Russian government to introduce a green tariff for renewables in 2017

15.04.2016

The Russian government plans to introduce a green tariff for domestic renewable energy producers. This should help the country to significantly reduce its dependence on conventional energy sources, in particular oil and gas, for which global prices have declined significantly during recent years.

According to the government’s plan, the green tariff will only be applicable in regions of Russia that have large facilities for the production of renewable energy.

The new tariff will be introduced in Moscow and the surrounding areas, which are among Russia's richest and most economically developed regions. It will be introduced in other regions of the country later on, in particular the Far East and the Siberian provinces of the country, which have frequently experienced energy shortages in the past.

The amount of the tariff is currently under consideration. According to sources close to the Russian Minister of Energy Alexander Novak, it will initially be set at the level of EUR 0.12 per kw/h and may be increased by 2020 or 2022. The introduction of the tariff will require government investments of approximately RUB 60 billion (USD 900 million).

The green tariff will be offered to domestic as well as foreign companies that are planning to invest in establishing facilities within the territory of the country. The Russian federal government and the authorities of Moscow also welcome the establishment of joint ventures with the participation of foreign investors to implement projects in the field of renewables.

The project is being personally supervised by Arkady Dvorkovich, the Deputy Prime Minister of Russia, whose responsibilities in the Russian government include the development of renewable energy.

According to Anton Kulbachevsky, head of the Moscow Department of Natural Resources, the development of renewables will be one of the top priorities for the Moscow city government during the next several years. The government is planning to shut down most of the industrial enterprises that have a negative impact on the environment of Moscow by 2020 to 2025, and conventional energy sources will be replaced by renewables.

The green tariff will officially be introduced in Moscow and other large cities, such as Saint Petersburg, starting in February/March 2017 after the Russian Parliament (State Duma) elections, which are scheduled for the end of the current year.

According to calculations by the Russian Ministry of Energy, the introduction of the green tariff will not result in a significant increase in prices for consumers, and the average growth rate will be between 3% and 4%.

Eugene Gerden

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