Ukraine Market Report — Q2 2024
Sustained strikes on generating capacity through the spring produced the most severe electricity constraint of the war, and accession negotiations formally opened in June.
Overview
Strikes on electricity generation through the spring removed a substantial part of the country's thermal and hydro capacity, producing extended outages through the summer.
Accession negotiations with the EU formally opened in June with the first intergovernmental conference.
The generation constraint
The 2022–2023 attacks had concentrated on transmission and distribution, which are repairable relatively quickly. The 2024 attacks concentrated on generation, which is not.
A damaged substation can be replaced in weeks. A damaged turbine hall requires equipment with multi-year manufacturing lead times, procured internationally.
The commercial consequence was the most severe operating constraint of the period. Industrial users faced extended scheduled outages, and the autonomous generation installed in 2022 became a primary supply rather than a backup.
The response was threefold: imports of electricity from the EU through the interconnections built after the 2022 synchronisation with the European grid; further distributed generation; and a shift in industrial scheduling toward off-peak operation.
The synchronisation with the European network, completed under emergency conditions in March 2022, is what made the import route possible. It was carried out in weeks for reasons that had nothing to do with 2024, and it is the reason the 2024 constraint was survivable.
Accession negotiations
The formal opening converts the process into a working programme. Its commercial content is described in the archive's 2023 report and does not change: each chapter generates regulatory demand on a published schedule.
Macro position
Growth continuing but constrained by electricity. Inflation rising from its low. Managed exchange rate flexibility. External financing on the EU facility and the IMF programme.
Sectors
Energy-intensive industry — the sector bearing the constraint.
Agriculture — export access good.
IT services — operating on autonomous power.
Electrical equipment and generation — a large and urgent market.
What the quarter settled
That an emergency measure taken for one reason can be the thing that makes an unrelated later crisis survivable — and that grid synchronisation completed in 2022 was worth more in 2024 than anyone assessed at the time.
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