Renewable energy in Russia

Russia’s Government Decree 449, 28.05.2013 “Renewable Energy Source Development Measures” has opened the way for new budgetary interest and increased investment in renewable energy.

Market overview

Renewable energy sector (solar, geothermal, bio-fuel and especially wind energy) has been actively developing during the last several years. However, there is hardly any Russian technology available yet.

Nowadays the amount of energy generated by renewable energy sources in Russia is 8.5 billion KWt, which is less than 1% of the total amount (this figure doesn’t include hydro generation exceeding 25 megawatts).

Government support to renewable energy producers

In May, 2013 the Russian government has passed several normative acts which stimulate investments in renewable sources of energy. For instance, the Decree 449 “Renewable Energy Source Development Measures” aims to develop and support usage of renewable energy. According to the latter, Russia shall introduce 6.2 GW of generating capacities from renewable energy sources until 2020, which will increase the share of these sources in the energy mix from 0.8% to 2.5%.

The incentive scheme described in the Decree 449 is expected to be implemented through power purchase agreements and will prioritize projects in line with a local content requirement, obliging solar, wind and small power hydro developers (biomass and Bio fuel have been disclosed from this list and continue to be supported only through retail market as agreed back in October, 2012) to use 20 percent locally produced renewable energy equipment in 2013–2014, and increase this output to 65–70 percent by 2020. Around €2 billion will be made available to support renewable energy projects in Russia.

Solar Energy

Solar potential is reasonable despite Russia’s location in the northern latitudes. The highest solar potential is in the southern regions, especially in the Northern Caucasus. Although Russia does not utilize many solar plants, it is quite advanced in photovoltaic technologies, especially in the production of silicon.

One of the most prospective projects is the construction of a new solar power plant initiated by a joint venture of Rusnano and energy holding Renova. The plant will have a 12.3 MW capacity, split evenly between photovoltaic (PV) and thermal power. The deal is worth US$97mn and the plant is expected to establish its presence by 2013.

Biogas Energy

Russia has been developing biogas power generation since the 1960s, although this technology has only started gaining popularity after 2000.

Biogas is mainly used in Russia as a resource for heating stations; these stations produce 1.8 million Gcal which is 3% of all heating energy produced using renewable sources of energy.

The most advanced region for developing biogas projects in Russia is Belgorod Oblast. Biogas stations launched in 2012 produce 8 million cubic meters of biogas. Farms and agricultural complexes in the region have a potential to provide raw material to 150 of such stations.

Several projects in biogas sector were launched in 2013 in Belgorod region in partnership with Italian companies. Main advantage for the development of biogas projects in Russia is availability of the raw product. In 95% cases the owner of the biogas installation gets the waste product for free.

Hydropower Energy

Russia is a well-established producer of hydroelectric energy, ranking fifth among the world’s producers of renewable energy. 15% of the country’s energy production comes from hydropower sources.

Currently, only about 300 small and micro hydropower plants with a total capacity of about 1 300 000 kW exist in Russia.

Russia hosts four of the 12 largest hydroelectric dams in the world. Two major projects are the following:

  • Sayano-Sushenskaya hydropower station. It is the sixth biggest in the world. Its reconstruction became a national priority. RusHydro operates this station and aims to complete the reconstruction in 2014.

  • Boguchanskaya hydropower station. This 3000 MW plant is also operated by the Rushydro.

Rushydro is the major player in the energy sector.

Wind energy

Russia has the highest wind potential in the world – 10.7 GW wind power resources. Most of its current wind production is located in agricultural areas. At present Russian wind sector is underdeveloped and now in the state of reconstruction and development. However in majority only Western companies dominate the market of wind power equipment.

In 2012 there were 10 large wind parks in Russia and 1600 small wind energy plants with a capacity ranging from 0.1 to 30KW each. Majority of those large wind parks has been installed within 2002-2003. During the following years mainly small-scale wind systems have been installed – only 250 wind turbines with capacity ranging from 1kW and up to 5kW.

There are around 50 companies on the wind energy equipment market in Russia in 2012. About 20 companies are equipment and turbines manufacturers. 13 companies are located in the Central Federal District. Domestic manufacturers mostly produce turbines between 100 kW and 250 kW. In average there are 4 types of turbines offered on the Russian market. Most competitive segment of turbines production is found in the range between 1kW to 15kW.

