Modeling Needs to Support the Reconstruction Strategy of Ukraine

Abstract

Ukraine has been facing difficult times. Russia started a full-scale invasion on February 24, 2022, and has caused huge human and infrastructure losses. As a result of the invasion, more than 8 million people left their homes. The Russian army has targeted Ukrainian energy sources, destroying or damaging over 50% of thermal power generation capacity (coal and gas), 30% of solar generation, and 90% of wind generation. The Russians are also threatening Ukrainian energy security, as they currently control the Zaporizhzhia nuclear power plant – Europe’s largest. In addition, Russia has destroyed 121,000 buildings, including 5,300 multistory buildings - more buildings than Ukraine built during the past five years. The occupiers destroyed or damaged 343 district heat boiler stations (destroyed 12 / damaged 331) and 8 CHPs (destroyed 4/ damaged 4). There is no doubt that Ukraine will be able to protect its sovereignty and restore its territorial integrity; however, this will be a long process. The Government of Ukraine needs to simultaneously focus on many issues, from waging war to the restoration of electricity, water, and heat supply in the territories close to the front line. In addition to these time-sensitive issues, the government also needs to plan a long term multi-sector strategy for the reconstruction of Ukraine’s economy. Ukraine initiated a broad-based political process for recovery at the International Ukraine Recovery Conference (URC 2022) in Lugano, Switzerland. Prior to URC 2022, Ukraine applied for EU membership on February 28 and was granted the status of candidate country by the European Council on June 23, 2022. More than 40 nations are fully committed to supporting Ukraine throughout its path from early to long-term recovery. In addition, these countries link a successful recovery to Ukraine’s European future (URC, 2022a). The reconstruction process will be long. The government also recognizes that it is not enough to build energy infrastructure back – it should be built back better. The government is committed to building a more sustainable and cleaner energy sector. Energy modeling can provide important insights into paths to decarbonize Ukraine’s economy while rebuilding it after the war. Pacific Northwest National Laboratory (PNNL) and the Institute for Economics and Forecasting of the National Academy of Sciences of Ukraine (IEF) work on modeling decarbonization scenarios in the energy sector of Ukraine. The teams focus on the heat sector, which includes district heat, autonomous and individual heating, and energy consumption by final energy consumption sectors, including buildings. Since the teams use world-class integrated assessment models, other sectors will be analyzed as well. The purpose of the document is to describe the needs of key Ukrainian ministries in modeling the reconstruction process. The scope of this document is limited to modeling energy consumption by the power and heat sectors, final energy consumption by buildings, and GHG emissions from these two sectors. The rest of this policy memo is organized as follows. After this introduction, Chapter 2 discusses key provisions of the reconstruction strategy with a focus on energy, buildings, heat supply, environment, and European integration aspirations. Section 3 provides an overview of recent developments and key decisions of the Government of Ukraine in the area of energy efficiency and decarbonization. Finally, Section 4 provides key suggestions on how PNNL and IEF can help the Government of Ukraine in developing strategic documents.