Renewable energy sources on Kamchatka and in Yakutia – the symbol of the new power industry of Russia

Patrick Willems, presenter of the IFC for renewable energy deployment in the territory of Russia spoke about the economic efficiency of renewable energy projects in the far East, their importance for the whole country. According to news agencies at the end of February was the news that JSC "RAO energy system of East" signed a contract with the Khabarovsk Krai. Such agreements were previously signed with Primorye, Yakutia and the Kamchatka Krai.

The agreement signed under the cover of the program "RAO energy system of East" on the construction of renewable energy facilities. Leading industry experts argue that specifically in the far East of domestic energy together with the authorities of regions can achieve maximum progress in the field of renewable energy. The interview was conducted with the Programme leader of the International financial Corporation on implementation of renewable energy in Russia Patrick Willems, one of the main ideologists of the alternative energy in Russia.

Mr. Willems, your employees call you a romantic – dare to come in the oil and gas country with the aim to promote the development of more expensive renewable energy. Your first report is called "waking the green giant". The giant woke up?

Unfortunately, the giant is still in hibernation. But the good news is that today it tries to Wake not only the IFC. Due to the large number of seminars, conferences and other events that are systematically in recent years held in Moscow and the regions, in this thread we were joined by many allies. And thanks to the efforts of companies in Siberia, in the Belgorod region, in the far East, we saw a small but effective examples of retail generation based on renewable energy.

Solar power plants in Yakutia and wind stations on Kamchatka – it is today. And it gives hope that tomorrow the green giant (Russia — she has unique resources in the field of renewable energy) to Wake up completely.

In the first reports on the topic of renewable energy, who presented the IFC in Russia, barely mentioned the potential of the isolated energy areas. Today the rhetoric has changed – now in isolated areas of the Far East recognized leadership. When you see the potential?

— I agree, we were wrong. Did not realize that in isolated areas vozobnovlyaemaya will Resiistant to develop rapidly. And it's not only our confusion that was caused by the installation of the government goals for the development of renewable energy. In 2010, all believed that by 2020 in Russia should be produced 4.5% of electricity on the basis of renewable energy sources. It's about 15 GW of power. But the greatest potential that is possible today in isolated systems – 1 GW. Therefore, if we accept the truth of the development of the huge industry of RES in the near term – this 1 GW could be mistaken for error. As we've got.

— So, time to pay attention to isolated areas has prevented too large-scale approach at the government level?

— When we realized that the target of 4.5%, you can see flexible – we changed our program. We began to look at where the "green" projects will be profitable today. To look for conditions, where the availability of allowances from the market or state will not affect the development of renewable energy. We believe that such conditions prevail in most areas of the Russian regions that are isolated energetically.

— Makes the economic efficiency?

— You are aware of the cost of electric energy in isolated areas of the Far East? Here are some of the Yakut village: MP 27, and 25 rubles/kWh, Ucuga – 33,77, Yunkyur – 54. I assure you that when these and other points will be supplied with hybrid equipment, the economic benefits of diesel fuel not just pay for all investments, but will also give an additional effect that can be spent on the reduction of government subsidies to support diesel power in remote areas.

— RAO ES East has announced a significant programme of construction of renewable generation in remote areas – more than 100 solar power plants, some tens of wind power plants.

— Of course, we do not know the green giant said. The potential of renewable energy in isolated areas is minimal on the background effect, which in the whole Russian state, if we approach the development of "green technologies" in a systematic way. And these examples will certainly entail a change of attitude towards renewable energy at the regional and governmental level.

For me it is gratifying to note the fact that Alexander Novak, Russian energy Minister, publicly asserted several times that the economically beneficial renewable energy projects in isolated regions.

— How to support your optimism manufacturers of equipment and technologies? After all, our climate, and especially our winter has ruined a lot of initiatives.

— Let's be realistic. Where there is great potential for renewable energy development? Only four countries – India, Brazil, Russia and South Africa. Therefore, for each manufacturer of the Russian market – a leap in development. And the climate of our country is not so much a limitation for market leaders and ambitious challenge.

Another issue is that the initiative can ruin excessive regulation of the industry. Requirements established by Russian legislation regarding renewable energy projects in the area of wholesale market has significantly diminished the enthusiasm of the producers. This refers to the requirements for localization – these requirements are difficult to fulfill in a limited time frame. Especially to perform so that the technology worked effectively, and not so that she was forced to debug every day.

The state would be a powerful stimulus signal to the community of renewable energy enthusiasts that the government intends to develop this market. Insufficient legislation and the words must have a valid intent, around which it will operate.

For example, we expect that for all projects in isolated energy areas will create its own regulatory framework. And it is not known whether it will contain specific requirements for localization, to what extent. Too high expectations will only hurt the development, which began. Isolated systems can continue to remain free "testing ground" where you can try new solutions and approaches to run the equipment, etc.

— What steps should I take regions to support emerging areas of renewable energy?

— Bold decisions. Renewable energy is a new sector for Russia, and here the result not always will correspond to calculations which are initially. We expect the government to have the political courage and willingness to endure the risks of failure.

Highlight three aspects. First, the energy efficiency, which includes renewable energy projects. The regions should use this tool more actively in the development of "green" projects.

Second, the regions will help the investors to get the pricing decisions for more than a year. Modern tariff policy is the main obstacle to participation in renewable energy projects financial institutions.

No Finance company will not Finance projects where the rate stated is only for one year. On the contrary, if the project is long-term rate – to join the multitude of potential lenders.

Thirdly, the best that can do the regional authorities to preserve subsidies, which they release today on diesel fuel to those who want to build generating facilities on the basis of renewable energy sources, creating a source for the refund of investment and profit. And this example applies not only to the Far East, this mathematics fits in the Tomsk region. If Tomsk promise that all of the benefits of fuel which will be able to reach the operator in an isolated power node, it will receive a profit – and in this region, we get rapid development of renewable energy. This is despite the fact that diesel here costs less than in Kamchatka and in Yakutia.

— For what period of time the regions must guarantee the continuation of subsidies on fuel for the success of projects?

— At the time of return of the investment for 7-10 years.

— What income would you consider fair in this market?

The answer depends on the country's economic growth and inflation. Today, normal income is 12%. In Russia, many require more, but for me the fair was this figure.

— So you ready to defend the 12%?

— I'm ready for the 12%, because you understand that all projects are partially financed from own and borrowed capital. But basically, if you look at how can here to rescue their own capital, the income can reach 18% or higher.

— Not such a high yield that investors get in line.

— But it allows you to make a real change in the structure of generation, partially replacing the production of diesel power plants by energy on the basis of renewable energy sources. In addition to commercial interests and expectations of the state. It is the budget money used as subsidies for energy in remote areas of Russia. And the region it is interesting to give businesses ensure a profitable project, so at the end of the payback period was a reduction in subsidies.

— IFC program to implement RES last summer in Russia interregional conducts a major study of the possibilities of alternative energy in the far East of Russia. Can you please first results? Do they live up to your expectations?

— We are not ready to announce the results of the study have not yet come to an end. It is not only our job, it's a shared project with JSC "RAO energy system of East" and we must work together to determine the extent to which to publish the results.

— When will the IFC Program on renewable energy deployment in Russia, what happens next?

— The program was supposed to end this year. But we were able to prove to partners and managers that have only just started to get the first significant results of their work. The main partner of the Programme, the Global environment facility. He agrees completely with our results and conclusions. The programme has been extended until June 30, 2016.



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