Power policy

Russia aims to increase the share of renewable energy power generation from under 1% currently to 2.5% by 2024. In order to encourage renewable energy uptake, Russia has implemented auctions and net metering. To date, there have been 8 tenders awarded with varying annual capacity. In 2020, about 240 megawatts was awarded. The net metering policy was implemented in 2021. It applies to systems that are a maximum of 15kW and can only provide energy to where it is located. Russia also has tax incentives, such as accelerated depreciation and tax exemptions through special economic zones.

Power prices and costs

In areas with unregulated pricing, retailers offer peak and offpeak pricing. The average residential and commercial tariff increased in 2020, while the industrial tariff decreased.

Power market

Russia’s power market is completely unbundled. Consumers in the retail market are able to choose their supplier and change at any time. Additionally, commercial and industrial projects are growing in popularity, especially around renewable energy. However, the generation market is dominated by several large players and transmission is done primarily by RusHydro.

Russian power primarily comes from natural gas and coal. There is a small uptake in renewable energy, primarily wind power, which grew over 500% between 2019 and 2020. Power prices are very high in Russia, so while producers are not in high debt, many consumers are. The government provides high subsidies on fossil fuel, making producing renewable energy less attractive.

Doing business and barriers

Russia has both a retail and wholesale market. Installations up to 25 megawatts participate in the retail market rather than the wholesale market. The rules for interconnection are very clear.

Russia has 100% electrification. Peak demand has been decreasing since 2018. High local content requirements for renewable energy projects have been a deterrent for developers in the past and are expected to continue rising. This, however, is no longer such a challenge as Russian industry for renewables has developed considerably. Offtaker risk is very low.

EV market

Russia’s electric vehicle (EV) market is in its infancy. The country recently drafted a "Concept for the promotion of electric transport to 2030" which includes an EV production target of 217,000 electric vehicles internally by 2030 (28,000 by 2024) and that in 2030, EVs will constitute 10% of total vehicle production in the country. Charging infrastructure is also included in this draft, with Russia proposing to install 73,900 charging stations by 2030. This program has yet to be approved.

Electric cars remain more expensive than internal combustion engine (ICE) vehicles in Russia and are bought by wealthy individuals who place value on the status of owning the technology, rather than on the lifetime cost savings. Importers will have to pay as much as 15% of the customs value of the vehicles by 2022, which will likely be passed on to EV consumers.

EV policy

Electric vehicle owners enjoy certain incentives such as free parking and exemption from road taxes in certain cities. However, there are many barriers to EV uptake in the country. Furthermore, ministry officials have explicitly stated that they have no plans to dissuade consumers from purchasing ICE vehicles and that they will be allowing market dynamics to dictate the uptake of electric vehicles in the near term, while the government focuses on promoting domestic production of clean transport. Additionally, Russia continues to subsidize fuel prices.

Buildings market

The country doesn't have a low carbon heat target or roadmap, but it does have some legislation targeting energy efficiency. Most recently, a roadmap for improving energy efficiency in housing and communal services was implemented in 2017. Russia also has an energy efficiency roadmap for housing and communal services. However, experts perceive that the new plan is not enough, as it doesn't provide proper economic incentives for energy efficiency measures to be implemented. Previous goals set out in 2009 were postponed by 10 years.

Buildings policy

Russia implemented energy performance standards in 2018. These are part of an overall effort to improve the efficiency of Russia's infrastructure, and incorporate better materials etc. New sets of building codes and standards have also come into force this summer, with energy efficiency stipulations.