Green Energy in Russia Still Falling Behind

The year 2016 marked a record growth of solar and wind power generation worldwide: the total power output of wind power stations has increased 9 times during the past decade, solar – 64 times, while investments into RES only in the past year amounted to $328.9 billion. This is 2.5 times more than investments into traditional energy generation.

Russia is slowly but surely joining the global process. Recently, The Russian Government has adopted a RES Support Act (for the retail market), which deals with solar, wind and small-scale hydropower, as reported by RIA-Novosti.

RES support mechanisms have been around for more than a year now. The Act of May 28, 2013 defined the RES stimulating mechanism for the wholesale market of electric energy. In early 2015, the Act of January 23, 2015 “On incentives for the use of RES on retail markets of electric energy” came into force. The Act is aimed at improving the support mechanism for power generating facilities that use RES.

In May 2016, the deadline for selecting projects of new power generating objects was prolonged until 2024 – this deals with objects that are based on the use of solar and small-scale hydropower. In September, an Act on the provision of subsidies came into force, to support technological integration of power generating facilities that are run on RES.

For the first time, the Government agreed to provide direct budgetary support to RES. RES objects of less than 25 MW will be partly compensated by the Government for the costs of technically joining the grid. The subsidies will cover up to 70% of the costs and the total amount should not exceed 15 million rubles. Until now, the support for RES had only come from other energy market players and distribution companies.

This type of measures are of utmost importance to the retail energy market, since the costs for joining the grid largely depends on the way assets are distributed on the ground. Usually this part of the grid may belong to different companies and the producer cannot influence the costs of joining it, says Igor Bryzgunov, the president of the Russian Wind Power Association.

The decisions may become a significant driver of the development of small and medium size RES businesses. According to various experts, for solar power stations of less than 15 MW the subsidies will help reduce the costs of joining the grid by 20%, and this has an even greater effect on small-scale RES installations, of 5MW and below, where the costs of joining the grid constitute a greater percentage.

In 2016, RES have become quite a frequent topic of the official rhetoric. I strongly believe that RES are the future, proclaimed Aleksander Novak, the Head of the Ministry of Energy. The minister emphasized that the production cost of electric energy from RES will keep decreasing, hence investments into the industry will continue to grow. Our energy is cheaper now, and I mean our hydrocarbons – coal, oil and gas. However, we must look into the future, said the Minister.

The analytical paper prepared by the Russian Ministry of Energy, containing the forecast of scientific and technical development of the fuel and energy sector until 2035, shows that in Russia there is a potential for a maximum (up to 90%) localization (local production of components of solar power stations, including glass and polymer of the required quality, invertors, controllers, etc. Some of the modules that are already produced in Russia, are 100% locally made.

Not only is the Ministry of Energy involved in the process of introducing RES. According to Vasily Osmakov, the vice-Head of the Ministry of Industry and Trade, the transition towards RES is an obvious global trend, and the Ministry is actively supporting the development of Russian industry in that direction. Around 30 billion rubles will be invested in the construction of wind parks in Russia. At the moment, a large consortium is being created, which will deal with projecting, contraction, maintenance and other wind power – related issues.

The first 35 MW wind park is supposed to come online in 2017 in Ulyanovsk region. Other objects will be located in Murmansk region and in a few southern regions of Russia. Until 2024, a total of 3600 MW of wind power is planned to be put into operation.

Slowly but surely renewable energy finds its place in Russia’s regions.  In September, in Ust-Kan village of Altai Republic a new 5 MW solar power station was put into service. In early December, the second part of Buribaevskaya solar power plant in Bashkortostan followed suit. Nowadays, the total generating capacity of Bashkir solar power plants has reached 35 MW, and it is supposed to reach 90 MW by 2020.

In the first half of 2017, a modernization of a plant in the town of Novocheboksarsk that produces solar modules is due to be finalized. As the result, the plant’s output is due to increase, and include a new type of photoelectric modules and more efficient cells, of over 20%, based on new Russian technology.

The Governement of the Republic of Karelia and Sinomec, a Chinese corporation, agreed to construct the region’s first ever wind power plant by 2020. The total cost of the project is estimated to be around 9 billion rubles, and the Chinese partner is its main investor.

However, the share of solar power generation has not even reached 0.1% of the total Russia’s energy balance. By 2024, there will be 1.5 GW of solar power and 3.5 GW of wind power produced in Russia. But this is only 2% of all today’s electric energy production. Compared to some other countries’ plans to transition to 100% green energy in the nearest 15 to 35 years, Russia’s plans totally lack ambition, says Vladimir Chuprov, Head of Greenpeace-Russia’s energy program.

 Energy efficiency and renewable energy sources must become the priority of Russia’s low-carbon development, which requires an increase in governmental support of these areas and the development of regional road maps for renewable energy development. This should become the basis for a long-term strategy of low-carbon development until 2050 (development of which is mandatory under the Paris Agreement). It must not include the plans to increase the share of nuclear energy and big hydro dams in the country’s energy balance, or the use of CCS and clearly correspond to the global pathway towards zero carbon energy by the middle of the 21st century – say Russian environmental NGOs in their Position Paper to the UNFCCC climate summit in Marrakesh (COP22). It is about time to introduce core changes to the Russian energy development strategy.