Russian Challenges in Adopting Renewables
Despite Russia’s high clean energy potential and determination in adopting larger shares of renewables in its energy sector, the country has seen minimal growth in green energy when compared to its regional neighbours, China and India.
As the world’s greatest net exporter of non-renewable energy, Russia’s dependency on its oil and gas industries present the first hurdle to its renewable energy development. When considering that these industries constitute more than one third of its federal budget, two thirds of the country’s exports and generate 15% of its GDP, one could imagine why Russian interests would tend to protect its oil and gas.
With national control over its major oil prospecting and producing companies, Gazprom and Rosneft, and the nation’s largest oil transport infrastructure company, Transneft, there is further reason for Russian subsidies and preferential treatment for non-renewables. This is seen in recent governmental assistance and capital in Artic drilling projects and oil transport. The country’s national grid is also own by the government, which presents greater bureaucracy to renewable initiatives and private investment in infrastructural technology. Coupled with historic lows in oil prices, the decrease in governmental revenue reduces potential capital for new and ongoing renewable initiatives and maintenance.
Not only does governmental interest create high barriers of entry in the Russian energy sector, renewables also face geographical and domestic challenges. With over 20 million Russian families spread over remote pockets in Siberia and the Far East, these families are not connected to the central grid and rely on diesel generators for electricity. While decentralized renewable initiatives maybe promising, citizens are complacent with decades of governmental welfare and oil subsidies, making the installation of regional renewable sources inessential. In addition, the Northern Freight system delivers subsidized goods, such as food and petrol, to these remote locations. As there is no monetary or political incentive to promote renewable initiatives in these remote regions, there is often little progress and minimal regional and local support.