October 21, 2016

Realizing Russia's renewable energy potential in 2017

A recently declared Year of the Environment in Russia provides a golden opportunity to bring environmental issues to the public’s eye and create momentum for a much-needed green technology revolution in the country that is rich with natural resources and a highly skilled work force.

Solar photovoltaic (PV) panels of Perovo solar park developed by Activ Solar company, located near Klyuchi village, Crimea, Russia. Photo: Valery Sharifulin / TASS

When Vladimir Putin signed one of the first executive orders of 2016, On Holding the Year of the Environment in the Russian Federation in 2017, it happened against the background of many prospective trends conducive to the expansion of renewable energy.

The United Nations Climate Change Conference (COP21), held in Paris in December 2015, established a new framework of emissions reduction which, albeit containing no firm and legally binding commitments, infused a lot of environmental activists with hope. Furthermore, the ongoing oil price slump renders many hydrocarbon production projects – including many U.S. shale oil projects – economically unviable, further contributing to the growing appeal of renewable energy.

Russia needs the U.N. Framework Agreement to be implemented effectively and rigorously, given the dismal state of environmental affairs within the country. For the last four decades, the average year-round temperature in Russia has risen by 0.04°C per year, more than twice the global average.

Apart from getting warmer, Russia is getting rainier, too – every decade, the yearly averages rise by 2 percent. Although global warming might be considered a favorable phenomenon as the continuous permafrost zone would taper inevitably away until it became seasonal, it would entail a plethora of adverse consequences in other parts of the country, like the desertification of the Caspian Sea and Altay regions.

 Also read: Russia Direct Brief: 'Global Warming: Russia Comes in from the Cold'

Russia’s toxic environment needs to be cleaned up

The environment is far from being a priority on the economic and political agenda; however, almost omnipresent manifestations of environmental damage suggest the time is ripe for a change of mindset. In Norilsk, Russia’s nickel mining capital, annual sulfur dioxide emissions amount to almost 2 million tons. Industrial emissions of manganese (causing irreversible neurological damage) show no signs of abating and hover around the 830 tons per year mark. Emissions of mercury, a highly toxic element blocking blood vessels and producing death with less than a gram, have almost doubled year-on-year in 2014.

Moreover, statistics provided by the Russian Federal State Statistics Service and the Russian Federal Service for Hydrometeorology and Environmental Monitoring often reveal a great deal of behind-the-scenes machinations. For instance, in 2014, the last year for which the Ministry of Natural Resources and Environment of the Russian Federation provided information, Moscow, Ekaterinburg and Saratov were no longer on the list of cities with a dangerous level of atmospheric pollution. There has not been any progress on gas emissions, rather the threshold allowable concentration of formaldehyde was raised three-fold that year.

The size of Russia’s territory presents a challenge to be overcome, too – several federal subjects, including Adygea, Ingushetia, Chechnya and the Kabardino-Balkar Republic, don’t even have environment monitoring stations as of 2015. However, these federal subjects do not represent the kind of environmental risk as those of the metallurgical and hydrocarbon-producing regions.

This conceptual vagueness regarding Russia’s environmental policy explains a great deal why Russia’s efforts in the lead-up to the COP21 Summit were so tame. Russia’s intended nationally determined contribution (INDC), stipulated after the Lima Summit in December 2014, included the commitment to curb greenhouse gases to 70-75 percent of 1990 levels by the year 2030 – given that industrial emissions have fallen by 50 percent compared to the base year, one can hardly qualify such commitments as far-reaching.

If the year 2005 were to be taken as a base year, the findings would reveal a much more daunting reality. In fact, Russia’s carbon dioxide emissions have risen during the last decade, mainly reflecting a rise in the country’s energy sector’s carbon footprint. Although the Russian authorities managed to curb SO2 and NO2 emissions, those of ammonia continue to rise.

Russia’s green revolution, still on hold

Environment protection is a multi-faceted phenomenon, yet when preparing next year’s agenda, the authorities should make a point of promoting renewable energy. Although Russia’s fossil fuel abundance will not be fully tapped even in a hundred years’ time, Moscow ought to take all due measures not to be left out of the new technological revolution – the renewable energy one.

Russia indubitably has one of the main prerequisites – a highly skilled work force that benefits from many accomplishments of the Soviet era. Russia (the Russian Empire back then, in 1892) was the first to start constructing utility-scale wind turbines. Afterwards, in the post-war Soviet period, the country managed to build 7,000 small hydro-generating systems throughout the country and put into operation the first-ever tidal electric plant.

As of 2015, renewable energy excluding large hydro accounted for less than 1 percent of Russia’s power generation capacity. If one were to include large hydro, the number skyrockets to 17 percent – more than in France or the United Kingdom. However, when it comes to wind, solar and partially geothermal energy, Russia’s renewable potential is terrifyingly underdeveloped. Approximately 10 percent of Russia’s population has no access to centralized electric power supply, which combined with the fact that many dacha residents (around 16 million families own countryside houses) having no access to electricity, makes for a wide array of potential renewable-energy customers, especially in view of the unprofitability of importing diesel and coal to isolated sites.

