Compass Lexecon partners with USAID Energy Security Project to support development and reconstruction of Ukraine’s energy sector

The USAID Energy Security Project (ESP) and Compass Lexecon re-launch the project “Resource Adequacy Assessment of the Integrated Power System of Ukraine”, with the goal to prepare scenarios and plans for the reconstruction and development of Ukraine’s power system.

Situation

On 16 August 2023, the USAID Energy Security Project re-launched a project called “Resource Adequacy Assessment of the Integrated Power System of Ukraine” (“RAA Project”). The project, which was put on hold because of Russia’s war against Ukraine, is intended to develop a plan to improve and renovate Ukraine’s electricity sector. It recognizes the necessity to link short-term actions, i.e., reconstruction of damaged energy infrastructure, with medium and long-term energy goals, such as enhancing the reliability and resilience of the power system. Compass Lexecon is a partner of USAID ESP in this important project supporting different energy stakeholders in Ukraine.

Our Role

A Compass Lexecon team will, in close cooperation with USAID ESP, as well as other stakeholders (e.g., the NPC Ukrenergo – the Ukraine’s E-TSO, the National Energy and Utilities Regulatory Commission - Ukraine’s Energy Regulator, and the Ministry of Energy of Ukraine), prepare a study assessing the adequacy of the Integrated Power System (IPS) of Ukraine and develop guidance on the short- and medium-term reconstruction and long-term development of the IPS of Ukraine in line with the Energy Strategy of Ukraine 2050. The study will also include recommendations for appropriate investment mechanisms and capacity remuneration mechanisms for achieving the objectives at different time frames.

In more detail, the project will touch upon the following items:

• Calculation of the Value of Lost Load (VoLL), the Cost of New Entry (CONE), and the Reliability Standard (RS) for the IPS of Ukraine.
• Guidance on the short-term recovery, e.g., winter 2023/24 and 2024/25, and reconstruction of the Ukraine energy infrastructure for 10 years.
• A Resource Adequacy Assessment for the IPS of Ukraine, including system flexibility assessment and needs.
• Recommendations for an investment mechanism for short-term capacity expansion and CRM to address resource adequacy issues and needs for the reconstruction and development of the IPS.
• An optimal resources capacity expansion analysis until mid-century in line with European decarbonization policies and the Energy Strategy 2050 recently adopted by the Ukrainian Government.

Our Impact

The RAA Project has been re-started in August 2023. The final study with recommendations is expected to be completed in spring 2024 and will help to strengthen the energy sector and its sustainable and reliable development.

The team

The Compass Lexecon team is led by Fabien Roques and Dmitri Perekhodtsev and includes Wenkai Mi, Julio Quintela, Augustin Lorne, and Petr Spodniak.