THE ENERGY SECTOR AFTER THE WAR

Ukraine’s energy sector is entering a period of profound transformation – from restoring damaged infrastructure to creating a new, more resilient and decentralized energy system. In this process, international companies with comprehensive expertise in power generation and grid infrastructure are playing an increasingly important role. The Turkish group Aydem Enerji, which combines renewable energy generation with electricity distribution network management, currently sees Ukraine as one of its key directions for international expansion. DOGUS GULPINAR, International Project Coordinator Aydem Renewables, shares his insights on the future of Ukraine’s energy sector, distributed generation, and investment prospects.

Aydem Enerji is considered one of the few energy groups in Turkey with a fully integrated model – from generation to distribution and supply. What is the greatest advantage of such a structure today?

The key factors for success in the energy sector are predictability and the ability to respond quickly to changes. An integrated structure enables us to manage the entire value chain comprehensively – from electricity generation to interaction with the end consumer. This provides greater flexibility in the face of market fluctuations, improves operational efficiency, and strengthens business resilience. 
 Moreover, such a model allows us to manage risks more effectively, make data-driven strategic decisions, and maintain a high level of customer service.

Today, a significant part of your portfolio is based on renewable energy sources. How do you see the balance between hydro, wind, geothermal, and solar generation evolving in the coming years?

Yes, currently around 70% of our portfolio, with a total installed capacity of 1,210 MW, consists of hydropower plants. At the same time, in order to enhance our resilience to climate-related risks and diversify our generation mix, we are focusing our future investments on the development of wind and solar energy. Over the next three years, we plan to implement new projects with a combined capacity of approximately 770 MW specifically in these segments.
 As a result, the company’s total installed capacity will approach 2,000 MW, while the share of hydropower in the portfolio will decrease to approximately 40%. This will enable us to establish a more balanced, flexible, and resilient clean energy generation portfolio.
As for geothermal energy, it is not currently among our short-term investment priorities. However, we continue to monitor technological developments and market opportunities in this field.

Why is it important for Aydem to build a diversified renewable energy portfolio rather than focus on a single type of generation?

Climate change has a significant impact on the energy sector, increasing production volatility, particularly for hydropower plants, whose operations directly depend on water resources. This creates additional challenges in terms of generation predictability and financial planning.
 Moreover, many regions around the world are experiencing a decline in water availability, which negatively affects hydropower generation volumes. Under such conditions, reliance on a single source of generation increases both operational and climate-related risks.
 That is why we are consistently working to diversify our renewable energy portfolio. Our goal is to create a more balanced generation mix in which hydro, wind, and solar power complement each other. This approach enables us to strengthen our resilience to climate-related factors, ensure more stable performance, and establish a reliable foundation for long-term growth.

You define international expansion as a “natural next step.” Why is the company ready to expand beyond Turkey at this moment?

International growth is a natural stage of our development. Over the years of operating in Turkey, we have accumulated significant experience in renewable energy, infrastructure management, and the execution of large-scale investment projects.

Today, we have sufficient operational expertise, financial stability, and capabilities to enter new markets. At the same time, the global energy transition is creating new opportunities for investment in clean energy and the modernization of energy infrastructure.

Our objective is to scale our proven experience, creating long-term value both for the company and for the regions in which we operate.

Why has Ukraine become one of Aydem Enerji’s key focus markets in Eastern Europe?

Ukraine is one of the most promising energy markets in Europe. The country has significant potential in renewable energy sources, requires large-scale infrastructure modernization, and is actively integrating into the European energy space.

We are convinced that renewable generation and modern distribution systems will become key elements in the reconstruction of Ukraine’s energy sector. These are precisely the areas where Aydem Enerji has core expertise.

At the same time, Ukraine’s strategic goal – building a more resilient, decentralized, and technologically advanced energy system – fully aligns with our vision for the future of the energy sector and with our own capabilities.

What are the key factors for you when evaluating a new energy market?

The most important criteria for us are the scale of societal impact, the predictability of the regulatory framework and financial infrastructure, the transparency of the investment environment, the potential for growth in energy demand, and the strategic importance given to renewable energy.

In addition, access to financing, grid infrastructure, local partnerships, and political and economic stability also play a decisive role in the evaluation process. We focus not only on short-term opportunities but also on the potential for long-term sustainable growth.

At the first stage, you plan to start with generation projects. Does this mean that Aydem sees the greatest potential specifically in renewable energy generation projects?

