Media about RUSNANO

Green Energy Foundation. Chubais Came Up With an Idea How to Develop Renewable Power Generation in the Far East

08 September 2017

By Ekaterina Derbilova, Ivan Peschinsky

A special foundation should be created, and projects should obtain state guarantees and stable tariffs

The Chairman of the Management Board of Management Company RUSNANO Anatoly Chubais invited the government to set up a foundation for the development of the alternative power generation in the Far East. He said this at the session on renewable power generation of the Eastern Economic Forum. According to Chubais, this is a mechanism for guaranteed return on investment in the construction of power plants on renewable energy sources (RESs), state guarantees for the rate stability for a certain period. Now, he believes, this problem for the Far East is not solved in any way. “We believe that the construction proposed by us, creation of the Foundation for the development of the alternative power generation in the Far East, is absolutely operational in our budgetary realities,” Chubais said.

The proposal to create the foundation was made by RUSNANO, Chubais specified to Vedomosti. According to him, the state may need to contribute about 2 billion rubles to the authorized capital of the foundation, the state guarantees may amount up to 20 billion rubles. Other companies are expected to become members of the foundation, the source in RUSNANO says. He did not disclose any details.

There is no market in the Far East, and, as a result, there is no mechanism for entering into a capacity supply agreement (CSA guarantees a repayment of funds for investors with the 14% base yield), Chubais recalled at the session. Parameters for the Far East should be comparable, he believes. Chubais has already discussed the new mechanism with relevant ministries and departments and hopes to get government support by the end of the year.

The representative of the Ministry of Economic Development and Trade said that the issue was being worked out. His colleagues from the Ministry of Energy and the Ministry for Development of Russian Far East did not respond to the requests of Vedomosti.

Deputy Minister of Energy Anton Inyutsin confirmed that on August 27, the government commissioned the creation of the foundation. The departments need to review it and express their opinions within a month. He agreed that the instrument of guaranteeing investment for renewable energy sources of the Far East was important. The General Director of Hevel (RUSNANO and Renova JV, engaged in the construction of photovoltaic power plants), Igor Shahrai noted that if there were guarantees of return of investment, the plans for construction would be for tens and hundreds MW rather than for 3–8 MW.

Anatoly Chubais: “In 2024, 3,500 MW of wind energy, and 1,500 MW of solar energy will be generated in Russia. This is a reality measured by tens of billions rubles, which are already appearing before our eyes.”

Today, the lack of long-term guarantees of return of funds is a major barrier to large-scale implementation of investment projects in the Far East, the representative of Hevel added. The second necessary condition was raising funds at a low or preferential rate, he noted. The investor can not raise cheap long money, because there is no orderly mechanism of guarantees, the interviewee of Vedomosti, a representative of one of the companies interested in investing in RESs in the Far East, agrees.

The idea is correct, at least in part of long-term tariffs, it should be accepted, an official of one of the commissioned agencies believes. The foundation is a matter of discussion, he says, on the other hand, the rules change constantly, someone has to insure these risks, too.

RusHydro received an offering to join the foundation capital, an employee of this company said, but he does not know about the decision. The representative of RusHydro did not respond to the request.

It is assumed that the state through the foundation will provide guarantees of return on investment, and the foundation will protect projects from non-payment of consumers, the source in RUSNANO continues. Long-term guaranteed tariffs for such projects should be enshrined at the federal level—this is a part of the proposed mechanism, but not the foundation’s business, he notes.

Such a foundation will be able to provide technical support in the design of renewable power generation facilities, the support of potential investors in structuring projects, as well as provide funding, including at the concept design stage, the Electric Power Director of Vygon Consulting, Alexei Zhikharev, expects. State subsidies, fees for negative environmental impact, Russian and foreign investment may be sources of funding, he supposes.

Source: Vedomosti, 07.09.2017