Ukraine to Lose Hundreds of Megawatts as Gas Price Change Halts Cogeneration

Cogeneration Plants Halt Operations Across Ukraine

According to ХВИЛЯ: Starting April 1, 2024, Ukraine's district heating companies (TKE) are halting their cogeneration plants en masse. This decision follows amendments to Government Resolution No. 222, adopted on March 30, which eliminated a preferential price for natural gas for most TKE enterprises. This move will result in the loss of hundreds of megawatts of electricity and increase power outages nationwide. The change comes as Ukraine's energy grid remains under severe strain from ongoing conflict.

Impact of the New Tariffs

Under the new rules, the preferential gas tariff of UAH 19,000 per thousand cubic meters is now reserved only for electricity producers in frontline regions and for stations that commission new units after December 1, 2025. The market price for gas is at least 1.5 times higher than the preferential rate. Consequently, private producers will only be able to operate without losses for a maximum of 6 hours per day due to current electricity price caps. Cogeneration, which simultaneously produces heat and power, is a key component of efficient energy systems.

The Association of Critical Infrastructure Operators has formally appealed to the Cabinet of Ministers and Prime Minister Denys Shmyhal to cancel these changes. Ruslan Holub, a representative of the association, stated:

“We understand the complexity of the situation with natural gas resources in the state and the need to conserve it under martial law. But halting cogeneration units across Ukraine will significantly weaken the country's energy resilience, as it will immediately remove hundreds of megawatts from the power system.”

The expert further noted: “Instead of developing distributed generation, such controversial and unfounded decisions are effectively destroying it.” The shutdown of cogeneration plants could have serious consequences for Ukraine's energy system, causing additional problems with power supply for households and industry.

This government decision has raised significant concern among experts and critical infrastructure operators, as stopping cogeneration could lead to a major electricity shortfall amid rising demand. Given that energy security is a key factor for national stability, the government's subsequent steps in this area could have far-reaching consequences for the economy and the daily lives of Ukrainians. It is crucial that the government considers all risks and finds a balanced solution to preserve the country's energy resilience.

The situation in Ukraine's energy sector is further complicated by regulatory decisions that have halted electricity imports, exacerbating the risk of power shortages. With the recent changes impacting cogeneration, the potential for increased outages raises concerns about the overall stability of the power grid. For a deeper understanding of how these price caps are affecting energy availability, you can read more about the ongoing challenges facing Ukraine's electricity imports.