Due to a combination of macroeconomic factors such as political instability and lack of a coherent national energy policy combined with slowdown in commercial and industrial sectors due to declining population, Electricity generation in Ukraine is estimated to drop by more than 22.8 TWh in the next decade-according to GlobalData.
Electricity consumption in Ukraine witnessed downward trend in the last decade mainly due to decline in industrial output, which was on a constant decline during 2015-2020 period, leading to a slowdown in electricity demand from the industrial sector resulting in total electricity consumption reach 127.3 TWh in 2020 from 139.8 TWh in 2011.
Over the next decade, demand is expected to decline to 92.7 TWh by 2030 due to a number of factors. One of the most prominent is its declining population. During 2020-2030, population declined at a compound annual growth rate of 0.6 %. Slowdown in the commercial and industrial sectors will continue to impact demand in future.
The country’s political instability and lack of coherent national energy policy make the situation worse, however, the Ukraine electricity market is also impacted by internal changes. For instance, it is highly monopolistic and over regulated. Not only has the country’s electricity market seen turmoil following regulations in 2019 aimed to liberalize the market, but it is also burdened with massive debt. A huge part of the recent debt accumulation reflects non-payment of the feed-in tariff to renewable energy producers.
