More renewable energy projects to be implemented in Russia
Although Russia's conventional energy reserves are one of the world's biggest, the country has been also working on increasing the share of renewables in its energy mix in the past decade. Besides wind, solar and hydro projects, the government is stimulating the development of waste-to-energy recycling facilities in order to address the growing problem of waste management.
Russia continues to incentivise the development of renewable energy projects through a renewable energy capacity auction scheme, according to JD Supra. The latest auction, which took place in June 2018, has resulted in 39 renewable power projects. Most of the design capacity was awarded to wind projects (853 MW) followed by solar projects (148 MW) and small hydropower projects (40 MW). Wind and small hydropower companies had previously shown lower interest in Russia, but this year's auction was marked by a high level of competition among bidders.
Russia's high local content requirements for wind projects can now be met thanks to a new production facility opened in Nizhny Novgorod Oblast in May 2018. Danish Vestas Wind Systems has invested over 5,2 million dollars to produce wind turbine nacelles locally. Siemens-Gamesa Renewables, Lagerwey and other producers are also preparing to enter the Russian market. As for solar projects, the local content requirements are also high, but there are several Russian companies that produce solar panels.
In 2017, the Russian government included waste in the list of renewable energy sources entitled to benefit from capacity auctions and long-term capacity supply agreements. The first auction, which was conducted the same year, awarded long-term capacity supply agreements to five waste recycling facility projects aimed to reduce the amount of waste in Russian garbage dumps by 7% by 2023. Four of the projects are meant to be constructed in Moscow Oblast, and the fifth will be located in Tatarstan. Later, the government announced two more recycling facilities to be constructed in the south of Russia. The initial auctions conducted for these facilities in 2018 failed due to the absence of bidders, reportedly, due to high requirements that increased the financial burden on developers. A new auction is likely to be held for these projects on modified terms.
In addition, Russia has recently introduced new benefits for waste recycling facilities, including a reduction in environmental fees. Waste recycling companies will pay fees seven times lower than other industrial facilities because of their reduced negative impact on the environment. Contrariwise, landfill owners will see a 15% increase in fees by 2025. The measure is designed to make waste recycling more attractive as a business for waste management companies.