Experts discuss mechanisms of support for renewable energy in isolated territories

24 march 2015

The roundtable "Tariff regulation and RER development in isolated and remote energy systems" took place at the Analytical Center. Experts discussed the need to take into account features of the RER projects, as well as the possible impact of the legislative changes on prospects of development of energy based on renewable resources.

Opening the event, Vitaliy Kovalchuk, the assistant of the Department of Industry and Infrastructure of the Executive Office of the Government of the Russian Federation, said that the regulatory framework, related to remote territories, has already been formed, and all appropriate tools can be used. "All isolated territories are characterized by the fact that they are obviously unprofitable. The Economy doesn't play the leading role, but security issues do, as well as social problems. Therefore, tariff mechanisms and support for renewable energy are substantially different from those used in the central part of Russia", said the expert. According to Mr. Kovalchuk, these territories are of a great importance for the Government of the Russian Federation, and they both are and will be of much attention. Therefore it is very important to improve the mechanism of support for renewable energy in isolated territories, he considers.

Yegor Grinkevich, the Deputy Director of the Department of Electricity of the Ministry of Energy of the Russian Federation recalled, that following  the results of the Government Commission hearings on the socio-economic development of the Russian Far East on December 24, 2014 a task was formulated, involving amendments to regulations in terms of long-term methods of regulating the generation and network organizations, operating in the Far East. The official noted, that these changes should allow to take into account at the prices of energy the return of the invested capital and its profitability in the territories, related to non-price areas and technologically isolated energy systems. According to him, a decree №47 was signed by the Government of the Russian Federation additionally on January 23, 2015, related to issues of promoting the use of renewable energy sources in retail electricity markets and involving the development of guidelines for the formation of long-term tariffs for energy resources based on renewable energy resources, including those in isolated and remote power systems.

Mr. Grinkevich believes that the basic idea of ​​the legal framework is that the support should be carried out primarily at the regional level, on the basis of strategic documents that should be adopted by regional authorities. "The Government has defined support mechanisms, but specific decisions must be in communication of business and regional authorities, that have an obligation to take care about the environmental, social and other problems, and should not forget about the price of electricity for end consumers", said the expert.

During the event, experts identified examples of completed projects for the development of renewable energy in remote territories. Sergey Malinkin, the Chief of the Department of Energy and gasification of the Ministry of housing policy, energy and transport of the Irkutsk region talked on the experience of the Irkutsk region. "A project of the combined wind and solar diesel power was implemented using budget funds in the village Ongurene of the Olkhon district. An obvious social effect is a result of the project - duration of the electrical supply has increased from 8 to 15 hours per day", said the official. However problems associated with the failure of several elements and a low level of operation began in the third year of the project. Also the burden on the budget has increased greatly, said the expert. RER is being developed by trial and error in Russia, but Russia definitely need to do this, according to Mr. Malinkin.

Experts also noted that regions have lack of skilled professionals who can adequately assess the situation with renewable energy resources and to understand what segment of the industry should be developed in the territory first.