Interviewee: Oleksii Butenko — Ukrainian entrepreneur, investor, energysector development strategist and crisismanagement expert; top manager with over 30 years of experience in developing and implementing energy and infrastructure projects. He has delivered more than 20 projects with a total CAPEX exceeding €300 million. Member (Senator) of the European Economic Senate.
Introduction and Beginning of the Interview
Founder of Biogazenergo (18 MW biogas power plant, $40 million, EBRD partner), participant in the first Ukrainian IPO on the London Stock Exchange ($500 million). In 2021, he led the creation of a specialized enterprise within Naftogaz of Ukraine — Naftogaz Bioenergy, aimed at replacing more than 3 billion m³ of gas in Ukraine’s largest cities within three years.
Oleksii Butenko is one of the few Ukrainian specialists who, even before the war, was developing — and now systematically promoting — the concept of energy decentralization: transitioning from a centralized vertical model to a networkbased structure of local generation, where communities produce their own heat and electricity, and the priority lies not in gas, but in local resources.
Under his leadership, over two dozen largescale projects in energy, heat generation and infrastructure have been implemented. He introduced in Ukraine the professional standard of an energy developer — a fullcycle project manager combining technical, financial and strategic competencies.
Butenko is the author of the concept of “energy democracy” — a market where regulation is driven not by command but by rules, and where the state acts not as a directive center, but as a system architect. His mission is to make Ukraine an energy magnet of Europe — exporting not only electricity, but also technologies, stability and trust
Journalist:
The war has turned the energy sector into a battleground. In your opinion, how has the very concept of power changed in the world after 2022?
O.B.:
The war against Ukraine has redefined the concept of power. Today, victory is not only the ability to destroy — but the ability to restore. Russia bet on destroying Ukraine’s energy infrastructure, trying to paralyze the country by depriving it of electricity, heat and communication. But Ukraine responded with a new logic — speed, flexibility, technological resilience.
An energy system that has withstood thousands of attacks became an example of energy resilience. Mobile repair teams, decentralized generation, digital tools, international cooperation — all this created a new model of crisis response.
Ukrainian energy workers became the “warriors of light.” Their ability to restore networks under fire proves that human capital can be a stronger weapon than any arsenal.
Ukraine also learned to act asymmetrically. Technological strikes on the enemy’s oilprocessing infrastructure became part of the new deterrence strategy. The world saw that energy is not only a vulnerability, but also an instrument of power.
Journalist:
You often say: “Ukraine must shift from a vertical decisionmaking model to horizontal interaction.” What does that look like in practice?
O.B.:
The vertical is the logic of survival. You need it when you’re extinguishing a fire. But when a country enters a development phase, the vertical becomes a brake: it kills initiative, replaces thinking with orders, substitutes competition with queues for signatures.
Horizontal interaction is where decisions emerge at the intersection of competencies, not in offices. Local authorities, businesses, communities — they are partners, not subordinates. Poland and Lithuania proved that when the state sets the rules instead of micromanaging every boiler house, investments come naturally.
We must urgently shift from managing people to managing systems. From headquarters to architecture. From reaction to prediction. The era of headquarters has ended.
Journalist:
Why is this transition so critical right now?
O.B.:
Because 2025 is about development, not “survive until spring.” If we don’t change the logic, we’ll get stuck in a state of permanent crisis. The vertical creates a society of expectation. The horizontal — a society of action.
Look at Lithuania: it opened its heat markets, created competition — and built the most resilient model in the region.
Ukraine has gone through several waves of crisis management: 2014, 2022. Back then, crisis headquarters served their purpose — keeping the system intact. But today, as the country enters the stage of longterm recovery and modernization, this model no longer works.
Manual control is a reaction to chaos, not a system of development. Real crisis strategy is liberalization. An open, competitive, transparent market creates balance by itself. Competition — not command — is the foundation of stability.
Ukraine must transition from vertical decisions to horizontal cooperation. This requires a paradigm shift — from mobilization thinking to institutional resilience. That means:
– fast, clear decisionmaking procedures
– digital monitoring platforms
– transparent accounting
– participation of business, communities and society
The state must focus on the rules of the game, not on manually controlling the players. That is how true energy democracy is formed.
Journalist:
“Energy shapes the economy, not the other way around.” Explain.
O.B.:
A common misconception is that the energy sector “serves” the economy. In reality, it sets the pace, the cost of capital, and political stability. Norway, Germany, Denmark thought in terms of energy — and built economies that withstand shocks. Ukraine must do the same: first — strong energy, then — cheap capital, investors and jobs.
In the 20th century, economic models were built first, and energy systems later. In the 21st century — it’s the reverse. Energy determines the scale and speed of economic development, competitiveness and independence.
