Russian Federation

Energy Strategy of the Russian Federation for the period up to 2030The main policy document in the energy sector is the Energy Strategy of the Russian Federation for the period up to 2030, which was approved in November 2009 by the Government and replaced the previous Energy Strategy of the Russian Federation for the period up to 2020.The Energy Strategy up to 2020 outlined several main priorities: an increase in energy efficiency, reducing impact on the environment, sustainable development, energy development, and technological development, as well as improved effectiveness and competitiveness. The main targets set by the Energy Strategy up to 2020 can be summarized as follows:Reduction of the specific energy intensity of GDP with the correspondent growth of energy effectiveness of economy;Moderate growth of expenses for fuel and energy supply of the population in 2001-2020;Increase of the annual income from the fuel and energy complex activity;Expected growth of energy exports of 45-64 per cent by 2020.The strategy outlines three phases for the process of the national Fuel Energy Complex (FEC) transformation. In order to make the FEC an additional engine for the recovery of the domestic economy, it is foreseen to reorganize it during the first stage (2013 to 2015). In the second phase (2016 to 2020/2022), several cutting-edge, highly efficient innovations and technologies are to be introduced; greenfields are to become operational and significantly expand the sector’s production and export capacity. In the period of 2021/2023 to 2030, considerably improved energy efficiency coupled with enhanced use of non-fuel energy sources (nuclear, solar, wind, etc.) are expected to boost the economy.The overall goals of the strategy can be summarized as follows: energy security, energy efficiency of the domestic economy, economic efficiency of the national Fuel Energy Complex and ecological security of the national fuel energy complex.The legal framework for energy efficiency is based on the Law on Energy Saving and on Increasing Energy Efficiency and on Introduction of Changes in Selected Legislative Acts of the Russian Federation (Federal Law No. 261, signed by the President on 23 November 2009) and on various Codes and Federal Laws, such as the Civil Code, the Tax Code, the Forestry Code, the Customs Code, the Urban Development Code and the Laws on Electricity Sector and on Municipal Housing Sector.The new law replaces the previous Law on Energy Efficiency (Federal Law No. 28), which was in force since 1996 and which was distinguished by its declarative nature and absence of real measures allowing real development of energy saving technologies in the Russian Federation. Furthermore, it provides the regulatory framework for implementation of the decree of the President of the Russian Federation “On Measures to Increase the Energy and Environmental Efficiency of the Russian Economy”, which was adopted in 2008, thus marking the first step in a comprehensive revision of the regulation on EE of the Russian Federation The presidential decree envisages energy intensity target reduction of 40% by 2020.There is no specific law on RES. However, the Federal Law No. 35 “On the Electric Power Industry” as amended by Federal Law No. 250 “On Amendments of Legislative Acts of the Russian Federation”, related to reformation of the United Energy System of Russia (ratified on November 2007), contains a number of measures to support generation of electricity from RES. First of all, it constitutes the set of energy sources considered as renewables.Furthermore, the law obliges the government to adopt long-term state policies in the area of RES by fixing the share of RES in production and consumption by periods and years. The law envisages federal budget subsidies, including coverage for grid connection costs for RES producers with a capacity below 25 MW. It obliges grid companies to purchase preferentially renewable energy for the compensation of their transmission losses. Also, the law introduced a premium to the wholesale market price for RE.In 2009, a Government Decree set a new target for RE, to reach 4.5% by 2020 from its current 0.5%.  A modest but positively oriented target demonstrates growing attention towards renewable energy.White Sea EnergySome of the Russian Federation regions have established or are establishing regional EE programmes. One example of such a regional initiative is the territorial project of the region of Archangelsk, called White Sea Energy. Jointly with the Russian energy company Roskommunenergo, the administration of the Archangelsk region established a public-private partnership programme. The participating financing institutions are the Russian banks Mosuralbank and Sberbank, as well as the Czech Export Bank and the Foreign Trade Bank of the Russian Federation. The aim of the project is the comprehensive optimization and development of the power supply of the regional enterprises and the housing sector. Furthermore, it is envisaged to implement efficient, high-tech and ecological projects in the electricity, industry, and municipal services sector in the Archangelsk region. The third project task comprises the improved competitiveness of the enterprises in Archangelsk through the optimization of the energy costs. The programme envisages investments of USD 1 billion.Russia Renewable Energy Program (RREP)Supported by the Global Environment Facility (GEF) and the International Finance Corporation (IFC), RREP was launched in December 2010 to create a platform that can support at least the beginnings of a significant share for renewables in Russia. Its work will see the programme team co-operating with the Russian Energy Agency, RusHydro and other key players to develop favourable policies and instruments. It will work with the private sector to encourage project development and generally raise the profile of renewables, especially in regions where it could have a significant early impact. RREP hopes to be the catalyst for the addition 205 MW of RE over the five years of the programme. The IFC says it will have around USD 150 million to invest when the time is right.Premium and certificates schemeRussian authorities have realized that the national renewable energy objectives cannot be achieved without additional financial support. To enable the financial viability of RE installations, they have created a support scheme. The central element of this scheme consists of a system of ‘certificates’ and ‘premiums’ that provide additional revenues to the operators of renewable energy installations. Moreover, the authorities have established a scheme for the compensation of the network connection costs of renewable energy installations with an installed capacity not exceeding 25MW.  In addition, the Federal Grid Company is obliged to cover the electricity losses on the transmission grid in priority with purchases at regulated prices of electricity produced from renewable energy sources.  Furthermore, renewable energy installations in Russia could, at least until 2012, benefit from support under the Joint Implementation (JI) mechanism of the Kyoto Protocol. The national authorities have developed the required domestic legal framework for the approval of such projects and the issuance of Emission Reduction Units (ERUs).Renewable energy installations that are connected to and inject electricity in the network of EU Member States (ie the network supervised by the European Network of Transmission System Operators for Electricity (ENTSO-E)) could also benefit from support under the so-called ‘joint projects’ mechanism created by the new Directive of the European Parliament and of the Council on the Promotion of the Use of Energy from RES.