DTEK Energy CEO on power outages and ongoing repairs — interview

NV: Ukrainians have been living under constant blackouts for over a month. What allowed the power grid to get by with little outages prior to May?

Saleev: Electricity deficit is a dynamic thing that is constantly changing. First, the [Russian] attacks don’t stop. They started in early spring but continue into the summer. We’ve already had seven massive [Russian] attacks on power industry this year. And each of them causes additional damage to generating capacities. If you recall, a few months ago the Energy Ministry announced that we lost 7 GW of capacity [in 2024]. And as of today, we’ve already lost 9 GW. So, sustained attacks continue to reduce our generation capacity.

Secondly, there are weather conditions. They’re constantly changing, and the balance of electricity use is changing with them. Consumption increases due to heat: air conditioners and refrigerators are working overtime. We can see that even in the past years we always had a maximum consumption in the spring and summer periods. Our consumption will grow in winter.

Thirdly, what has already been repeatedly emphasized is that our nuclear power plants always undergo maintenance in the summer, and they normally provide the base of national electricity output. Due to this, the difference between consumption and production becomes more significant, it’s no longer possible to cover it with electricity imports as they’re already at the limit.

NV: How does your company assess its losses due to Russian aggression?

Saleev: If we talk about DTEK Energy, the losses already amount to about UAH 16 billion ($392.5 million) after the last seven attacks. This is how much we’d have to spend to restore our output to its early 2024 level.

NV: Will you fund these repairs yourself, or is the state also involved?

Saleev: We’ve used UAH 1.4 billion ($34.3 million) on power plant repairs this year. It was done at the company’s expense. We plan to increase this amount to almost UAH 4 billion ($98.1 million) by the end of the year. But we must understand that we won’t be able to cover the entire sum on our own, including because our current output simply does not generate enough revenue. We don’t sell electricity in the volumes that we could sell before the attacks. We have no money coming in due to the loss of generating capacities. Therefore, we must look for various ways to attract additional resources for recovery.

We work and cooperate with the Energy Ministry, which centrally supervises this restoration process. They also administer the aid that comes from Western partners. The ministry decides which utility company gets a portion of assistance from Europe. So far, it’s mostly equipment assistance, equipment previously used at thermal power plants (TPPs) in neighboring countries. And some of that recovery equipment comes in part through this mechanism.

But we still have no understanding of how we’ll cover these costs in general.

NV: DTEK Energy said that 90% of its thermal power plants (TPPs) were destroyed. When will these capacities be at least partially restored?

Saleev: The figure is correct. In terms of repairs—they are underway around the clock. It will take more than a year to completely restore lost capacity. For some things to restore, we need to purchase equipment, the production period of which is 9-12 months. So, it takes at least a year to supply the equipment, and it also need to be installed, connected, etc. Therefore, a full recovery isn’t just one year, it won’t end this year, it will continue in 2025.

The pace of recovery will be influenced by how much resources we will have available. Unfortunately, I cannot say how this assistance will come, so I cannot speculate about an exact timeframe. All our corporate resources are funnelled toward repairs. We’re trying to add generating capacities to the power grid once it becomes possible. It’s not quite safe to say specific numbers, because the enemy will be able to glean some intelligence from the. 

NV: Let’s try in general terms: how much do you expect to restore by the end of this year?

Saleev: It’s technically possible to restore about half of what we lost by the end of the year. But I repeat, it depends on what resources are available and on potential new attacks. Further missile strikes could throw any forecast out the window.

Last year, we repaired 10 power plants after the 2022-2023 winter. And all 10 of them were lost in this year’s air strikes. At one facility, we repaired three times, and lost it to enemy attacks three times. One can hardly make credible predictions under these conditions.

NV: Then, the question is does it make sense to restore these TPPs?

Saleev: A counter question: where can we get generating capacities for the power grid?

NV: Look for alternatives.

Saleev: Well, we can look for alternatives, and we’re doing it. The Energy Ministry is also working to build new generation, including distribution generation. But that takes time. As of today, we’ve lost 9 GW of capacity. We passed last winter with a maximum of 18 GW. That is, we lost half of what we had at the peak of this winter. It’s impossible to build new generation in such volumes before winter. It’s unrealistic to add 9 GW of new capacity.

NV: Is it faster to restore it?

Saleev: It’s definitely faster to restore, because there’s an infrastructure, there are people who work at these stations, there’s some equipment left. In order to build something new, everything has to be made from scratch.

NV: So DTEK plans to restore all its TPPs then?

Saleev: Currently, we have not written off a single facility as being beyond repair. We understand that, in general, everything can be restored. It’s a matter of time and resources.

NV: Besides TPPs, what alternatives are you exploring?

Saleev: As for DTEK Energy, we also have energy storage projects, which are large industrial batteries. We have prepared technical and economic feasibility studies for these projects. We’re also looking for opportunities to attract investments to implement them.

They’re not implemented yet. We have the land plots, the preparatory work has been completed, but we need investments and external financing to start the construction itself.

DTEK Energy’s strategy will continue to be that we’ll provide balancing and manoeuvrability for the Ukrainian power grid with the capacities we have.

As for DTEK as a whole, the company continues to strategically develop distributed generation on renewable sources, such as wind farms. Our colleagues from DTEK Renewables built the first stage of the Tylihul wind farm [Mykolaiv Oblast] in the last two years of the war. They continue to develop projects on renewable energy sources and build new wind farms.

NV: Given how tough the summer is in terms of power shortages, what should we expect in fall and winter?

Saleev: Consumption will drop a bit once the weather is not this hot. This is normal, and it always happens that the consumption is lower in late August, September and October. If the repairs are properly funded, if there are no new attacks, then we’ll add new capacities. So, the reduction in consumption and additional capacity may reduce the deficit.

At the same time, consumption will increase again in winter due to cold weather and electric heating. Will it be possible to cover the winter deficit? I don’t know. I think since it’s impossible to restore everything and it may take years, we’ll continue to face a difficult situation with our grid balance.

In addition, I don’t think the enemy will stop attacking the Ukrainian energy industry. This will lead to new destruction, new losses in both generation and transmission of electricity.

So, I think the situation will remain quite challenging.

NV: Do you see any way the country could be living with no rolling blackouts by the end of this year?

Saleev: Well, if all the plans for restoration, construction of new generation, and increase of imports are implemented, then it may have some effect. But I cannot speak competently about these plans, because I don’t understand them all.