Changing patterns of energy consumption is critical to reduce emissions and enhance energy security. According to the International Energy Agency’s (IEA) recent report on global energy investment, “investment in energy efficiency and electrification in buildings and industry has been quite resilient, despite the economic headwinds.” In 2023, the European Union spent four-and-a-half times more on energy efficiency than fossil fuels ($164 billion vs $36 billion). Besides renewables, energy efficiency initiatives become the most prominent driver for energy transition.

Ukraine’s postwar recovery plan aligns with this trend. Leaders and international partners envision a sustainable country, not only in the military and economic realms but also in the energy sector. These transformations have already begun without waiting for the artillery to go silent.

Overcoming the Soviet Legacy

In the 2010s, Ukraine was among the least energy-efficient countries in Europe. It burned twice as much energy to generate $1 of GDP as Poland. The service sector consumed about 10 percent of the country’s total energy. It was not uncommon to see overheated government buildings in winter, where the temperature was controlled by the opening and closing of windows instead of thermostats. On the other hand, local councils, hospitals, and schools often struggled with heat loss due to poorly insulated walls, prompting staff to use electric heaters to compensate.

Ukraine inherited its electric infrastructure from the Soviet Union, where energy efficiency was never a priority. For Moscow, cheap energy was a tool of political control, a bribe to ensure loyalty from the “people’s republics” that composed the union. This strategy was reborn in the 2010s, as Russia sought to influence EU policy through its energy exports.

Although Ukraine gained independence in 1991, energy independence remained a distant goal. The country’s energy inefficiency was draining taxpayers’ money, heavily burdening national and local budgets.

Transformations started after 2014 when Kyiv signed the Association Agreement with the European Union. This brought it in line with the EU’s Energy Efficiency Directive. In several years, the state has achieved remarkable progress, including the Energy Efficiency Fund, which was launched in 2018. Non-government organizations, like East Europe Foundation, were broadly advocating for and supporting government initiatives.

In 2021, the Ukrainian government set an ambitious target: raising renewable energy’s share of production to 25 percent. Then, the war came.

Energy Efficiency In Wartime

In 2022, the Ukrainian Ministry of Finance conducted an energy audit of its headquarters, revealing the potential to cut heating costs by 20 percent—saving up to UAH 1.3 million annually (around €30,000). Implementing such measures nationwide could add millions of euros to the state budget, an intelligent move for a country locked in a war of attrition. This realization sparked a energy modernization drive in government buildings.

The ministry turned to the East Europe Foundation (EEF) for partnership. EEF’s expertise resulted in the Power Up! initiative. The project provided mini-grants to war-affected Ukrainian enterprises, helping them implement energy-efficient solutions. The initiative expanded beyond the Ministry of Finance to include three administrative buildings in Kyiv and ten enterprises in the Sumy, Kharkiv, and Chernihiv regions.

Supported by the German government via a program implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and co-financed by the Swiss State Secretariat for Economic Affairs (SECO), the project ran from July 2023 to February 2024.

The Ministry of Finance building received thermal insulation for its heating pipes, LED lighting, and an automatic temperature regulation system. Additionally, 310 square meters of photovoltaic panels were installed, providing electricity for up to 100 ministry employees.

As a result, the Power Up! project is expected to save at least 3,000 MWh annually across the ten selected enterprises.

Building Back Better

In February 2023, the World Bank estimated Ukraine’s reconstruction and recovery needs after the first year of war. The figure reached $486 billion and continues to rise. Yet, there is a crucial idea behind this assessment.

The recovery plan envisions not simply rebuilding but “building back better.” The scale of the destruction offers an opportunity for the country to start from scratch and transform its infrastructure, including the energy system, fundamentally. The goal is to leap from a post-Soviet energy model to a modern, low-carbon, and energy-efficient one that meets EU directives and policies.

The recovery must rest on four pillars to succeed: expertise, experience, planning, and strict oversight of funds. The role of Ukrainian non-government organizations is essential here. With their deep understanding of local contexts and rigorous compliance procedures, NGOs are positioned to stitch together the interests of donors and recipients, ensuring a swift and effective postwar renaissance.

The Power Up! project has set an example, demonstrating that energy transformation is possible even amid war. Although the initiative’s immediate impact may be modest—thirteen buildings alone would not drastically change the country’s overall energy consumption—the project’s true aim is to pave the way for larger, more transformative efforts. Efforts that, gradually aggregating, will deliver a game-changing effect for Ukraine.

Victor Liakh is the CEO of East Europe Foundation. From 2005 to 2008, he was executive director of the Child Well-Being Fund Ukraine. Previously, he worked at the Ukrainian State Center for Social Services for Youth (1996–2001) and for UNICEF (2000–2001). Follow him on X @LiakhVictor or LinkedIn.

Victor Liakh is the CEO of East Europe Foundation. From 2005 to 2008, he was executive director of the Child Well-Being Fund Ukraine. Previously, he worked at the Ukrainian State Center for Social Services for Youth (1996–2001) and for UNICEF (2000–2001). Follow him on X @LiakhVictor or LinkedIn.

Image: Oscar Gonzalez Fuentes / Shutterstock.com.