The Development of Microgeneration Based on RES Depends on Electricity Prices

5 july 2017

In the new issue of the Energy Bulletin, experts reviewed global experience of microgeneration based on RES (renewable energy sources), and the tariff policy of the Federal Antimonopoly Service of Russia.

According to experts, the new legal and organizational framework for the development of micro level power generation (home power generation) from renewable energy sources in Russia is an important and progressive move. Experts believe that this can help create a more sustainable energy supply chain and stimulate the development of small and medium enterprises, which would be particularly useful in regions and remote settlements, where building costly communications proves unprofitable. At first, reducing greenhouse gas emissions will be quite modest, but then it will become a way of life, expand to apartment buildings. Large companies will have to revise their long-term development plans. The example of Germany shows that large energy companies lost most of the “summer peak” power demand due to the significant development of microgeneration from RES, experts say.

“In addition to the development of small and medium enterprises, the growth in microgeneration will increase the demand for energy equipment produced in Russia, such as solar panels and wind turbines. In some regions, microgeneration from RES may result in increased security of energy supply,” experts say. Global experience shows that the development of microgeneration based on RES depends on electricity prices and the industry regulatory system.

With regards to the tariff policy development of natural monopolies in Russia, a transition from industry specific to the universal approaches of the Federal Antimonopoly Service of Russia is expected in this case. Tariff setting will become more transparent and closer to the world trends in this field, which will reduce the space for administrative decisions, and areas where collusion and hidden rent-seeking are possible, experts believe.

At the end of May 2017, the Federal Antimonopoly Service of Russia posted a notice on the development of the draft law “On the Fundamentals of State Regulation of Prices (Tariffs) in the Russian Federation” for discussion. Implementation is scheduled for January, 2019. The adoption of the law can have a direct impact on the Russian fuel and energy sector, most industries of which are faced with tariff regulation.

For more information, see the “RES-based Microgeneration” bulletin

For other issues of the Energy Bulletin, see the Publications section.