Assessing the criticality of Ukraine’s energy sector within the system of inter-industry linkages of the national economy

Authors

  • Valentyn Pokachaylo State Educational and Scientific Establishment “The Academy of financial management”

DOI:

https://doi.org/10.26906/EiR.2026.3(102).4700

Keywords:

national economy, critical infrastructure, energy, energy sector, cross-sectoral balance, damage assessment, RDNA, hypothetical extraction method, security and resilience of critical infrastructure facilities, martial law, post-war recovery, investment

Abstract

The full-scale armed aggression against Ukraine has turned critical energy infrastructure into one of the main targets of deliberate attacks, which caused unprecedented destruction of generation, transmission and distribution facilities and made the assessment of the systemic role of the energy sector a matter of national security. The purpose of the article is to provide a quantitative assessment of the criticality of Ukraine’s energy sector on the basis of inter-industry linkage analysis and scenario modelling of economic losses caused by the disruption of its functioning. The research methodology combines the generalisation of the results of five rounds of the Rapid Damage and Needs Assessment (RDNA), which made it possible to trace the dynamics and structure of damage to critical energy infrastructure in 2022–2025, with the instruments of input-output analysis. Using the symmetric input-output table of Ukraine for 2021, covering 42 types of economic activity, the forward and backward linkage indices were calculated, and the hypothetical extraction method was applied to model the cascade effects of energy supply disruption. The results show that direct damage to the energy sector increased more than eightfold during the period under review, while the bulk of the damage steadily shifted from transmission and distribution facilities to generation capacities. The energy sector was classified as a key industry of the national economy with a forward linkage index of 2.88 and a backward linkage index of 1.05; its output multiplier equals 2.656. Scenario modelling showed that even a 25% loss of energy capacity reduces the economy's gross output by 20.0%, while complete extraction of the sector raises total losses to 25.5%. The largest relative losses are borne by energy-intensive basic industries, construction and mining. The practical value of the article lies in the possibility of using the obtained estimates to substantiate the prioritisation of investments in the protection and restoration of critical energy infrastructure within post-war recovery programmes and the formation of public policy on critical infrastructure resilience.

Author Biography

  • Valentyn Pokachaylo, State Educational and Scientific Establishment “The Academy of financial management”

    Postgraduate Student

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Published

2026-10-07

Issue

Section

ECONOMICS AND NATIONAL ECONOMY MANAGEMENT