The foundation must be the architecture of the energy system: the balance of generation, networks, storage, reserves and cybersecurity. On this basis the economy is built: industry, data centers, hydrogen infrastructure, green chemistry. Where there is energy — there is development.
Ukraine as an Energy Hub and the New System Architecture
O.B.:
Energy is the new geopolitics. Ukraine can become a bridge between the EU and the Black Sea region, part of the European Hydrogen Backbone, an exporter of green electricity and biomethane. Our storage facilities, networks, engineers and geography create real competitive advantages.
Ukraine can become a hub of energy exchange, a center for hydrogen production, data centers and innovative industries. Energy integration with the EU means integration into the security system. Whoever controls energy controls stability.
We must stop thinking in reverse: first economy, then energy. The world has changed. Today energy shapes the economy — setting pace, stability, trust and development. Ukraine must build its own model — technological, transparent, partnershipdriven.
Energy is a philosophy of power. It proves a nation’s agency, its ability to live, grow and remain independent. Energy is the future — and that future has a Ukrainian face.
Journalist:
How do you envision the target architecture of Ukraine’s energy system?
O.B.:
Not as separate facilities, but as a system. I see the structure as follows:
– approx. 70% — nuclear energy (existing NPPs + small modular reactors as a new baseload)
– approx. 20% — flexible gas generation
– approx. 10% — renewables plus storage
Separately — the “last mile”: home solar systems, inverters, storage, and bioenergy for community heating and local electricity. This is not just capacity balance — it’s a resilience and export strategy for the EU. Biomethane and hydrogen are separate but critical directions.
Journalist:
You avoid commenting on operational issues — shelters, heatingseason preparation, company managers’ actions. Why?
O.B.:
Because these are symptoms. If the strategy is wrong, the operational level collapses inevitably. I analyze the strategic level — changing it will bring order to operations.
Order emerges from the market, liberalization and privatization — not a “firm hand.” Where there is competition, there is quality and fair pricing. Where there is the market, there is less room for corruption.
Journalist:
Why do many supervisory boards not function properly?
O.B.:
Because they are an extension of the vertical. They formally exist but do not influence strategy. The European model is simple: the state sets policy, not daily operations. We need public corporations, not “ministerial workshops.”
The discussion about supervisory boards reflects the maturity of the state. When ownership is statecontrolled, independence is often nominal. When private capital is present, the board becomes a strategic body. It is not a symbol — it is a mechanism of control, trust and professionalism.
Supervisory boards make sense only when operating in a competitive environment, with transparent finances and clear mandates. They must be a space of competence, not compromise. Institutional trust is also part of energy security.
Journalist:
You support the privatization of Naftogaz. Why?
O.B.:
Because its roles are mixed: political tool, social guarantor and business entity. This cannot work. Privatization is not “selling off” — it is freeing the company from politics and transforming it into a real corporation.
Where transparent rules existed — as in the case of Kryvorizhstal — modernization and tax revenue followed. Where fear and manual governance ruled — like at the Odesa Port Plant — stagnation followed.
Naftogaz must stop being a phantom monopoly and start evolving into a multifunctional corporation of the future. It reflects the weaknesses and unrealized potential of Ukraine’s economy.
For years the company remained a tool of political influence rather than development. But it can become the platform for a new energy model.
The future Naftogaz should be a multienergy holding integrating extraction, generation, bioenergy, hydrogen, digital services and district heating. Not an empire, but a partnership platform.
Each segment must be economically independent, transparent and competitive.
The key to transformation is controlled privatization: audit, corporatization, partial IPO, strategic investors. The state keeps control but brings in capital and accountability.
History taught us two lessons:
– Kryvorizhstal — transparency and development
– Odesa Port Plant — politics and decline
Transparency produces results; politics produces stagnation.
The future Naftogaz can become Ukraine’s equivalent of Equinor or Orlen — a modern, technological corporation of the energy transition.
Journalist:
Many Ukrainians are afraid of the market. Why?
O.B.:
Chaos is when “things are decided by phone calls.” The market is one set of rules for everyone. Our problem is not “too much market,” but not enough of it. We must complete the reform: independent regulator, real competition, predictable tariffs — and capital will come.
Ukrainians receive shocking electricity bills every month. The average baseload price reaches 6,230 UAH/MWh, and in peak hours rises to 7,640 UAH/MWh. For comparison: Poland — €81.5, Germany — €64, Sweden — €19.83.
High tariffs did not appear by themselves. The war and destruction only accelerated the trend. The real reasons are insufficient competition, monopolistic agreements, corruption, manual management of enterprises, overregulation, and high gas prices. These factors artificially inflate tariffs and burden consumers.
Market, Energy Democracy and the Gas Replacement Strategy
Journalist:
What is the solution to high tariffs?
