Can Ukraine become Europe’s green energy hub while expanding its nuclear capacity?

Ukraine’s rebuilding efforts will rely on Western aid and foreign investments. The country’s postwar path will therefore be determined not only by Kyiv, but also by Washington and Brussels, writes Iryna Nesterenko. While reconstruction of Ukraine’s energy infrastructure is crucial, the country is torn between the economic benefits of nuclear technology, and its national security risks

Ukraine has long been among the top ten countries with the highest nuclear generation capacity. Its national electricity mix contains over 50% nuclear energy. Unsurprisingly, nuclear power is a key component of Ukraine’s plans for postwar reconstruction.

At last year’s COP28, Ukraine committed to an initiative aimed at tripling global nuclear energy capacity by 2050. This is clear evidence that the country recognises nuclear power as key to achieving its goal of net-zero emissions. However, the future of nuclear power in Ukraine remains uncertain. It raises obvious security concerns, and the (often conflicting) demands of foreign donors are a source of geopolitical tension.

Current struggles and future aspirations

Since Russia’s full-scale invasion in February 2022, Ukraine’s total generation capacity has decreased by about 50%. The country has suffered severe damage to its energy infrastructure, in particular the occupation of the Zaporizhzhia nuclear power plant.

Ukraine currently faces severe energy deficits, and an urgent need to reconstruct its war-ravaged infrastructure. In times of war, nuclear energy proved one of the most reliable sources of electricity production. The country thus sees nuclear power as vital to its energy portfolio. About 60% of the electricity currently produced in Ukraine comes from its nuclear power plants.

Ukraine has relied on nuclear energy for electricity production throughout the war, and sees nuclear power as vital to its ongoing energy portfolio

However, Ukraine’s aspirations to join the EU are pressuring the country to align its energy policies with European norms. This has compelled Ukraine to bolster its renewable energy capacity significantly. Heavily dependent on fossil fuels, Ukraine must pursue decarbonisation across all economic sectors to align with the European path.

The EU regards electrification across all sectors, such as transportation and residential heating, as one of the most effective means of decarbonisation. Ensuring robust electricity generation capacity is therefore crucial for Ukraine’s future. However, in the years to come, tensions might arise from diverging priorities and ideological positions on nuclear power. As Ukraine attempts to restore and expand its electricity production capacity, it must make urgent decisions on the design of its energy system.

US influence: business opportunities with a pragmatic touch

The United States is shaping the postwar trajectory of Ukraine’s nuclear energy infrastructure, with a focus on modernisation and energy security. Key initiatives include partnerships with US firms like Westinghouse Electric Company. This firm is working alongside Ukraine’s Energoatom to build five new AP1000 nuclear reactors with a total value of up to US$30 billion. Such projects aim to boost Ukraine’s nuclear capacity from 13,100 MW to 17,700 MW, reinforcing energy independence and removing reliance on fossil fuels. US Energy Secretary Jennifer Granholm has called this collaboration ‘a new chapter of climate and energy cooperation’, which aligns with shared decarbonisation goals and regional stability​.

Ukraine must balance the need for foreign investment in its energy sector with the desire to preserve its sovereignty

The Memorandum of Understanding between the Governments of Ukraine and the US regarding collaboration on Ukrainian energy system resilience pledges substantial financial support. The US is offering up to $422 million for new energy assistance and an additional $100 million for energy-related aid. However, support is contingent upon Ukraine establishing an independent international supervisory board to oversee Energoatom, the national nuclear energy company. It also requires Ukraine to implement various internal policies and standards.

This conditionality highlights the delicate balance between the need for foreign support for Ukraine’s energy sector and the country’s desire to preserve its sovereignty. Establishing an international supervisory board could safeguard transparency, but it may also constrain national autonomy.

The EU perspective: business opportunities with idealistic vision

EU officials have expressed their wish for an energy system in Ukraine that aligns more closely with European standards. The EU aims to integrate Ukraine into its energy market as part of a broader strategy under the European Green Deal and Global Gateway initiatives. Integration emphasises the development of renewable energy sources, and reduces dependency on fossil fuels, while ensuring energy security. In the short term, the EU has assisted Ukraine through the Energy Support Fund, which has raised €900 million to supply critical equipment such as transformers and generators.

Looking ahead, the EU, its member states, and international institutions, are likely to offer long-term funding and loans to support the reconstruction of Ukraine’s energy sector. The EU is expected to channel these funds into renewable energy projects.

The EU’s long-term hopes are for a more decentralised Ukrainian energy system with a focus on wind and solar power

Given Ukraine’s significant energy production potential, the EU stands to benefit from the additional energy supply, particularly from green hydrogen and biofuels. Studies indicate Ukraine’s future energy system will be more decentralised, with an emphasis on renewables such as wind and solar power.

Ukraine’s perspective: between autonomy and money

The estimated cost of rebuilding Ukraine is a staggering US$486 billion. A substantial portion of this colossal sum will go towards reconstructing the country’s energy infrastructure. Given the scale of these funding requirements, Ukraine may have limited flexibility to choose the precise energy technologies it wishes to incorporate. Instead, the country may need to align its energy plans with the preferences of its international donors and financial backers. As the EU and Ukraine collaborate to transform postwar Ukraine into a European green energy hub, the country may become a testing ground for European concepts and ideas with uncertain outcomes.

To further develop its nuclear energy capabilities, Ukraine must adhere to EU taxonomy regulations while securing long-term private investments.

A recent opinion poll revealed that nearly 80% of Ukrainians support the continued expansion of nuclear power. As the EU adopts a more favourable stance on nuclear energy, Ukraine has robust political and public support to increase its reliance on this contentious energy source.