However, he noted, due to the nature of the support scheme for renewable energy projects, specifically capacity payments prescribed by Government Decree no. 449, “large scale wind and solar plants will most likely only be successful with the continued efforts of the federal government.”
“The probability of having the federal money reaching Sakha is not big,” insisted the journalist who spoke on the condition of anonymity.
But Thompson of IFC, which is part of the World Bank Group, is nevertheless more upbeat about non-hydro renewable potential in Russia’s Far East.
“There has already been concrete, albeit modest, success in the development of renewables in Russia…We still view Russia as having some of the greatest potential for the development and expansion of renewable energy in the world. We continue to feel that this potential is a dormant green giant, which is waiting to be woken up,” he said.
However, it is unfortunate that the authorities, he points out, have failed to give a clear signal to investors, to give them the confidence to expand into new markets.
“The renewable energy support legislation leaves room for interpretation and the envisioned capacities are not enough to support a new industry. As such, investors are asked to bear an unreasonable share of the risk. There is also the misconception that renewable energy will increase electricity prices for final consumers,” Thompson said.
The current price of electricity, according to him, does not reflect the real cost and, regardless of this, the impact of renewable energy installations on the end consumer would be quite marginal under the magnitude considered.
There is also heavy opposition by vested interest groups who do not wish to change the status quo, the expert maintained.
“Until these issues are dealt with, we fear the development of renewable energy installations to remain modest, which is unfortunate for a country that is in dire need of replacing its outdated generation capacity,” Thompson said.
And though Sakha perhaps should first be a great example of solar and wind potential development under the severe weather conditions, the federal government as well as the majority of Grachiov-like MPs is the ones who often jerk the reigns instead of embracing the developments.
“I do not want to be portrayed as a bad, against renewables grudging old-fashioned politician. In fact I am supportive of most of the green projects. But be they carried out from local budgets and funds, not forgetting the potential of our conventional energy resources, nuclear in particular. I just don’t buy the myths of solar and wind,” said Grachiov.
His words reverberates the majority of Russian lawmakers’ unilateral perception of green energy sources and uncertain return on investment in cold, distant lands like Sakha, despite it’s proven potential.
“In fact, the great deal of insolation [Sakha] boasts shows a great potential for development. The key is to balance the variability of the resource, specifically during the winter months,” Thompson insisted.
The Yakut government officials did not respond to RenewableEnergyWorld’s inquiries.
Lead image: Kolyma region of Russia via Shutterstock