Ukraine’s energy strategy is built for Russia’s attacks but not global shocks

As Ukraine prepares for another winter under Russian attacks, its energy strategy is undergoing a fundamental transformation. Large power plants and centralized networks remain essential, but cities are increasingly turning to distributed generation: gas-fired units, cogeneration, modular boiler houses, solar panels, batteries and backup generators.

The logic is clear. A single missile strike can disable a large power facility, while hundreds of smaller sources spread across a city are harder to eliminate at once.

Ukraine’s government has made distributed generation and decentralized heating central elements of its resilience plans for the upcoming winter. More than $1.4 billion has been allocated for these plans, with another $210 million coming from local budgets.

But decentralization should not be confused with energy independence.

Ukraine may become less dependent on a centralized electricity grid while becoming more dependent on fuel, gas infrastructure, imported equipment and global energy markets. That distinction matters especially now, as the war between the U.S. and Iran has increased volatility in international energy markets.

Ukraine’s dependence on imported petroleum products is already significant. Wartime destruction of domestic refining capacity has forced the country to rely heavily on imports , with Lithuania accounting for about 32 percent of fuel imports in September and Poland for another 25 percent, followed by suppliers including Germany, Romania and Greece.

That creates a paradox. A diesel generator can protect a hospital, water utility or heating system when the grid fails. But the generator itself depends on a reliable supply of diesel. If international fuel prices rise or shipping becomes more expensive, the cost of maintaining that local resilience rises as well.

The same problem applies to gas-fired generation, which Ukraine is expanding rapidly. As of July, approximately 1.8 gigawatts of distributed gas-fired generation had been installed across the country. The Kyiv region alone accounted for more than 219 megawatts.

Gas generation reduces dependence on vulnerable centralized power plants, but it does not eliminate infrastructure dependencies. Every new facility still needs a functioning gas distribution network, adequate capacity, technical connections and reliable fuel supplies.

In 2026, Gas Distribution Networks of Ukraine reported connecting 140 distributed generation facilities , with another 86 planned by the end of the year. Each project requires network capacity assessment, design, construction, connection and gas commissioning. This is why municipal capacity is becoming as important as physical equipment.

Ukraine’s winter resilience plans recognize this problem. The government says more than 2,500 boiler houses and nearly 3,000 kilometers of heating networks have been prepared for the 2026-27 season, while $110 million has been allocated specifically for distributed heat generation.

Yet cities do not enter winter with equal resources or administrative capacity. Some can quickly procure equipment, secure international financing and complete complex infrastructure projects. Others struggle with project design, procurement, grid or gas connections and maintenance.

Recent developments in Kyiv illustrate the problem. On Oct. 11, Ukraine’s Energy Ministry ordered authorities to accelerate the installation and connection of distributed generation facilities in the capital, citing continued Russian attacks on energy equipment and high-voltage networks. Now the global energy market adds another layer of risk.

The U.S.-Iran war and disruptions around the Strait of Hormuz have pushed Brent crude above $100 per barrel and increased concerns about diesel supplies, shipping costs and insurance premiums. On Oct. 21 , Brent was trading around $109 per barrel, while attacks on shipping in and around Hormuz continued.

For Ukraine, this matters even if the fuel never comes directly from the Middle East. Higher global oil prices affect European fuel markets, transport costs and the price Ukraine pays for imported diesel and other petroleum products.

The lesson is not that Ukraine should abandon distributed generation. Quite the opposite. Decentralization is essential to surviving Russia’s campaign against the energy system. But Ukraine and its international partners should think beyond simply delivering generators.

The next generation of resilience should combine distributed generation with energy storage, renewable sources, diversified fuel supplies, efficient local heating systems and stronger municipal technical capacity. International assistance should help communities finance not only equipment, but also engineering, connection, maintenance, fuel planning and project management.

Ukraine is trying to escape the vulnerability created by a centralized energy system. The challenge now is to ensure that it does not replace one dependency with another.

For the U.S. and its allies, that should be a central lesson of Ukraine’s wartime energy transformation: Resilience is not simply the ability to generate electricity locally. It is the ability to keep generating it when the next shock comes from somewhere else.

Kateryna Odarchenko is president of the PolitA Institute for Democracy and Development, a political consultant, a partner of the SIC Group Ukraine and a member of the International Association of Political Consultants.