NBU forecast for 2024-2026: what will be the electricity shortage in Ukraine
Due to the intense shelling of the Russian Federation, the shunting generation suffered the most destruction.
During the II quarter of 2024, the risk of further losses of Ukraine’s energy infrastructure materialized, which forced the National Bank of Ukraine to worsen its forecasts regarding the electricity deficit for the coming years. It displayed in the “Inflation Report” of the National Bank of Ukraine for July 2024.
According to the National Bank of Ukraine, the targeted shelling by Russian forces of the Ukrainian energy infrastructure, which continued throughout 2024, led to significant losses in generation and transmission capacities. Maneuverable generation, such as TPPs and HPPs, was particularly affected, causing longer power outages.
“A significant deficit arose already in the II quarter, and at the beginning of the III quarter it deepened due to hot weather and subsequent destruction. Restoring the lost capacities and/or building new ones requires significant time and funding.”, – stated in the NBU report.
The National Bank of Ukraine significantly worsened its forecasts regarding the electricity shortage:
- 2024: more than 7% (preliminary estimate – 5%),
- 2025: about 8% (preliminary estimate – 4%),
- 2026: about 5% (no deficit expected).
Prolonged power outages in the II quarter of 2024 led to a noticeable deterioration in business and consumer sentiment and a weakening of economic activity in a number of sectors, in particular in energy-intensive industries, the needs of which are difficult to meet with autonomous power supplies (food industry, animal husbandry, heavy industry).
At the same time, in general, business and the population have adapted better to the shortage of electricity than in 2022-2023. Part of the needs was covered by electricity imports, which made it possible to maintain positive dynamics in a number of sectors, such as metallurgy and transport.
The NBU warns that larger-than-expected electricity shortages will hold back GDP growth over the entire forecast horizon. This emphasizes the importance of investments in the restoration and expansion of energy infrastructure to ensure the stability of Ukraine’s economy.
