Are there Decentralized Solutions for Ukraine’s Energy Sector? Energy Regulatory Framework Analysis
Type
conference contribution
Date Issued
2025
Author(s)
Abstract
The Russian full-scale war in Ukraine has exposed the vulnerability of centralized energy systems.
Between 2022 and early 2025, around 70% of all Ukraine’s energy facilities was either occupied
by Russian forces, destroyed, or damaged. With extensive destruction of generation facilities and
limited financial resources for rapid reconstruction during wartime, decentralized energy sources
emerge as the most viable solution for uninterrupted energy supply to both population and
industry. Implementing effective energy decentralization mechanisms must be grounded in a
robust regulatory framework. This study examines potential pathways for the Ukraine’s post-war
energy sector development, highlighting opportunities for decentralization and decarbonization.
The paper analyses the current state of Ukrainian regulations in energy sector. The authors
specifically examine the degree of both technological (infrastructure) and organizational
(governance) decentralization of energy sector in current Ukrainian legislation. Methodologically,
the researchers conducted content and thematic analysis of legislation using keywords related to
energy sector decentralization. The study investigates organizational decentralization across three
dimensions: (1) energy market structure, including market liberalization and feed-in tariffs; (2)
citizen involvement through local energy communities, prosumers, and active consumers; and (3)
funding patterns such as citizen investments, crowdfunding, and small-scale investments.
Technological decentralization analysis focuses on distributed generation and renewable energy
solutions like photovoltaic and wind power. The study reveals fragmented legislative initiatives in
energy decentralization. While some progress exists toward market liberalization, the legal energy
framework lacks substantive mechanisms to support decentralized energy models. The research
concludes that despite Ukraine’s gradual legislative adaptation toward energy decentralization, a
comprehensive implementation strategy remains absent. The existing legal framework fails to
establish procedures, mechanisms, and conditions enabling local energy communities,
associations, and independent producers to actively participate in energy production and
distribution. Current provisions primarily support centralized management models rather than
facilitate citizen and local community involvement in energy governance, financing, and production.
Between 2022 and early 2025, around 70% of all Ukraine’s energy facilities was either occupied
by Russian forces, destroyed, or damaged. With extensive destruction of generation facilities and
limited financial resources for rapid reconstruction during wartime, decentralized energy sources
emerge as the most viable solution for uninterrupted energy supply to both population and
industry. Implementing effective energy decentralization mechanisms must be grounded in a
robust regulatory framework. This study examines potential pathways for the Ukraine’s post-war
energy sector development, highlighting opportunities for decentralization and decarbonization.
The paper analyses the current state of Ukrainian regulations in energy sector. The authors
specifically examine the degree of both technological (infrastructure) and organizational
(governance) decentralization of energy sector in current Ukrainian legislation. Methodologically,
the researchers conducted content and thematic analysis of legislation using keywords related to
energy sector decentralization. The study investigates organizational decentralization across three
dimensions: (1) energy market structure, including market liberalization and feed-in tariffs; (2)
citizen involvement through local energy communities, prosumers, and active consumers; and (3)
funding patterns such as citizen investments, crowdfunding, and small-scale investments.
Technological decentralization analysis focuses on distributed generation and renewable energy
solutions like photovoltaic and wind power. The study reveals fragmented legislative initiatives in
energy decentralization. While some progress exists toward market liberalization, the legal energy
framework lacks substantive mechanisms to support decentralized energy models. The research
concludes that despite Ukraine’s gradual legislative adaptation toward energy decentralization, a
comprehensive implementation strategy remains absent. The existing legal framework fails to
establish procedures, mechanisms, and conditions enabling local energy communities,
associations, and independent producers to actively participate in energy production and
distribution. Current provisions primarily support centralized management models rather than
facilitate citizen and local community involvement in energy governance, financing, and production.
Funding(s)
SNF other
Language
English
Book title
Book of Abstracts BUP Symposium 2025
Start page
49
End page
50