Russia's power market continues to be dominated by traditional energy sources despite emergence of renewable energy, says GlobalData
October 23, 2018 (Investorideas.com Newswire) The ongoing wave of renewable power auctions has generated interest in Russia's renewable power sector among foreign investors, but it is unable to contend with the dominance of traditional power sources, according to GlobalData, a leading data and analytics company.
GlobalData's latest report, 'Russian Federation Power Market Outlook to 2030, Update 2018 - Market Trends, Regulations, and Competitive Landscape' reveals that the abundant availability of gas, uranium, and hydropower resources in the country along with government policy that remains favorably disposed towards these resources, will help maintain their dominance in Russia's power mix in the future.
Chiradeep Chatterjee, Power Analyst at GlobalData, commented, "The primary driver for the growth of hydropower and nuclear power in the Russian Federation is the government's energy strategy. This states that electricity generated from these two sources should make up nearly half of the total electricity generated by 2030."
The Russian government has desisted from maintaining a comprehensive policy for the development of non-hydro renewables. Instead, it has continued to depend on the cheap availability of conventional energy sources which helps to keep power tariffs low.
Russia has been holding non-hydro renewable power auctions since 2013, but the bid prices for renewable power projects has been falling over the years making them more competitive in comparison to the conventional energy sources.
Chatterjee continues, "The Russian renewable power sector is thus becoming more cost-competitive and chances are that in the future, renewable electricity might be able to challenge gas-based electricity in the country."
Due to this, non-hydro renewables, mostly wind and solar power, are expected to post the highest growth trajectory between 2018 and 2030 compared to conventional energy sources.
Non-hydro renewables are expected to constitute only 3.9% of the total installed capacity of the country in 2030 compared to 66% of thermal power, 19.3% of hydropower, and 10.8% of nuclear.
The development of wind and solar power has also been stunted by the fact that Russia's grid is not synchronized to the European grid. Wind and solar power generation are thus only open to domestic consumption and cannot be exported to Europe, where there is a large and lucrative market for renewable power.
Chatterjee concludes, "Although the Russian Federation is not a member of the EU, it could support the efficient use of electricity by synchronizing its grid to European standards."
Notes to Editors
- Information based on GlobalData's report: 'Russian Federation Power Market Outlook to 2030, Update 2018 - Market Trends, Regulations, and Competitive Landscape'
- Comments provided by Chiradeep Chatterjee, Industry Analyst at GlobalData
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