also introduced new RES support mechanisms, namely, renewable energy auctions, the feed-in premium (FIP) as a market price-driven support mechanism to gradually replace the fixed payments model under the FIT, and the net billing model to encourage renewable energy production by private households. Moreover, Ukrainian RES projects did not stop in wartime: e.g. DTEK Renewables is preparing the second phase of the 500 MW Tyligulska Wind Power Plant, co-financed by the Export and Investment Fund of Denmark, whereas the GOLDBECK SOLAR Group formed a joint venture with the European Bank of Reconstruction and Development (EBRD) to develop 500 MW of solar PV in three to five years.
However, many challenges persist for the green energy transition, starting with the security risks linked to the ongoing war. First, Ukraine must rebuild its damaged energy infrastructure and ensure a stable and affordable energy supply while undertaking decarbonisation efforts. Second, there exist some regulatory uncertainties given that Ukraine is yet to adopt many EU renewable energy-related acquis and strategies for certain RES, such as biomethane or renewable hydrogen. Third, the Ukrainian state off-taker for the FIT accumulated debt, which has not yet been repaid due to high tariffs. Consequently, new RES support schemes in Ukraine involving the state off-taker might lack credibility among investors.
These factors combined, there is a considerable lack of private investments in Ukraine’s renewable energy sector, which is essential to implement new renewables projects to reduce the high capital costs and increase the missing flexibility of the national grid and energy storage capacities required for renewable energy development.
Why EU support is crucial to develop renewable energy in Ukraine
The EU’s backing is essential for rebuilding Ukraine’s energy infrastructure and supporting broader green transition efforts. In the regulatory domain, as Ukraine gradually adopts new legislation in line with EU norms and standards, the Union should provide Ukraine with better market access. When Kyiv finalises its register of renewable energy guarantees of origin, the latter should be recognised by the EU once it ensures all the necessary conditions are met to streamline renewable energy imports from Ukraine. Similarly to the CEHC, the EU could designate future cross-border infrastructure projects with Ukraine as Projects of Mutual Interest, under which permitting and certification procedures are considerably accelerated, and additional funding is allocated under the Connecting Europe Facility.
The EU and its member states have helped with funding the renewable energy sector in Ukraine via multiple instruments, such as the Ukraine Facility, the Ukraine Energy Support Fund of the Energy Community, the Hi-Bar Programme, and the Renewable Energy Solution Programme. They have also co-financed international initiatives like the Clean Energy Partnership launched by the G7+. However, this aid falls far short of covering all costs required, highlighting the need for private investments. While this is complicated due to security, regulatory, and market risks in Ukraine, they can be mitigated with EU backing. For instance, the Union could develop and co-finance mechanisms like a clean energy trust fund, which would guarantee investors revenues from renewable energy projects and support renewable energy auctions in Ukraine, at least until the Ukrainian state off-taker regains credibility among investors. If successful, renewable auctions can, together with the FIP, replace the FIT, while in the shorter term, Ukraine could get a loan from the EBRD to settle the FIT-related debt.
Moreover, the EU should pursue a policy of providing guarantees to Ukrainian banks to secure private investments for renewable energy infrastructure development, which was launched at the 2024 Ukraine Recovery Conference under the Investment Framework of the Ukraine Facility. As an option, the EU can mobilise the resources of the European Investment Bank or its member states. For GH2 projects, it could grant Ukrainian producers access to the European Hydrogen Bank once its international part is launched.
Finally, to address the power deficit in Ukraine in a ‘green way’, the EU could co-fund and facilitate the investments in distributed energy resources (DERs), comprising small-scale renewable energy technologies installed by consumers off the grid. DERs can thus contribute to a stable energy supply despite possible future attacks on the energy infrastructure, while the scale-up of renewable energy technologies will subsequently bring down their costs.
These support measures, along with Ukraine’s commitment to the green energy transition, are essential for achieving national energy security and decarbonisation goals. For the EU, renewable energy imports from Ukraine can help mitigate its own energy dependencies. Hence, the Union should not wait until the war ends to start supporting Ukraine’s renewable energy sector more actively.
Olha Bykova is an Academic Assistant at the College of Europe
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