New facilities – tariff increases: energy recovery will affect finances

The restoration of Ukraine’s energy infrastructure will require significant financial and time resources, which may, in turn, affect electricity prices for consumers.

The construction of new electrical substations is one of the most expensive and longest-lasting tasks in the energy sector. This was stated by Dmytro Grigoriev, CEO of DTEK Odessa Electric Grids, in an interview with Ukrinform.

Experts estimate that creating a standard electrical substation from scratch takes 2 to 3 years and costs approximately 10 million euros. When it comes to underground substations, the costs and implementation times increase even more.

Dmytro Grigoriev explained that underground structures are better protected, but several factors complicate their construction. In densely populated cities, it is very difficult to find free plots for such facilities, which complicates and increases construction costs.

Impact on tariffs

The increase in energy infrastructure costs will proportionally affect the industry’s economy. According to Grigoriev, since conventional substations require significant investments and take years to build, underground options are even more expensive and take longer to implement. This creates the prerequisites for increasing electricity tariffs, as the costs of restoring the infrastructure will be incorporated into the tariff policy.

The expert also noted that consumers may not be ready for a sharp increase in tariffs, but without significant investments, restoring the energy system will become more difficult. The constant threat of shelling of energy facilities also complicates the situation, as attacks on infrastructure delay repairs and increase their cost.

Earlier, it was reported that the situation with electricity may worsen, and forecasts of an increase in electricity prices have been issued. Experts also noted that the energy system in some regions of Ukraine is experiencing significant difficulties.