Not exactly. Renewable energy generation is our historical and deepest area of expertise. This is where Aydem’s journey began: 30 years ago, we developed one of the first private hydropower plants in Turkey, and today we independently manage the entire project lifecycle – from design and construction to the operation of 23 power plants.
 Therefore, generation will certainly be one of the key pillars of our international expansion. At the same time, we do not view the energy sector solely through the lens of electricity generation.
 Another equally important area for us is distribution infrastructure, where we have nearly 20 years of experience and currently serve 6.3 million consumers. Given Ukraine’s need to modernize and rebuild its electricity networks, this segment may become one of our key priorities.
 After all, without modern grid infrastructure, it is impossible to efficiently integrate new generation capacity and ensure the further development of the energy sector.

Today, Ukraine needs not only to restore its generation capacity but also to create a new energy model. How do you envision the formation of this model after the war?

The full-scale war has demonstrated the resilience of Ukraine’s energy system, but it has also exposed its main vulnerability – its centralized structure. Therefore, in our view, Ukraine’s future energy model should be built on the principles of decentralization and diversification.
 Distributed generation, cogeneration units, renewable energy sources, and energy storage systems will play a central role in this model. Such an approach not only increases resilience to external threats but also reduces electricity transmission losses by bringing generation closer to consumers.
 At the same time, the development of new generation capacity is impossible without large-scale modernization of grid infrastructure. Distribution and transmission networks must evolve in parallel with new energy projects, as they are essential for integrating generation into the system and ensuring a reliable electricity supply to consumers.

Which areas of Ukraine’s energy sector currently appear the most promising for international investors?

Today, three areas appear to be the most promising for international investors.

The first is renewable energy. Ukraine has significant potential for the development of new generation capacity, particularly in wind and solar power.

The second is transmission and distribution infrastructure. Power grids will become the foundation for integrating new generation capacity and ensuring a reliable electricity supply to consumers. Without their modernization, the development of electricity generation will be limited.

The third is hybrid projects and energy storage systems, particularly BESS (Battery Energy Storage Systems). These solutions will be critical for balancing the power system, providing ancillary services, and increasing the flexibility of the electricity market.

At the same time, investment potential alone is not sufficient. To ensure a stable inflow of international capital, Ukraine needs predictable regulation, transparent market rules, and a reliable financial framework for investors.

How ready is the Ukrainian market today for large-scale international energy investments, and what are the key risks that still remain?

From a commercial perspective, the Ukrainian energy market has strong potential. The simplification of permitting procedures and the EU’s Ukraine Facility program demonstrate that the institutional framework is gradually moving in the right direction.

However, this alone is not enough to attract large-scale international capital. Two key categories of risks remain: the physical security of assets and the financial predictability of investments. War-related risks require reliable insurance mechanisms and financial guarantees. This is why investors are increasingly focusing on distributed assets, which are more difficult to disable.

The second critical factor is regulatory and market stability. Ukraine’s corporate PPA market is still insufficiently developed due to the limited number of creditworthy off-takers. At the same time, a revenue model fully dependent on market prices is too volatile for most financial institutions.

Additional pressure comes from accumulated debt, cross-subsidization, and liquidity risks within the electricity market. Therefore, to attract large-scale investments, Ukraine needs clear grid access rules, stable revenue mechanisms, a transparent balancing market, and reliable instruments such as Contracts for Difference (CfDs).

The market’s potential is clear. However, large-scale international capital will come only when risks are not merely identified, but systematically mitigated.

You have been working in Ukraine for more than 16 years. How has the Ukrainian energy market changed during this period, and what has impressed you the most?

Over the past 16 years, Ukraine’s energy sector has undergone a remarkably rapid structural transformation. The country transitioned to a competitive market model and later synchronized its power system with ENTSO-E. These were key regulatory and technical milestones that today form the foundation of the sector.

The scale of ambition has also changed. If previously a 200 MW project was considered a major achievement, today the industry is discussing wind projects with capacities of 500–700 MW.

The war has undoubtedly slowed this progress and caused significant damage to critical infrastructure. However, what has impressed me the most is the resilience of the people and the operational system. The ability of grid operators and engineers to maintain the stability of the power system and carry out complex repairs under constant physical threat reflects a level of professionalism that I have not witnessed anywhere else throughout my career.

Looking ahead to 2030, how do you envision Aydem Enerji’s international presence, and what role will Ukraine play in this strategy?

By 2030, we see Aydem Enerji as a strong energy player not only in Turkey but also across international markets. Our focus will be on renewable energy, distribution infrastructure, and a technology-driven growth model.

Ukraine may play a significant role in this strategy. Its energy sector requires not merely reconstruction, but deep modernization – from new generation capacity to resilient and modern grid infrastructure.

These are exactly the areas where Aydem has practical expertise. We believe we can create long-term value for Ukraine by combining our experience in renewable energy with our capabilities in managing and developing distribution infrastructure.

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