The Russian government approved new market rules for RES generation
The Government of the Russian Federation, by its decree of March 5, No. 328, approved the rules of a new program to support the renewable energy sources (RES) industry for the period 2025–2035. The document was published on March 6 on the official Internet portal of legal information.
The resolution does not define the key parameters of the program, in particular, the amount of support (earlier this figure was agreed at 400 billion rubles, but in February the Ministry of Energy of the Russian Federation proposed to reduce it to 306 billion rubles). These parameters will be approved by an order of the Cabinet of Ministers, which should be adopted before the publication of information on the next selection of renewable energy sources investment projects, scheduled for May 2021. At the same time, the first tenders under the new rules should take place before September 4.
One of the key innovations of the decree is the transition to project selection at a one-part price per kilowatt-hour (includes capital and operating costs). Now, competing, investors in projects for the construction of solar and wind power plants (SPP and WPP), as well as mini-hydroelectric power plants with a capacity of up to 50 MW, with commissioning of capacities in 2025-2035, will declare a one-part price, which in real terms will be fixed for 15 years. Capital expenditures will no longer be a parameter for comparing the effectiveness of investment projects. SPP projects for 2023 and 2024 from the first renewable energy support program (480 MW) will also be selected at a one-part price.
At the same time, the return of capital itself and profitability will still be carried out on the basis of CPA. Significant changes will affect the formula for determining the price of capacity, explains the Russian Renewable Energy Development Association (RREDA). Payment for capacity now directly depends on the volume of generation, and the non-penalized corridor in the amount of 25% has been abolished.
The signed decree retains provisions on the responsibility of generators for deviations from the planned production indicators. According to the estimates of the Photovoltaic Industry Association (PIA), cited by the Kommersant newspaper, in the current version of the document, with a prolonged decrease in output relative to the plan, in the first year of operation, the generator may lose at least 30% of the total payment for all 15 years. In some scenarios for deviations, the generator can lose up to 80% of the total payment, indicate in the RREDA.
RES facilities will begin to be fined, along with thermal generation, for deviations from the production plan in the day-ahead market (DAM) - the penalty will be 30% of the DAM price on a specific day, the PIA noted. At the same time, renewable energy facilities depend on external factors, unlike thermal power plants, and it is almost impossible to predict the weather 15 years ahead, emphasizes a source of Kommersant in the industry.
The decree also introduces fines for nonfulfillment of the export indicators (the share of proceeds from the sale of renewable energy equipment abroad in the cost of the plant). For SPP and WPP, the fine in 2025-2029 will amount to 10% of the guaranteed payment, in 2030-2032 it will grow to 21%, and in 2033-2035 it will reach 33%, Kommersant notes. The resolution also increases fines for insufficient localization of equipment for renewable energy facilities: the penalty for solar power plants is 85%, for wind farms and mini-hydroelectric power plants - 75%.