Before dawn in the historic Podil district of Kyiv, a soft glow spills from the windows of a small bakery as bread is prepared for the day ahead. Inside, the ovens hum briefly before the lights cut out again, another blackout caused by Russian missile and drone strikes on Ukraine’s energy system. Within minutes, a diesel generator rumbles to life, restoring power and allowing work to continue.
Scenes like this have become routine across the country. Russian attacks on Ukraine’s energy infrastructure are now widely seen by economists and business owners as the most immediate threat to economic stability, raising costs, cutting productivity, and forcing companies into survival mode as winter temperatures bite.
Generators as a cost of doing business
For many Ukrainian entrepreneurs, operating without backup power is no longer an option. Bakeries, cafés, factories, and retailers have invested heavily in generators simply to remain open. Fuel alone can cost hundreds of hryvnias per hour, eroding already thin margins.
Electricity-dependent businesses face particularly sharp pressures. Owners report running generators for up to half the day, often without a predictable schedule for grid power. Refueling, maintenance, and repairs add to the burden, while equipment failures become more likely under constant stop-and-start conditions.
Labor shortages caused by military mobilization and wartime migration compound the problem. Fewer workers, higher energy costs, and declining consumer purchasing power have created a difficult operating environment, especially for small and family-run firms with limited financial reserves.
Hospitality and retail under strain
The hospitality sector has been among the hardest hit. Restaurant operators say the current winter is the most challenging period in decades. While many businesses prepared for rolling outages, prolonged cold weather has increased heating needs and amplified the cost of generator use.
Some cafés and restaurants have been forced to close temporarily after repeated attacks disrupted not only electricity but also water and sewage systems. Repairs from blast damage, often financed through loans, leave owners with long-term debt even before accounting for lost revenue.
Despite these pressures, many establishments continue to serve their neighborhoods. Under emergency regulations, some businesses are allowed to operate during curfews as community support hubs, providing electricity for phone charging, hot drinks, and shelter from the cold. These roles strengthen social resilience but rarely improve profitability.
Manufacturing absorbs higher costs
Larger manufacturers face a different set of challenges. Textile and apparel producers, including companies that export to Western markets, have invested in industrial-scale generators and alternative heating systems. These measures ensure continuity but significantly raise operating expenses.
Business owners estimate that producing goods on generator power is 15 to 20 percent more expensive than relying on the national grid. Combined with a sharp drop in domestic customers, as millions of Ukrainians have left the country, overall profitability has fallen dramatically. Many firms now rely more heavily on online sales and exports to offset domestic weakness.
Economic outlook hinges on energy resilience
According to forecasts from the Kyiv School of Economics, strikes on the energy system represent the most acute short-term risk to national output in early 2026. Analysts estimate that if businesses continue adapting, GDP losses could be contained to around 1 to 2 percent.
However, prolonged or intensified damage to the power grid could push losses closer to 3 percent of GDP. Such an outcome would slow recovery prospects and strain public finances already stretched by defense spending and reconstruction needs.
The broader implication is clear. While Ukraine’s private sector has shown remarkable adaptability since Russia launched its full-scale invasion of Ukraine in 2022, resilience has limits. Each blackout forces difficult trade-offs between staying open and absorbing losses.
For many business owners, the objective is no longer growth or efficiency. It is continuity. As one long-time entrepreneur put it, the priority today is simple, to survive long enough to operate under normal conditions again.