Rushydro at present manages the development of the sector and the main wind park projects.

Geothermal Energy

Currently geothermal energy is the third most commonly used form of renewable energy in Russia, after hydropower and bio fuel.

There are 47 geothermal resources of thermal water developed on the overall territory of Russia. At present there have been developed geothermal complexes with capacity ranging from 500 to 25 000 kW, using low and high temperature geothermal power generation resources.

Tidal Energy

Russia has a huge potential for tidal energy resources, although it is currently hardly used. The main difficulty in this sector can be found in the power transmission, since many of the prospective places are located in remote areas, and the electricity should be transferred through large distances.

Russia has already shown an impressive effort in this field with a tidal power station in Kislaya Guba, constructed in 1968, which has the fourth largest capacity among the world’s tidal power plants (1.7 MW).

UK – Russian Cooperation

Deputy Prime Minister A. Dvorkovich and SoS for Energy and Climate Change Edward Davey met in London to discuss UK – Russian energy cooperation. The meeting stressed the importance of continued cooperation in the area of energy efficiency and renewable energy and they expressed their appreciation for the work of the UK-Russia Consultative Committee on energy efficiency and renewable energy. It was agreed to facilitate a regular exchange of experience in the implementation of national policies in the field of energy efficiency.

Key opportunities

Although renewable energy is less popular in Russia than it is in Europe, there are still a significant number of large and pilot projects, which can be of great interest for UK companies. Russian companies are in the process of actively searching for overseas partners – seeking suppliers of both goods and services – consulting and knowledge.

Examples of projects in Russia:

  • Possible projects in geothermal energy sector include an 800 MW tidal power plant in the Barents Sea and the Penzhin Tidal Power Plant, which could become the largest power station in the world, with an installed capacity of up to 87 GW and an annual production of 200 TWh.

  • One of the most prospective projects is the construction of a new solar power plant initiated by a joint venture of Rusnano and energy holding Renova. The plant will have a 12.3 MW capacity, split evenly between photovoltaic (PV) and thermal power. The deal is worth US$97mn and the plant is expected to establish its presence by 2013.

  • Lukoil, a major Russian oil company, in partnership with the government of Uzbekistan and the Asian Development Bank, is planning to construct Uzbekistan’s largest solar plant, which will have an initial capacity of 100 MW, to expand eventually to 1 GW. Earlier this year Lukoil started to build its first 4 million dollar solar plant in Bulgaria.

  • In June, 2013 Sakhaenergo started a solar power plant construction in Yakutia. The new facility is Sakhaenergo’s third solar power plant and the first one built in the Arctic. The Dulgalakh solar power plant is comprised of 80 single-crystal silicon solar modules with a capacity of 250 W each. The plant generates electricity alongside the local diesel facility.

  • In March 2012, Russian developer Wind Energy Systems (WES) signed an agreement with the government of Karelia to build two 24MW wind projects in the districts of Kemsky and Belomorsky. Investment in the two projects is estimated at US$420mn, with commissioning scheduled for 2015-2016.

  • Great Energy Ru (subsidiary of Greta Energy inc.) handles the construction of the largest wind farm in Russia to be located in Yeisk, near the Black Sea. The wind plant will have a total capacity of 100MW. Planned investments amounted $200 mln. Operations are expected to start after2014.

  • There are currently more than 500 diesel power plants with combined capacity of 670 MW operating in the Far East, and many of these plants, located in remote areas, could be replaced by renewable energy sources in the near future.

Latest export opportunities in the Renewable Energy sector

Latest export opportunities in the Power sector

Latest export opportunities in Russia

Getting into the market

UK companies wishing to access the Russian market should bear in mind that the majority of Russian tenders demand a foreign company to have a representative in Russia.

Therefore only UK companies that have a Russian partner (distributor, agent, representation office) will have the potential to win tenders.

More about doing business in Russia

Contacts

Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits through our chargeable Overseas Market Introduction Service (OMIS).

To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local international trade team.

Contact your local international trade team

UKTI Events

UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.

Latest events in the Renewable Energy sector

Latest events in the Power sector

Major Events

REF-2013

2nd International Sustainable Energy Forum in Russia and CIS

www.ref-ru.com

Russia Power 2014

www.russia-power.org

Useful links

More about OMIS and other UKTI services for exporters

Sectors: Energy and Renewable Energy
Countries: Russia
Menu
Export Action Plan