Renewable energy in Russia: markets, development and technology transfer

Five potential markets in Russia offer commercial opportunities for renewable energy that are nearly cost-competitive with conventional forms of energy--grid-connected electricity from wind power, electricity for villages and small settlements from hybrid wind-diesel and biomass, district heating for buildings from biomass, hot water for buildings from solar thermal, and electricity and heat from geothermal. Over the last several decades the Soviet Union conducted research and development on several forms of renewable energy. Technological infrastructure, scientific and technical knowledge, engineering and technical skills, and factories and equipment are all well developed assets. But the translation of these assets into commercial renewable energy technologies and markets is a problem because associated market-oriented skills and institutions are still lacking. Many barriers also exist, including lack of information and demonstration experience, lack of long-term commercial financing, a perceived climate of high investment risk, technology acceptance, some direct and indirect energy price subsidies (most energy prices have risen to "market" levels), utility monopolies and the absence of operational regulatory frameworks for independent power producers, and historical enterprise specialization. Market intermediation is very important for renewable-energy investments and technology transfer, providing the knowledge, information, skills, services, financing, and analysis that is necessary to overcome barriers. Joint ventures with foreign multinational corporations represent another important means for overcoming barriers, one that takes advantage of Russian technological capabilities. Four case studies illustrate the most prominent examples of renewable energy technology transfer with Russia, Ukraine, and the Baltic States during the period 1992-1996.