OVERVIEW - Views on renewables future differ starkly in Russia

Unlike in other countries, the development of renewable energy in Russia has been too slow, insists German Gref, the chief of one of the leading Russian commercial banks -- SberBank. According to him, this is unlikely to change despite the renewables-friendly rhetoric.

“In terms of clean energy, the world and Russia are moving in opposite directions. Green capacities in Russia are underdeveloped for a single reason: there is no demand for them in the domestic market,” he told Russian media.

According to him, only solar is being developed in the country at an “acceptable pace” while the other renewables lag significantly behind.

The facts substantiate the claim: in the year’s renewable energy capacity distribution tender for 2016-2019, 20 out of 23 submitted applications belonged to solar developers. Of the proposed 365 MW of clean power capacity, solar was allotted 280 MW in tender whilst wind power got a mere 35 MW and hydro power - 50 MW.

Out of 20 solar bidders, 135 MW went for T Plus, a Russian company that is part of Renova Group owned by Viktor Vekselberg, a Russian multi-millionaire. The runner-up in the Russian procurement was Avelar Solar Technology, a subsidiary of Hevel Solar, with 95 MW.

CHALLENGES AND DELAYS

The lackadaisical interest in the competition is explained by the troubles of the Russian economy and higher borrowing costs. A number of Russian investors are reported to have abandoned renewable energy investments in the country over the last year.

“The Russian economy is going through a major slump and, with the issues plaguing the conventional energy market, the authorities are not eager to pour money into the heavily state-supported renewable energy sector. For investors, loans are just too expensive and the prospects of (investment) payoff are gloomy as never before,” a knowledgeable source in the Russian renewables market told SeeNews.

That the economy in doldrums is an issue acknowledged Elena Yvleva, the spokeswoman for Market Council, a consultancy organisation set by Russian Government.

Market Council has received requests from a number of green investors to help them abandon certain projects across the country, or put them on hold, without being penalised, which prompted it to set a 12-month non-penalty period for failing to meet deadlines of renewable capacity installation.

Approached now, Elena Yvleva could not tell SeeNews how many of the clean energy developers have bowed out from the green developments over the last half-year.

The Russian Ministry of Energy has not produced the data, too, but claims that the Russian Government is set to boost renewables expansion in the country offering additional solar capacities in a new competition.

AND SOME GOOD NEWS

“The Ministry is reviewing the possibility of re-distributing unused quotas for green power. I think that the increase, most likely, will come for solar,” Viacheslav Kravchenko, the deputy Russian Energy minister, said in late March, as quoted by Russian media.

Reportedly, Kremlin favors building solar installations in remote regions where the access to the conventional energy sources is limited or non-existent.

Replying to a SeeNews query, Alexander Kremenetskiy, the spokesman for the Ministry of Energy, could not tell when the Ministry will make announcement on available additional solar capacity, but noted that the Government has recently passed a series of incentives to boost renewables in the country.

Boosting clean energy developers’ morale, Sergeij Glazjev, advisor to President Vladimir Putin, said in mid-April that oil will “sooner or later” lose its pivotal importance and that renewable energy will play a bigger role in future.

“Some key changes have taken place in the energy market. We will certainly see increase in renewables’ use no matter what strategy oil supply cartels will assume,” he told Russian media.

Choose your newsletter by Renewables Now. Join for free!