We do highlight that as part of the Energy Strategy ----, the Russian government approved a programme offering incentives for investment in wind, solar and small-scale hydropower projects. The decree, paved the way for USD-.-bn of funding to be released, with renewable electricity acquired through power purchase agreements (PPAs) and an auction system to encourage private investors to enter the market. ...The past three tenders have awarded projects worth more than -.-GW in non-hydro renewables that are required to be commissioned by ----. This number stands in stark contrast to the more than -.-GW of wind and solar that represents the upper limit of the combined annual capacity additions between ---- and ---- allowed under Decree No. ---, and therefore could have been legally possible to award. Overall, although above numbers indicate the significant preference of solar projects over other renewables by investors, we note that the depreciation of the rouble has adversely affected many of these projects. ...This number stands in stark contrast to the more than -.-GW of wind and solar that represents the upper limit of the combined annual capacity additions between ---- and ---- allowed under Decree No. ---, and therefore could have been legally possible to award.
...Despite there being vast climatic potential for renewable energy generation, Russia s electricity mix remains dominated by hydrocarbons and nuclear power, and the cheap price of fossil fuels means there is little economic incentive to diversify. The country has historically proven slow to adjust to new energy realities. ...This growth is forecast to slow significantly from ---- onwards. Indeed, capacity expansion in the early ----s is currently expected to be based primarily on delayed projects that were awarded in the past tenders, while we do not see the Russian government incentivising renewables enough to justify greater growth expectations beyond. This translates into an average growth rate of -.- for non-hydro generation, which means non-hydro renewables are expected to make up some -.-- of total electricity generation in ----. ...However, this aim was lowered to -.- in May ---- when the government proposed the Renewable Energy Source Development Measures package, which aims to encourage investment in renewable energy projects, up to around -GW in total by ----. With the economic situation having deteriorated significantly since then, we see little room for the Russian government to prop up a nascent renewables sector.
...The investment environment in the Russian renewables segment has become even more challenging, through the mentioned local content requirements (LCRs) introduced in Decree No. ---. This was depicted as a boost to the domestic renewables equipment manufacturing sector in Russia and is seen as part of the wider goals of Russia s upcoming Energy Strategy ---- (scheduled to be passed in ----), which reportedly envisages to minimise the import of equipment and resources to the fuel and energy industries to less than -- by ----. ...
