Володимир Конончук — 31.03.2026
Missile strikes on the power grid, widespread blackouts and rising tariffs have created a new reality for Ukrainian businesses. Since 2022, cogeneration in Ukraine has evolved from a niche technology into the standard for autonomous energy supply.
In this article, we will examine the current state of the market, the drivers of growth and the outlook for cogeneration up to 2030.
The cogeneration market in Ukraine is currently experiencing a phase of rapid growth, as confirmed by official data from the State Agency for Energy Efficiency and industry estimates.
The active development of cogeneration began in 2022 in response to the loss of generating capacity, and in 2024–2025 the market entered a phase of scaling up, with an increase in the number of projects, their capacity and the volume of investment.
In particular, according to the State Agency for Energy Efficiency, 68 cogeneration plants with a total capacity of 77 MW were commissioned in Ukraine in 2024, representing an investment of over €115 million, and 42 plants were certified, the majority of which meet EU standards for high-efficiency cogeneration. In 2025, in the first half of the year alone, over 30 additional CHP plants with a capacity of up to 390 MW were added, indicating a shift towards larger-scale and more technologically advanced projects.
In 2026, overall demand for distributed generation will be a key factor. According to estimates by the State Agency for Energy Efficiency, over 260 cogeneration projects with a total capacity of 825 MW are planned for implementation in the coming year, whilst the system’s total demand for distributed generation stands at no less than 1,400 MW.
The market is dominated by natural gas-fired plants, but the biogas and biomass segment is growing rapidly. The highest level of activity is concentrated in industrial and agricultural regions (Dnipropetrovsk, Kharkiv and Khmelnytskyi regions).
Thus, whilst cogeneration developed on a piecemeal basis between 2020 and 2022, by 2026 it had become a systemic tool for energy sustainability and one of the drivers of the energy sector’s recovery. Statistics on cogeneration in Ukraine show steady growth in both the number of projects and their capacity.
Five factors have made cogeneration one of the key trends in decentralised energy in Ukraine. Let’s look at each one in detail.
Large-scale missile attacks on thermal and hydroelectric power stations between 2022 and 2026 destroyed or disabled a significant portion of the country’s power generation capacity. According to estimates by the Ukrainian Ministry of Energy, the total damage to the energy infrastructure has already exceeded $10 billion.
Businesses, hospitals and public facilities were faced with a choice: rely on an unreliable grid or set up their own power generation. Cogeneration plants in Ukraine have become a quick way to replace lost capacity at a local level.
The winters of 2022–2026 were marked by widespread power cuts — lasting between 4 and 18 hours a day in some regions. For manufacturing companies, every hour of downtime represents a direct financial loss.
In contrast, cogeneration in stand-alone mode ensures uninterrupted operation without reliance on the external grid. The system can start automatically during power cuts and maintain critical processes. It is this feature that has become the main selling point for healthcare facilities, food production plants and hotels. The benefits of cogeneration in wartime are evident primarily in its ability to operate autonomously even during prolonged blackouts.
According to market estimates and publicly available data from operators, the average electricity tariff for industrial consumers in 2026 is expected to be around 5–8 UAH/kWh — compared with 2–3 UAH/kWh in 2020. This two- to three-fold increase has radically altered the economics of cogeneration projects.
Generating its own electricity costs the company 3–5 UAH/kWh — up to half the price of grid electricity.
For facilities with a constant thermal load (greenhouses, dairies, hospitals), cogeneration meets both energy needs—electricity and heat—from a single fuel source. The efficiency of such plants reaches 85–92%, whereas conventional power generation utilises only 35–42% of the fuel’s energy.
The government has significantly simplified the licensing procedures for energy facilities during the period of martial law:
For the client, this means reducing the time from decision to commissioning of the power plant to between 6 and 18 months for standard projects. Once martial law has been lifted, a return to normal procedures is expected.
The reconstruction of Ukraine’s energy sector is a priority for international aid. EU and World Bank programmes provide grants and preferential loans for cogeneration and other energy projects.
Key support tools:
International funding covers 20–30% of the capital expenditure on the CHP, which significantly reduces the projects’ payback period.
CHP is being actively implemented in key sectors of the Ukrainian economy, where a reliable energy supply and cost optimisation are essential.
Cattle farms, pig farms and poultry farms generate a steady stream of organic waste, which provides the basis for the efficient production of biogas for cogeneration and its subsequent use as an energy source.
The food, chemical and pharmaceutical industries have a constant need for electricity and heat. Cogeneration makes it possible to meet both needs simultaneously, thereby improving the overall energy efficiency of production.
Hospitals, schools and administrative buildings require a reliable energy supply, particularly in times of crisis. Cogeneration plants ensure self-sufficiency and can operate as either a backup or primary source of energy.
Hotels and restaurants have a constant need for electricity and hot water. Cogeneration helps to reduce energy costs and ensure uninterrupted operations during power cuts. During blackouts, this becomes a significant competitive advantage.
Cold stores and logistics centres are critically dependent on an uninterrupted power supply. Even brief power cuts can lead to significant financial losses due to spoilage of goods.
