April 8th, 2021 at 11:14 AM by admin

In January 2009, the government approved the government`s policy to improve energy efficiency (the policy). When adopted, the directive covered the period up to 2020 and provided important directions for the development of renewable energy projects in Russia. Subsequently, the directive was significantly amended. Through these amendments, the government has defined the current legal framework on the basis of the state-backed capacity supply system and has extended the impact of policies over the period up to 2024. However, potential capacity providers are not only included in project tenders. The companies join forces and form consortia involving Russian international participants, foreign investors and local participants responsible for problems that may arise on Russian territory. These structures enable the creation of powerful teams capable of effectively solving problems that arise. Currently, the wholesale electricity market and the capacity market operate on Russian territory. The main commitment of a potential supplier under the agreement is to create a facility for renewable energy within the agreed capacity, location and schedule parameters. The agreements still contain provisions for significant penalties for delays in capacity supply. The main idea of the capacity supply system is to move from a “premium” component to a counterparty for the electricity generation capacity provider. The consideration is calculated on the basis of the cheap fixed rate.

A first step for potential market participants would be to comply with the rules for wholesale electricity and capacity exchanges, established by Decree 1172. Participants are required to enter into a wholesale electricity and capacity contract and to acquire members of the not-for-profit partnership association, the Market Council. A binding form of accession treaty is approved by law and cannot be renegotiated or amended by market participants. Once the accession treaty is concluded, the trader is considered to be a participant in the wholesale capacity market. In particular, the process for concluding a capacity supply agreement includes the following phases. Capabilities are offered to potential suppliers once a year as part of a tendering process organized by the ATS. Potential suppliers are invited to submit their bids in accordance with the terms of Order 449. Along with a technical description of the project, the offer defines the location of the renewable energy facility and financial guarantees on the commitments of the potential supplier. After the bids are submitted, the ATS selects the winners of the tender and enters into energy supply agreements with them. The supply of capacity generated by renewable energy sources is one of the mechanisms used in the wholesale capacity market. As noted above, this mechanism is structured by the capacity supply agreements concluded in the context of tenders for the selection of investment projects in the affected areas.

As noted above, the Russian wholesale capacity market has not evolved at the project level, which is typically the case in international energy markets, since russian market activities are strictly regulated by law. We expect the market to evolve and include segments that are not currently within the scope of Order 449, such as. B energy supply sectors in remote areas. Russian policy supports these developments. Today, Russian renewable energy offers more potential and opportunities than ever before. The Russian electricity market is a two-tier electricity and capacity market (wholesale and retail trade).