Russia’s war on Ukraine causes $56 billion damages to Ukraine's energy sector

This was reported by the Kyiv School of Economics (KSE).

According to KSE estimates, direct losses amounted to more than $16.1 billion, of which $8.5 billion was lost due to the destruction of electricity generation facilities, $2.1 billion due to damage to main power lines, and $3.3 billion due to the destruction of oil and gas infrastructure.

“During the full-scale invasion, approximately 18 GW of electricity generating capacity was occupied, including Europe’s largest nuclear power plant — the Zaporizhzhia Nuclear Power Plant. Additionally, the Kakhovska and Dniprovska hydroelectric power plants and the Zmiivska and Trypilska thermal power plants were completely destroyed.

Private thermal power plants, including the Ladyzhynska, Burshtynska, Dobrotvirska, Kurakhivska, Kryvoriz`ka, and Prydniprovska thermal power plants, suffered critical damage of over 80%. Approximately half of the high-voltage substations for electricity transmission were damaged. Russian forces essentially destroyed all oil refineries in Ukraine, as well as a significant portion of the infrastructure for storing oil and petroleum products,” the report said.

The researchers estimated the indirect losses of the energy sector at almost $40.1 billion.

“The majority of this amount stemming from lost revenues of energy companies — $39.6 billion. The remaining $0.5 billion is attributed to the costs of debris removal and dismantling of damaged facilities,” KSE said.

The restoration of Ukraine’s energy sector requires substantial financial investment, preliminarily assessed by the KSE analytical team at $50.5 billion. 

The restoration needs of the power energy industry are estimated at a total of $33.8 billion, including $29.3 billion for generation capacities. 

Another $4.6 billion is needed to restore the electricity transmission and distribution infrastructure. The estimated cost of restoring the oil and gas sector is $14.8 billion, and the district heating sector is $1.4 billion, excluding the restoration of large combined heat and power plants.

The analytical team of the Kyiv School of Economics (KSE) said that the assessment of damages and losses was carried out in accordance with the World Bank methodology, taking into account a significant amount of microdata collected by relevant government authorities, local civil-military administrations, and energy companies since the start of the full-scale war, as well as open sources due to limited access to data because of the high risk of disseminating security-sensitive information.

• Earlier, Prime Minister Denys Shmyhal said that 73% of Ukraine's thermal power plants were destroyed or damaged due to Russian attacks.