Data centres have the highest requirements for power supply reliability. Cogeneration units can be used as a primary or backup power source alongside other systems.
Between 2026 and 2030, the development of cogeneration in Ukraine will be shaped by four key cogeneration trends linked to energy independence and decentralisation.
The share of biogas-powered vehicles is growing, particularly in the agricultural sector. This reduces dependence on imported gas and supports the development of renewable energy. The role of biogas plants in the energy transition following the war is becoming increasingly important for the regional and energy independence of communities.
Compact and containerised power generation units (50–100 kW) are becoming increasingly popular, as they can be quickly installed and scaled up in stages to meet business needs.
The combination of CHP and solar panels is becoming the norm for industrial facilities. Cogeneration serves as the base load and a backup for solar power plants. Smart grid technologies enable real-time optimisation of energy consumption across different sources.
Local energy systems are being developed for communities and businesses, which reduces the load on the main grids and improves the reliability of the power supply.
Despite the positive trend, the cogeneration market faces real barriers:
High initial investment costs for cogeneration. A 100 kW CHP unit costs €190,000–210,000, whilst a 500 kW unit costs €400,000–600,000. At the same time, according to market estimates, rising tariffs and a reduction in payback periods to 2–4 years make such investments economically viable even for medium-sized businesses.
Limited access to finance. Ukrainian commercial banks rarely provide loans for energy projects at rates below 15–20%. At the same time, the situation is improving somewhat thanks to the government’s ‘Affordable Loans 5–7–9%’ programme, which enables businesses to secure financing for energy efficiency and power generation projects at significantly lower rates. Additionally, international programmes offer grants and preferential instruments, but these cover only part of the demand.
A shortage of qualified specialists. The market for engineers is still limited, but the growing number of projects is driving staff training and the recruitment of international expertise.
War-related risks. In frontline regions, there remains a risk of damage to equipment; however, businesses are adapting by using modular solutions, taking out insurance and locating generation facilities closer to consumers.
Uncertainty following martial law. Simplified procedures may be reviewed, but at the same time, integration with the EU and the harmonisation of legislation are establishing predictable rules for the long term.
Pro-Energy helps clients overcome financial and regulatory barriers: it prepares feasibility studies, identifies suitable leasing schemes and international grants, and assists with the procurement of permits.
According to estimates by industry analysts, data from the State Agency for Energy Efficiency and UABIO, the cogeneration market in Ukraine has the potential to expand significantly by 2030.
Expected:
A key condition for the forecast to materialise is the retention of simplified licensing procedures or their adaptation to the new realities following the lifting of martial law. The second critical factor is the scaling up of international preferential financing programmes.
Cogeneration will form the basis of a decentralised energy system and be a key element of the country’s energy security.
In the space of four years, cogeneration has evolved from a niche technology to a mainstream feature of Ukraine’s energy sector. After the war, cogeneration will become the cornerstone of the country’s power system development.
There are five key factors that have made it an economically sound solution for hundreds of businesses: infrastructure damage, power cuts, rising tariffs, simplified legislation and international support.
By 2030, the market will have doubled or tripled in size, and cogeneration will form the foundation of the country’s decentralised and sustainable energy system. The share of biogas cogeneration units will reach 45–50%, and small-scale installations will become accessible to medium-sized businesses.
Now is the ideal time to get started: streamlined permitting procedures, international funding and a shorter payback period. Pro-Energy delivers «turnkey» cogeneration projects — from feasibility studies through to commissioning and maintenance.
Contact Pro-Energy for advice — we’ll calculate the payback period and find the best solution for your business.
How many combined heat and power plants are in operation in Ukraine?
As of 2026, according to estimates by the State Agency for Energy Efficiency and industry associations, there are approximately 550 cogeneration plants in operation in Ukraine, with a total capacity of ~1,400 MW. This is 3.5 times more than in 2020. The majority of CHP are located in the agricultural sector (40%), industry (25%) and the utilities sector (15%).
Why has cogeneration become a trend in Ukraine?
The five main reasons: the destruction of the centralised power grid as a result of the war; regular power cuts; high electricity tariffs; simplified legislation during the period of martial law (permit processing times reduced from months to days); and international financial and technical support.
Which sectors are most actively adopting cogeneration?
Leaders in the implementation of the CHP:
The hotel, logistics centre and data centre sectors are growing rapidly.
What does the future hold for cogeneration in Ukraine?
Forecast for 2030: an increase in the number of CHP plants to 800–1,000 units, with a total capacity of 2,500–3,000 MW, and an increase in the share of biogas to 45–50%. Cogeneration will become a key element of Ukraine’s decentralised energy system, ensuring reliability and energy independence.
Does the government support cogeneration projects?
Simplified procedures have been introduced for the duration of martial law: free connection to the electricity grid, with the time taken to issue technical specifications reduced to 2–5 days, and simplified construction without the need for urban planning documentation. International support for cogeneration is available through EU programmes in the form of grants and preferential loans.
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