Power policy

Belarus has very limited clean energy policies in place. The Belarus Energy Saving Program set out a modest target for 6% of installed power generation capacity to come from clean energy by 2020. The country fell short of this target, with just 4% renewable power capacity recorded that year. A new goal was laid out in February 2021, aiming for renewables to reach 8% of power generation capacity by 2025.

Belarus uses an annual quota system to advance clean energy build, which sets different technology thresholds. In 2020, the quota was for 6 megawatts (MW) of biogas, 19.8MW of wind, 7MW of hydro, and 1.5MW of wood fuel and other biomass. For 2021, the quotas are 10.47MW for biogas, 35.5MW for wind, 2.5MW for solar PV, and 0.9MW for biomass. Discussions to develop an auction policy date back to 2015. Small-scale industrial users can benefit from a 10-year feed-in tariff.

Belarus offers VAT exemption to clean power projects that are considered official investment projects – meaning developers have signed an investment agreement with Belarus. The 2010 Renewable Energy Law allows for renewable energy equipment related to generation, transmission, consumption, storage and conversion to be exempt from customs duties.

Power prices and costs

Power tariffs are subsidized and are some of the lowest for the region at around $86.15 per megawatt-hour (MWh) in 2020. Tariffs dropped between 2019 and 2020, with commercial, residential and industrial tariffs going from $95.67/MWh, $105.23/MWh and $82.42/MWh in 2019 to $84.46/MWh, $100/MWh and $74/MWh in 2020, respectively.

Power market

The main source of power in Belarus is natural gas, accounting for 84% of power generation in 2020. Biomass, biogas, and small hydro have been installed piecemeal in the past decade, but made up less than 1% of installed capacity in 2020. Small- and utility-scale solar installations have been picking up since 2015, totaling around 51MW by 2020. There is around 100MW of onshore wind installed.

Belarus has secured a small amount of clean energy investment in the last five years. Small biomass and biofuel investments dominated in the late-2000s, while the most significant deals in the last decade were small hydro investments as well as a large solar deal in 2019. Wind investment has been slowly picking up since 2017.

All segments of the power sector are overseen by vertically integrated state utility BelEnergo. There are six vertically integrated undertakers that perform activities on generation, transmission, distribution, and supply. While the government has stated that it would unbundle the power sector by 2025, no progress has been made so far. There is no legal framework supporting the decarbonization of BelEnergo.

Rules have been relaxed for power generation so that independent power producers (IPPs) have been able to enter the market. However, they can only sell power to BelEnergo, as bilateral contracts are not possible.

Doing business and barriers

As a fully electrified country with a state-owned utility, investment opportunities in Belarus may be more challenging than in other emerging markets. However, there is potential to reduce dependence on imported gas and install renewables. Should the country apply to become a contracting party of the Energy Community – which aims to create an integrated pan-European energy market – this could also bring rules on unbundling the power sector and open up new opportunities.

The state monopoly and weak enabling framework are barriers to clean energy project development. Subsidized power tariffs could pose a further impediment to market access for IPPs. Belarus’s border crisis and imposed sanctions have underscored the country and political risk, which are likely to be ongoing deterrents in the short- to mid-term. Meanwhile, the government’s priority for nuclear plant development could also impact clean energy investment.

EV market

The electric vehicle (EV) fleet in Belarus reached 1,810 vehicles in 2020.

EV policy

Exemptions on VAT and customs duty on imported EVs are available. Owners of EVs are exempt from paying public roads usage tax and parking fees for public parking lots.

The country is aiming to increase the number of EV charging stations to 600 by the end of 2021. Charging stations are exempt from VAT and there is a grant available for increased investment tax deductions according to the Tax Code for Charging Stations.

Buildings market

Belarus’s heating sector is composed of mostly district heating (45%), oil (30%) and direct electricity (11%).

The country has established requirements for energy efficiency in new buildings and buildings being renovated. For example, the standard heat-transfer resistance of building envelopes should not be lower than 3.2 Watts per square meter per degree Celsius for outside walls and 1 Watt per square meter per degree Celsius for windows and balcony doors.

Belarus offers loans for energy efficiency related investments for multi-apartment buildings, renovations or transitions.

Buildings policy

The government has yet to implement any substantive policy support in this sector and the low-carbon heat market remains at an early stage.