O.B.:
Market liberalization is the only way out. The only solution is full liberalization:
– opening the market to dozens of players, including international companies,
– transparent rules that eliminate monopolistic collusion,
– incentives for innovation, renewables and modern technologies.Competition — not monopolies — determines price. Coordinated actions of major players become impossible, and consumers understand what they pay for. Liberalization is a strategic decision that reduces corruption, stimulates investment and creates a transparent market.
Journalist:
But not all Ukrainian households can withstand such changes. What should be done?
O.B.:
Targeted subsidies — temporary protection for the population. High tariffs will not vanish immediately, so the state must introduce targeted support:
– for the most vulnerable households,
– covering the difference between market price and affordable rate,
– without distorting competition, unlike broad subsidies.
Journalist:
What do you mean by “energy democracy”?
O.B.:
Openness and access. When communities, businesses and households can generate, sell and store energy — and the regulator is truly independent. Democracy is not the absence of control — it is control through rules.
Crisis management during war is not only about technology, but also about trust. Crisis systems are sustained not by orders, but by confidence in a shared goal.
Political leadership in Ukraine has become an example of a new model of crisis management: strategy, decisiveness, communication, constant presence in real time. The world’s leading think tanks now study this experience as a model of effective crisis governance under systemic stress.
It gives society a sense of stability even when circumstances change daily.
Journalist:
Why is replacing gas with local resources a strategy for survival and development?
O.B.:
There are several key reasons.
First — security and resilience.
When gas cost €2,000/MWh at peak times, that wasn’t a “market price,” but a price of dependency. When a pipeline becomes a weapon, any gas becomes “golden.” Shifting to biomass, biomethane, agricultural residues, local renewables and heat pumps breaks the chain of blackmail.
Denmark, for example, set a political target of 100% biomethane in heating by 2030 — and already in 2023 reached about 39% biomethane in gas consumption, almost eliminating coal from district heating.
Second — community economics.
Every hryvnia paid for imported gas is an export of jobs. Every hryvnia invested in local biomass boilers, logistics, biomethane or heat pumps stays in the community as contracts, taxes and employment.
In Finland, biomass use in district heating more than doubled over the past decade, while wasteheat utilization quadrupled. By 2023, 75% of municipalities covered most of their heat needs with renewables or waste heat.
Third — transition speed.
Lithuania is the benchmark: renewables in district heating grew from 23% in 2011 to 66% in 2017, and biomass now exceeds 85%. Less than a decade — and without cheap Russian gas after 2014.
Fourth — the Baltic model.
Latvia in 2023 achieved 61.4% renewable heat (3rd in the EU). Estonia has ~60% biomass in district heating; networks relying solely on gas or oil shale dropped to 5%.
Fifth — Scandinavian proof.
Sweden turned district heating into a “mixer” of renewable energy flows; bioenergy accounts for ~46% of all heat use. Denmark gets 70% of heat from biomass (2022). Finland shut down Helsinki’s last major coal CHP in 2025.
Conclusion: For Ukrainian communities this is urgent and beneficial. The enemy attacks pipelines, extraction, and weaponizes price. Those who depend on pipelines depend on someone else’s will. Those who have their own bioboiler houses, biomethane, solar with storage, heat pumps and wasteheat systems — turn energy into a shield for their economy and a magnet for investment.
Roadmap, Future Vision and Afterword
Journalist:
What could be a practical gasreplacement roadmap for mayors and the government?
O.B.:
There will be no headquarters — only an architecture of decisions.
In the first 180 days, I would make five steps:
- Community heat equals local fuel.
Mandatory heat balances for each community, competitive transition to biomass, biomethane, waste heat or heat pumps with a 3–5year tariff corridor.
- Quick wins.
Fifty cities with 20–40 MW biomass boilers or CHPs; biomethane pilot projects; mandatory wasteheat capture.
- Financing.
Municipal green bonds, EBRD/EIB/NEFCO grants, state guarantees for heat projects.
- Rules.
Independent heat regulator, standardized contracts, preference for local feedstock — similar to RIN certificates.
- Human capital.
National energymanager program, technical assistance for CHPs and network operators.
Realistic substitution:
1 bcm of gas in 18–24 months; over 3 bcm in 36 months under disciplined implementation and financing.
Journalist:
How do you see Ukraine in 5–10 years?
O.B.:
A Ukraine that stopped “holding on” — and started holding pace.
Where energy is an advantage, not a burden.
Where the state is the architect of rules, not the center of commands.
We must learn to manage not people, but the system. This is the country’s core reform.
Afterword
This interview is about the maturity of the state.
From a vertical of fear — to a horizontal of responsibility.
From gas dependence — to local strength.
Countries with strong energy systems write the rules.
Ukraine has every reason to become Europe’s energy magnet.