Russia’s economically viable wind resources are situated along coastal areas – those of the Pacific and Arctic Oceans, and the Caspian, Azov and Black Seas. Although the bulk of the most promising locations are in no man’s land, many companies have been monitoring sites and conducting feasibility studies in the Far Eastern and Black Sea regions.

However, there are only four functioning wind power plants in Russia with a combined capacity roughly on par with Guyana or Curaçao (approx. 15MW). It is telling that after Crimea became a part of the Russian Federation, Russia’s wind power capacity increased many times over owing to Crimea’s 6 operational wind plants (74 MW) – however, most of them do not function due to uncertainties over their legal status.

Theoretically, solar energy production in Russia ought to be one of the least economically rational renewables sectors; however, during the last two years it has remarkably grown in stature, in no small measure due to the interest of businessmen close to the Kremlin. Viktor Vekselberg’s RENOVA and the Anatoly Chubais-led Rosnano invested heavily in Hevel, a solar system manufacturer based in Chuvashia, and surprisingly enough, during tenders held in 2014-2015, solar outperformed wind and geothermal with a project portfolio of almost 1200 MW installed capacity. The Southwestern part of Russia, particularly the Northern Caucasus, Black and Caspian Sea regions, as well as Southern Siberia and the Far East, constitute the most lucrative zones for solar development with an average radiation level of 1400 kWh/m2 per year – roughly the same as in Bavaria’s sunniest spots.

Although Russia’s geothermal production capacity has tripled over the last decade to 82 MW, its current level of development falls short of its potential (small Latin American nations like El Salvador or Costa Rica have almost twice as much). Thanks to the many geothermal sources available in Northern Caucasus, Kamchatka or the Kuril Islands, Russia could potentially rival the world-leading United States (with 3.4 GW of power generation capacity).

In fact, Russia’s geothermal abundance is such that much like the Ecuadorian government did regarding the Galapagos Islands, Moscow could declare Kamchatka and the Kuril Islands, with a joint power generation capacity of 2GW, a fossil fuel-free zone with a binding deadline to adhere to. Hitherto there had been no talks whatsoever of creating a fossil fuel-free zone in Russia, all the more so if it meant imposing a regional or federal carbon tax.

What’s holding Russia back?

Russia’s renewable energy potential has been neglected largely due to a gaping lack of coherent policy. The Dmitry Medvedev administration, with its active promotion of new technologies, was the first in modern Russia’s history to codify a tangible, albeit legally non-binding, renewable energy target – 4.5 percent of all electricity generation (more or less corresponding with the current global average), to be reached by 2020.

Since then, the missed provisional target for 2010 (2.5 percent) notwithstanding, there had been no institutional developments, with the notable exception of the Ministry of Energy’s 6-year operating plan, which foretold the commissioning of 5.87 GW renewable energy by 2020. Highlighting the confusion surrounding renewables in Russia, the plan stipulates that wind energy should become the leading focus of new projects. Yet, out of the presumed 3.6 GW capacity of wind power to be installed by 2020, only 190 MW have been installed to the present day. Solar energy tenders already cover 80 percent of their corresponding targets until 2020.

Of the many impediments standing in the way of renewables is the oil and gas lobby, which effectively coalesced into one with the government. For the renewables sector to be established upon firm foundations, the Kremlin should create a new governing body enjoying broad rights, preferably staffed with competent technocrats not liable to external meddling, even if on the part of former and current Kremlin officials.

In close coordination with federal authorities, regional governments should sign up for long-term and definitive tariff commitments so that potentially interested energy companies know what to expect. In this regard probably the hardest part of a much-needed push for renewable energy will be electricity pricing, since currently domestic gas prices are non-transparent and appreciably below market level. If Gazprom lobbying would turn out to be too intense to surmount, renewable energy might be reduced only to sites where it is not economically viable to burn fossil fuels.

Public awareness regarding global warming and the imminence of a “green” revolution leaves much to be desired – among the 40 nations surveyed by Pew Global in 2015, only the residents of Poland, Ukraine, Israel and China were less concerned about climate change than Russians (22 percent). For instance, waste separation is still a long shot for Russian cities; even Muscovites do not have a comprehensive recycling platform, only common-interest associations. This is in marked contrast to most Western nations, where climate changed was dubbed the top global threat.

The Year of the Environment provides a golden opportunity to bring environmental issues in the public eye and create momentum for a much-needed developmental realignment, bearing in mind the impending end of the petroleum epoch and Russia’s technological backwardness in the field of green non-polluting energy (excluding hydro).

Given the inadequacy of previous attempts to promote green energy and technologies and the current state of idleness, most government-set targets will not be met by 2020. It may not be too late to turn the tide, but for this to happen, prompt and vigorous actions are needed sooner rather than later.

The opinion of the author may not necessarily reflect the position of Russia Direct or its staff.

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