Maximization of the volume of “green” energy generation and the replacement of traditional sources with renewable ones are the current trends in the development of the global energy industry, which Russia is also actively trying to follow, although the actual indicators in this area in the country are still far behind the planned plans.
The trend towards the use of renewable energy sources (RES) has been supported in European countries for a long time. According to Artem Dave, Head of Analytics at AMarkets, its share in the EU energy balance has increased over the past 15 years by 13-16%. “In the past year alone, RES delivered more than half of the world’s new generation capacity,” adds Boris Fine, director of the Center for Economic Research on Infrastructure Industries at the Institute of Natural Monopoly Economics at RANEPA.
In Russia, renewable energy sources also have great potential for development, but growth rates still lag behind those in the world. As Tatiana Lanchina, Senior Researcher in the Center for Economic Modeling of Energy and Environment at RANEPA’s Institute of Applied Economic Research (IPEI), CEO of the Seventh Goal Association, explains, the share of renewable energy in the country in total installed capacity as of June 2020 is 0.8%, excluding HPPs. large, and the share of RES in generation is 0.3%.
According to the Association for the Development of Renewable Energy (ARVE), published in the newsletter “The Russian renewable energy market: current status and development prospects”, thanks to the renewable energy support program implemented since 2013, as of the end of the first quarter of 2020, more than 1,500 MW have been built Of Russia’s energy capacity RES (about 75% of it comes from solar power plants, the rest from wind power plants). Total annual electricity generation in renewable energy facilities exceeded 1.5 billion kWh. At the same time, it is noted that the rate of commissioning of the “green” generation in the country doubled in 2019 compared to 2018, and in 2020, for the first quarter in which 300 megawatts have already been put into operation, another twofold increase in the volume of construction is expected. In total, more than 1,000 megawatts of renewable energy facilities are scheduled to be operational in 2020.
At the same time, ARVE specialists note that, despite the successes, the target indicator of the share of renewable energy in the country’s energy balance, set by the Russian government at 4.5% by 2024, will not be achieved. As of June 2020, the total delay in commissioning is 5% (320 MW) of the total support programme. The delays were caused by the economic problems in the country in 2014-2016, and it also took time to localize the production of equipment. Taking into account all investment projects planned today, the maximum share of RES by 2024 will be 1%. For comparison, the total energy consumption in other countries now exceeds 20%.
According to ARVE, the leading regions in terms of installed capacity of renewable energy generation facilities outside their catalytic mechanisms are the Orenburg region, the Astrakhan region, the Altai Republic, the Ulyanovsk region, the Samara region and the Crimean region. Under the current support mechanism, the Orenburg, Astrakhan, Rostov, Ulyanovsk regions, Stavropol Territory, the Republic of Adygea and Altai lead in terms of commissioning.
In recent years, the industry for the production of “green” power equipment has also developed in Russia. Important trends in this context, experts advocate reducing the share of imported components and increasing the level of production localization to 60% or more. According to the Association for the Development of Renewable Energy, as of 2020, new production facilities have been built in this sector with a total annual capacity of 1.9 GW.
There are currently production facilities in Russia for components required in solar and wind energy, such as silicon ingots, wafers, solar PV modules, wind turbine units, blades and composite towers. Manufactured products are sold not only in domestic, but also foreign markets.
At the same time, according to Olga Novikova, Associate Professor at the Higher School of Nuclear and Thermal Power Engineering of Peter Great Saint Petersburg Polytechnic University (SPbPU), although the production of certain equipment for RES in Russia is increasing, large projects have already been implemented that still involve on the operation of foreign equipment. As a result, there is a feeling that domestic producers are still not competitive enough.
Vladimir Maksimov, Head of the Department of Development of New Business Lines at Toshiba Rus LLC, notes that the target export volumes of these products, set by the Russian government, indirectly indicate the low competitiveness of Russian equipment for renewable energy sources. According to the plan, by 2030, export earnings from the sale of Russian equipment for renewable energy should amount to only 4% of the total capital costs of building green generation facilities in Russia.
“The current main mechanisms for supporting and stimulating the development of renewable energy sources in Russia are the conclusion (based on the results of competitive selection of projects) long-term contracts for the provision of capacity supply capacity by generation of RES-based utilities for the wholesale electricity market (CSA RES); mandatory priority of purchase of electricity produced by qualified renewables-based generation facilities by grid organizations to offset losses in grids at regulated tariffs in (regional) retail markets,” says Mr. Fine. In addition, it is assumed that in the near future, measures to support micro-generation (up to 15 kW), as well as the “green certification” mechanism, will be launched.
Ms. Lanchina adds that the most notable development in the field of renewable energy in Russia is the Wholesale Electricity and Capacity Market (WECM). The development of renewables in the retail electricity markets did not matter: unlike the wholesale market, there were no clear guarantees of the return of the project to investors. “The Government of the Russian Federation is now developing a resolution granting these guarantees, obligating network companies to conclude an agreement with an investor immediately after a regional competition for the selection of renewable energy projects, and not after the plant has been commissioned, as it was before. In the past two years, the development of the mini-retail sector has also begun. RES. Commercial companies began to demand solar power plants to save money on electricity. At the end of 2019, a law on micro-generation was passed, which will allow private homeowners to connect their small solar power plants with a capacity of up to 15 kW to the grid and supply the grid with excess electricity ” , the expert points out.
The Renewable Energy Development Association reports that in 2019 the Government of the Russian Federation agreed to extend the program of support for green generation after 2024. For the new program for the period until 2035, the Government of the Russian Federation has set the volume of support from the electricity market and wholesale capacities at 400 billion rubles, which will be directed 231.25 billion of them are for wind farm projects, 138.75 billion for solar energy projects and 30 billion for small hydropower projects. Such a decision will make it possible to implement projects with a total capacity of 7-9 gigawatts within the framework of the new investment cycle. In general, the exact parameters, according to the plan approved by the Russian government, will be determined by the third quarter of 2020.
Renewable energy, like other sectors of the economy, has been affected by the coronavirus pandemic. In the short term, Russia and other countries faced such problems as delays in the supply of equipment, the timing of the start-up of new renewable energy facilities.
At the same time, and in the long run, according to Ms. Lanchina, the pandemic is likely to have a positive impact on the development of renewable energy sources. Renewable energy and the broader green sector will be at the heart of anti-crisis programmes. In the context of the global decline in energy demand, only the renewable energy sector is showing positive growth, and fossil fuel generation and nuclear generation are declining.
Other experts point out that if oil prices remain low for an extended period of time, there is a risk that the efficiency of new renewable energy projects will be lower than that of conventional energy projects.
As for the general prospects, in the domestic practice of implementing projects in the field of renewable energy, according to Mr. Fine, two main divisions can be distinguished: ensuring power supply for remote isolated power centers and power supply for a centralized power system under the conclusion of power supply agreements (PSD RES) based on the results of selection competitive project. If the first part of the market is completely stable in the long term, then the prospects for the second part are not clear at the moment and entirely depends on the conditions under which the state support program for the development of renewable energy will be extended beyond 2024.