Content of August 2005 issue of Renewable Energy Bulletin

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Issue theme - RE support mechanisms.

1. SUPPORT MECHANISMS FOR RENEWABLE ELECTRICITY

   In the article it is pointed out that renewable energy, as new and advanced technology, needs financial and political support at the market introduction stage. The main 2 support schemes – with fixed price and with fixed quantity – are considered. It is shown, that none of the systems are truly market based. Mechanisms with feed-in tariffs and with quotas (supported by green certificates) are considered in details. Fixed price schemes proved their high effectiveness and provide investors with clearer view on future cash flows. In quota systems, the price of the renewable electricity is determined not by market, but by penalties for not meeting the obligations.

2. DEVELOPMENT OF FEDERAL LAW ON RENEWABLE ENERGY: SECOND TRY

   The second concept of Russian RE law is now being prepared by RAO UES. One of the RAO UES’s companies, “Hydro JGC” (Hydro joint generation company) is now in charge for development of renewable energy within RAO. This company considers renewable energy as long-term priority, therefore it recognizes as very important to introduce political and financial support schemes for development of renewable energy in Russia. Basing on the experience of world leaders in renewable energy development (mainly EU and USA), the set of proposed support mechanisms are elaborated; this set of measures is listed in the article as well.

3. RENEWABLE ENERGY SUPPORT MECHANISMS – WHAT RUSSIA CAN USE?

   The article describes how exactly works renewable energy support mechanisms, both quota and fixed price based. One of the main objectives of implementation of support mechanisms is to ensure sufficient increase of investments into renewable energies. Various measures are classified in the article, and, basing on the experience of EU and other countries with high level of RE development, the most effective mechanisms are recognized and recommended for implementation in Russia. Also, various myths about renewable energy existing in Russia are considered. There are draft calculations in the article of how much will increase the price of electricity if feed-in tariffs will be introduced. If current capacities of renewable energy will be doubled, the price of electricity will raise on maximum 0.0 ruble (0.028 eurocent). The advantages and disadvantages of green certification schemes are also considered in the article.

4. SUCCESS OF SOLAR ENERGY SUPPORT SCHEMES IN GERMANY

   Main support programs and schemes for solar energy in Germany are considered. It is shown, that Germany’s breakthrough in solar energy, both thermal and PV, is mainly due to introduction of proper legislation and support programs existing in the country since 990-th. This resulted to 0-fold increase of solar thermal capacities in the period from 99 to 2003, and the same increase for PV within 4 years – 999-2003, with further growth in 2004.

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