DMITRY VASILIEV: FAS DRAFTED AN ORDER ON LONG-TERM TARIFFS IN THE PART OF DISTRIBUTED GENERATION THAT WILL BE USED IN ISOLATED TERRITORIES

Long-term tariffs will be fixed for several years ahead, which will enhance investment attractiveness

On 5 October 2018, Head of FAS Department for Regulating the Electric Power Industry, Dmitry Vasiliev, was a speaker at the session on “Using Renewable Energy Sources in Russia: from the wholesale market to power supplies to isolated territories” at the Russian Energy Week.

He outlined efforts of the antimonopoly body in the segment of renewable energy sources.

“The Antimonopoly Service has drafted an order on long-term tariffs in the part of distributed generation that will be used on isolated territories. The draft order specifies the mechanisms for changing tariff-setting: tariff shall be long-term, which increases investors’ confidence in the future”, pointed out Dmitry Vasiliev.

He added that regarding renewable energy sources in general, тthe sector is not sufficiently competitive on the wholesale market of electric power (capacity) in comparison with traditional generation, but renewable energy sources can be more confidently used in other segments, for instance, on isolated territories.

“Another area is alternative grid construction. There are examples when construction of electric power networks to a remote consumer can be significantly more expensive than building up a set of generating facilities, including renewable energy sources. Perhaps, in the mid- or long-term prospects it will be better than large investments in technological connections of consumers to the networks”, said Dmitry Vasiliev.

He stated: “FAS emphasizes several important areas where generation with use of renewable energy sources should develop. First, competition. We see that with time renewable energy sources facilities become more competitive in comparison with traditional generation. Second, economic feasibility of tariff models stimulating to electric power generation rather than capacity of renewable energy sources facilities. Third, observing the balance of interests between consumers and producers, enabling harmonious and sustainable development of the electric power industry as a sector of the economy”.

Finally, Dmitry Vasiliev pointed out that market participants and the authorities together should elaborate in detail all aspects of developing renewable energy sources, paying attention to the most competitive elements of generating renewable energy sources.