After the European Commission introduced a new Cross-Border Carbon Regulatory Mechanism (CBAM – Carbon Limits Adjustment Mechanism), the metallurgical industry has become one of the most discussed industries in Russia. It is assumed that products with a high carbon footprint imported into Europe will be taxed, as a result of which losses for Russian exporters, primarily suppliers of minerals and fertilizers, may exceed 1.1 billion euros per year. We have already evaluated the process of including Russian metallurgists in sustainable development programs. Now it is worth considering the approaches of industrialists to the use of renewable energy sources – RES, which will reduce the impact on the environment and mitigate the harm caused by the introduction of new EU rules.
According to the International Renewable Energy Agency (IRENA), in 2017, the global demand for renewable energy was 465 TWh. This is similar to France’s total electricity demand, but less than 4% of global industrial demand. However, the interest of industrialists in renewable energy is increasing every year. Most often, companies prefer to build their own sources of clean energy, and less often buy green certificates or enter into direct sales contracts with green generators. What methods of introducing renewable energy sources are Russian metallurgists looking for?
The installation of renewable energy generation is the most common method of introducing renewable energy around the world, but in Russia it is almost not developed. The reason, as it often happens, is a combination of many factors: the excess of conventional energy sources, the dependence of renewable sources on weather conditions, and, finally, the lack of efficiencies and the need for serious investments.
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Based on global experience, three main factors that stimulate the development of renewables can be identified: a guarantee of connectivity to the grid, a long-term contract for the purchase of all electricity produced by RES, as well as a guarantee of energy purchase at a fixed price.
In Russia, RES can exist on the market so far only with the help of state support programs, which assume that investments of power engineers in the construction of renewable energy generation will return with a guaranteed return. Until 2024, the first RES support program (the so-called CSA RES) is being implemented in Russia, and from 2025 to 2035 the second program (CSA RES 2.0) will be implemented. In contrast to the first, which focuses more on launching factories and industries, the second pushes renewables to push and shift to export.
There are still rare examples of the installation of our generation in Russia. In May 2019, it was reported that Polymetal (mining silver, gold and copper) had begun to use wind energy. New capabilities were launched in the Okhotsk region in the north of the Khabarovsk Territory. The wind power plant is integrated into the general power supply system of the Unchi settlement, through which the shipment of the gold deposits of Svetloe passes. Prior to that, a solar power plant was commissioned in the field.
buy green energy
According to BloombergNEF, in 2020, companies around the world purchased a record amount of green energy through direct purchase agreements (about 23.7 gigawatts, up 18% from 2019). Almost all transactions are the purchase of solar or wind energy.
In Russia, industrial enterprises are only approaching this market. For example, Metalloinvest is already gaining green energy, while MMK will only use solar and wind energy produced by Fortum.
The companies signed a memorandum of cooperation at the last SPIEF exhibition. But to date, hydroelectric power stations remain the main source of renewable energy for Russian metallurgy. It should be borne in mind that hydropower, in addition to its environmental friendliness, is cheaper than conventional energy and therefore attractive for business.
Rusal consumes a huge amount of electricity, which is due to the technological features of the industry. Aluminum companies account for 7% of the energy consumption of all industrial enterprises in the world. The advantage of Rusal is that 98% of the total energy consumed by it is produced by hydroelectric power stations in Siberia. Thanks to this, the company was able to launch a brand of low carbon aluminum – ALLOW, with a carbon footprint of less than 4 tons of CO22– The equivalent of a ton of aluminum which is three times less than the world average.
Last year, 46% of the total energy consumed by Norilsk Nickel was produced by hydroelectric power plants. This year, the company began producing carbon-free nickel. This was achieved mainly by the modernization of the Ust-Khantayskaya HPP, which feeds the company’s production facilities in the Norilsk Industrial District.
Polyus gold mining has been developing renewable energy sources since 2015, and according to the results of 2020, hydropower occupied 20% of the total electricity consumption. And this year, the company concluded a direct contract for the supply of electricity from Sayano-Shushenskaya HPP. As a result, two of the company’s main production facilities, the Olimpiada and Blagodatnoye mines, completely switched to the provision of hydroelectric power. As a result, greenhouse gas emissions across the company have fallen by a third.
Another way is to purchase green certificates, which certify that industrial products have been produced using renewable energy and low-carbon energy sources. Furthermore, a green certificate can be sold by a renewable energy generator either with the electricity generated or separately, giving it additional resources for development. In Russia, the launch of the green certificate trading system is scheduled for March 2022. It is already operational in many countries, for example, in the USA there are renewable energy certificates, in the European Union – low-carbon guarantees of origin, in most other countries – I-REC International Certifications.
Only because of the newest gold mine “Polios” increase quota Renewable energy in the portfolio by up to 100%, to make up for that portion of non-renewable energy that cannot be replaced by RES. This made Polyus the first mining company in the world to achieve a green energy transformation.
The pace of commissioning of renewable energy-based capacities is accelerating every year. Not all Russian metallurgists can boast of significant achievements in the field of green energy, but they are actively on the global agenda. The ambitions of Russian companies coincide with their desire to bring their projects in line with the sustainable development goals. Against this background, new requirements for industry regulators in Russia and abroad are just one aspect of strengthening the role of renewable energy, which brings the development of green energy in Russia closer.
The opinions of the authors may not coincide with the editorial board.