Even in far-flung regions like the far eastern Republic of Sakha, Yakutia, a 40 MW solar power plant is being built to enable the full supply of electricity to the local population
While Russia is justifiably known as a major oil and gas producer and exporter, several alternative non-hydrocarbon energy developments have been growing, largely unnoticed and with little reporting. While much of the alternative energy market growth in Europe and the United States has been funded by “green subsidies”, this has not been the case in Russia. One of the reasons, simply stated, is that many of the technologies under the umbrella of “green energy” have not been cost/price competitive if not for governmental subsidies and the politics of the anti-global-warming lobbies.
As technologies improve, the business case for alternative energy generation becomes more competitive from a free-market standpoint. The past three years Russia has seen a pick up both in investing and development in various directions, from Biomass processing to solar energy generation.
One region of Russia which has seen tangible development out of pure necessity is Crimea. The Crimea produced about 628.5 million kilowatt-hours (kWh) of electricity independently prior to 2015. It has been estimated by some that to fully meet real and projected demand it must import approximately 2.5 billion kWh.
The government together with commercial investors have begun projects to help relieve this energy deficit by adding about 134 million kW of new solar capacity and about 62 million kW of wind capacity to the existing electricity network by 2020, and enhancing development programs in the years to come through favorable tax conditions and regional easements.
In the city of Narimanov located in the southwestern part of the Astrakhan region, a 250 kW solar power plant is under construction. A further five solar plants with a total capacity of 90 MW are planned to be completed by 2018-19.
Even in far-flung regions like the far eastern Republic of Sakha (Yakutia) a 40 MW solar power plant is being built to enable the full supply of electricity to the local population.
There are now several manufacturers producing solar panels in Russia, companies that have been started through the Skolkovo programs, as well as foreign investors, among them China’s Amur Sirius, whose new facility will have a maximum capacity of about 330,000 solar modules a year in Russia’s far east.
Other projects in this field include solar power plants in Siberia with a total capacity of more than 254 MW currently planned to be located in areas ranging from the shores of the Arctic Ocean to Kazakhstan's border territories and barren lands bordering China and Mongolia.
In Khakassia, the largest solar power plant in Siberia and the fifth in Russia recently came online. That being said the growth rate is limited by the reality that each investment business case is a stand-alone model, therefore largely dependent on the improvements of cost efficiency, which new technologies can improve on. In addition, solar energy projects as an investment generally require longer term funding to pay off. Inroads are being made, nonetheless it remains a challenge to succeed while remaining independently competitive and unsubsidized.
Despite the emergence of new stations, Russia is still far behind the world indicators on the development of energy on renewable sources. According to the state targets for the development of solar energy if ideals could be met, then by 2020 there should be a total solar generation capacity of 1.5 GW built up in Russia.
The fact remains, solar is growing in the Russian Federation albeit from a very low starting point. Consider that as of January 1, 2017 there were twenty-five solar power stations operational in Russia (Crimea included), or about 0.03% of the Russian power grid.
Today, approved and under construction are a further fifty-seven, all due to come online between 2017 and 2020 more than doubling capacity, not including those now entering and projected for the projects pipeline in the coming years and decades. If one takes the macro view, this has every earmark that now is an ideal long term entry point for investing into the solar future of Russia. Some of the leaders in investing and developing solar power in Russia are OOO “MDT” (www.mdt.ru.com), OOO “Kompleks Industriya”, OOO “Avelar Solar Technology” and OOO “Solar Systems”.
Paul Goncharoff is Chairman, Disciplinary Committee, National Association of Corporate Directors, Russia
This post first appeared on Russia Insider
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