Russia has knocked out half of Ukraine's power generation. Ukraine buys US LNG

Russia continues its coordinated campaign to destroy energy facilities across Ukraine. So far, it has knocked out more than half of Ukraine's power generation, causing the worst electricity outages since the start of Russia's invasion in 2022. Ukraine is now trying to secure energy supplies and rebuild its infrastructure ahead of next winter, including by buying LNG from the US, the Financial Times reports.

Russia launched its sixth massive attack on Ukraine's critical energy infrastructure since the beginning of 2024 on 1 June. The attack is part of a coordinated campaign to destroy energy facilities across Ukraine. Russian attacks have caused the worst electricity outages since the start of Russia's invasion in 2022.

Before 2022, Ukraine's power plants had an installed capacity of approximately 55 GW, one of the highest figures in Europe. Current available capacity has fallen below 20 GW because of bombing and Russian occupation. As a result, the country is facing a significant electricity shortage, with electricity available in major cities and suburbs for only a few hours a day. Water and sewage systems often stop working, while mobile coverage is limited or entirely unavailable.

The first Russian airstrikes on Ukraine in the winter of 2022–23 targeted the electricity distribution grid, which experts say is relatively easy to repair.

Russia has now changed its tactics, using a strategy of initial drone attacks to overwhelm air defences, followed by precision-guided missiles to damage key energy facilities. The focus has shifted from substations to power generation at the plants themselves.

Prime Minister Denys Shmyhal said the consequences of Russian attacks on Ukraine's energy sector would be long-lasting, meaning that saving energy would become part of everyday life in the coming years.“Our goal is to save energy at every level: from large businesses to individual houses and apartments,” he said.

Compared with the winter of 2022–2023, when power outages affected the entire country and electricity was available for only five to eight hours a day, the current impact is even worse.

Although Ukraine can import electricity from Europe, transmission capacity is limited, even though it has been increased from 1.7 GW to 2.3 GW. Renewable sources will not provide an immediate, sufficient solution either. Rebuilding or repairing heating plants and power stations takes years and billions of dollars in investment, assuming they can be protected by air defences.

As a result, Ukraine will become uninhabitable this coming winter, a risk that Europe and the rest of the world are underestimating, Victoria Voytsitska and Olena Halushka of the Anti-Corruption Action Centre (ANTAC) and the International Centre for Ukrainian Victory (ICUV) told Euractiv.

European countries have so far donated 120 shipments of critical energy equipment and tools to support and repair Ukraine's energy system. Ukraine has also increased electricity imports from the EU and brought more gas-fired power plants into operation. Without any action, the population will probably have only two to four hours of electricity a day in January.

Ukrainian authorities have doubled electricity prices to fund reconstruction, but they are still below market rates. The country is trying to increase its use of green technologies, which requires foreign investment that is difficult to attract given the country's risk profile.

It is also important to equip major cities with industrial diesel generators and develop a decentralised energy system. Saving Ukraine's energy system will be a key topic at the Ukraine Recovery Conference in Berlin and at the G7, Peace Formula and NATO summits.

The end of the Russian transit deal and the purchase of US LNG

The gas transit contract through Ukraine, which Kyiv signed with Russia in 2019, expires at the end of the year and, given the current situation, Ukraine does not plan to extend it. Ukraine will therefore have to look for alternative suppliers.

Several months before the Gazprom transit agreement expires, US company Venture Global signed the first major deal to supply liquefied natural gas (LNG) to Ukraine, strengthening its energy security.

The move supports the Biden administration's goal of increasing energy exports to Eastern Europe and limiting Russia's influence. Venture Global will begin shipping LNG to Ukraine this year, marking Ukraine's first direct purchase from the US. DTEK, Ukraine's largest private electricity producer, will start buying LNG from Venture Global at the end of the year, with supplies continuing through the end of 2026.

The gas will be supplied from Venture Global's Plaquemines facility on the Gulf Coast in Louisiana and will supply Ukraine and other Eastern European countries. Venture Global, based in Arlington, Virginia, plans to ship gas from terminals on the US Gulf Coast across the Atlantic to several European ports, including Greece, which is connected to Ukraine by pipeline.

It is unclear how much of Ukraine's gas demand the deal will cover. Ukraine's energy minister said in January that he expects domestic demand to be met this year through domestic production.

The end of the transit deal will also affect the Central European region. Gas continues to be imported through Ukraine into Slovakia, and partly into the Czech Republic, while Austria and Hungary are heavily dependent on it. Europe is discussing the possibility of transiting gas from Azerbaijan, which would also secure some revenue for Ukraine from transit fees.

For the Czech Republic, the end of the transit deal does not pose a major problem, as it can import gas through Germany. However, it significantly reduces the country's role as a transit country.