The NBU has revised its assessment of the electricity deficit in Ukraine, but the risks of infrastructure damage remain significant.

Due to significant damage to the energy infrastructure, the electricity deficit in Ukraine is expected to persist over the forecast period. However, the risks of further damage to capacities and an increase in the deficit remain high.

This is reported by RBK-Ukraine citing the "Inflation Report" from the National Bank of Ukraine (January 2025).

The report notes that despite substantial losses and ongoing air attacks, the Ukrainian energy system has demonstrated sufficient resilience, particularly due to rapid equipment repairs. Currently, the situation is developing even somewhat better than previous NBU assumptions, allowing for a revision of deficit estimates over the forecast period.

Taking into account imports, the electricity deficit is estimated at 4% for 2025 (previously estimated at 6% in October 2024), 2% for 2026 (previously 3%), and around 1% for 2027.

The NBU expects that the deficit will gradually decrease, but will persist in the coming years, as the restoration of the energy system requires considerable time and funding. The demand for electricity will grow as the economy continues to recover. Electricity production will also increase due to further repairs of maneuverable generation (thermal and hydroelectric power plants) and the development of renewable energy capacities.

Stable electricity imports, including the increase of the maximum possible volume from the EU to 2.1 GW starting December 1, 2024, will also contribute to further reducing the deficit. According to NBU estimates, annual electricity imports will reach approximately $0.7 billion in 2025-2027.

"As previously anticipated, the electricity deficit will hinder GDP recovery over the forecast period. Electricity imports and enterprises' efforts to develop and utilize more expensive autonomous power supply will increase production costs, which will remain an inflationary factor, although its impact will diminish," the report states.

The risks of further damage and an increased deficit remain significant (25-50%). If these risks materialize, GDP growth will be lower than in the baseline scenario, while price growth will be higher. A positive risk to the forecast (estimated at less than 15%) includes faster-than-expected repair works and/or the commissioning of new capacities, as well as further expansion of electricity import capacity into Ukraine, which would lead to a smaller electricity deficit, the report indicates.

As a reminder, in October 2024, the IMF assessed the winter energy deficit in Ukraine at 3-4 GW, which "aligns with estimates from other stakeholders," with negative risks predominating due to missile attacks and seasonal factors.