Quarantines imposed in response to the COVID-19 pandemic pose a challenge for the energy industry. While people were forced to stay at home in self-isolation, the energy supply system continued to work both for people and for business: there was light and internet in people’s homes, while electricity was continuously supplied to business facilities. We met with Ivan Geliukh, CEO of DTEK Grids; a group that includes seven energy distribution system operators with 18,000 employees serving more than 13 million residents of Ukraine. We talked about the main challenges the industry faced two years ago, and discuss ‘recipes‘ for business recovery and development in difficult times.
The conversation was led by Andriy Tymoshenko, Director, Head of Strategy and Operations, KPMG in Ukraine.
This autumn, KPMG International released the global version of its traditional CEO Outlook report. The research shows that global business leaders are confident in the growth of their companies and the global economy as a whole. Our Ukrainian Business Leaders Outlook 2021 confirms this prediction, with more than 70 percent of Ukrainian executives sure that their business will grow.
Do you agree with those who are optimistic about the future of the economy and business in Ukraine?
DTEK Grids operates in five regions of Ukraine. If we compare the amount of distributed energy and the demand for electricity on a y.o.y basis, we can see a six percent increase on average. This is quite substantial. For 11 months of 2021, we recorded a 5 percent increase in consumption. For us, this is evidence that the Ukrainian economy is recovering and that businesses are developing. Another important factor indicating economic recovery is the increase in the volume of new customer connections to electricity networks. That is, the demand for connection is there: new houses and apartment blocks are being built and people are consuming more electricity. In some regions, we’ve seen an increase of 37 percent.
In your opinion, how long will it take to restore supplies to pre-crisis volumes?
Different industries will do this in different ways. In general, if we look at the volumes of electricity consumption in the regions where DTEK Grids operates, we expect volumes this year to exceed those of 2019.
What challenges has DTEK Grids faced over the past two years?
Firstly, there was the beginning of the pandemic which was quickly followed by quarantine restrictions that fundamentally changed the format of our work, the work of our people, and our approaches to work and technology. The second big challenge was changes in the electricity market due to changing customer demand. Today, customers see electricity as a basic need: electricity simply has to be available round the clock. This is power grids’ are primary responsibility. However, customers and market participants now have a desire and a need to trade on the energy market too.
We have seen a significant increase in small-scale generation: more and more people are becoming prosumers, installing home solar panels for their own needs and for generating electricity. More and more households are connect to power grids, and have installed chargers for electric vehicles. We can feel how the customer market has changed the role of electricity networks. Today, in addition to high-quality power supply services, we provide our customers with the opportunity to become a player on the energy market.
What are your expectations for changes in the Ukrainian energy sector?
Today, the Ukrainian energy sector is following the same path as energy companies in Europe did a few years ago. Grids are transforming from classical 'Oblenergos' to modern energy distribution systems with 'green' energy elements. The grids’ role is to help all market participants to fulfil their aspirations, plans, and needs: from traditional electricity consumption to electricity generation through new 'smart' digital solutions, such as 'smart' meters that enable customers to monitor their electricity consumption via smartphones and manage them according to their needs. We are consciously strengthening our power networks’ image and the public’s perception of them as a partner that creates opportunities.
