A Comparative Analysis of the European and Russian Support Schemes for Renewable Energy: Return on EU Experience for Russia

Abstract

Russia has a huge potential for the development of renewable energy sources. Given the necessity to modernize the economy and stimulate innovation, the exploitation of this potential is increasingly recognized as a political priority. Replacing traditional fossil energy sources with renewable energy in the Russian fuel mix will also have a positive impact on European energy security and climate policy. The European partners thus have an interest in stimulating this development. Advocating the lessons learned from the European experience in the field of renewable energy policy could be a way to assist Russia in its efforts to develop adequate regulatory mechanisms to stimulate investments in the renewable energy sector. This contribution argues that this attempt can only be successful if the European and Russian partners “speak the same language” in terms of renewable energy policy. It therefore proposes to compare the support mechanisms developed by the Member States of the EU with the Russian scheme in order to highlight potential misunderstandings in the concepts and instruments used. Moreover, this contribution argues that the EU will only be convincing in its approach towards Russia if it avoids a “normative hegemonic” behavior. The EU should focus on the flaws of its experience rather than presenting its rules as “best practice”. The EU experience learns that regulatory instability is the biggest obstacle to a successful renewable energy policy. The readiness of the Russian authorities to integrate investors’ concern of stability in the regulatory framework governing the support scheme will determine Russia’s ability to attract private investments in the development of its huge renewable energy potential.

Keywords: support for renewable energy, electricity, Russia, European Union