Mechanisms for supporting renewable energy sources may be modified

August 7, 2017

Mechanisms for supporting renewable energy sources may be modified

The Market Council has proposed altering the approach to the development of renewable energy in Russia. The regulator believes that the mechanisms offered by the state industrial policy would be more effective than the existing support system via the energy market in which the burden is placed on the consumer. The Russian Ministry of Energy concedes this approach could be possible. Deputy Minister of Energy Vyacheslav Kravchenko said the development of green energy could be stimulated through tax incentives or subsidizing interest rates. “The reason for the high price of renewable energy sources is the cost of capital: we allow for yield of around 12–14%. As I understand it, that is quite high. If capital is cheaper, the cost of renewable energy sources will also fall”, Kravchenko said.

Kravchenko believes developing renewable energy source projects in the Far East has the greatest potential. Specifically, setting up “green” power generation is economically viable in isolated power districts, he said. “The cost of electricity production using combined sources of wind-diesel and sun-diesel is cheaper than simply using diesel fuel. Thus, even now it is possible to use the difference in price for electricity alone instead of mechanisms for supporting renewable energy sources”, Kravchenko explained.

A separate pillar of discussions will be devoted to renewable energy sources during Russian Energy Week. The themes include: ‘Developing renewable energy sources in Russia: scaling up and exporting technology’, ‘Inevitable growth: new renewable energy projects in Russia’s regions’, ‘• Energy storage – a revolution in the renewables sector?’, ‘Traditional vs alternative energy: which has the investor’s vote?’ The discussions will be attended by representatives of leading energy companies, investors, legislators, and industry experts.

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