Russian
 company RAO ES East will construct 178 renewable energy facilities with
 a total capacity of 146 MW within the coming five to seven years at the
 country’s Far East and close to the Artic Circle, according to a 
statement of the company’s management. Implementation of the program 
will require about RUB 20 billion ($350 million), but the investments 
will shortly pay itself as the project will save up to RUB 2.06 billion 
($30 million) per year on the supplies of fuel to the remote cities and 
villages in the country. The target plan is to bring the level of 
alternative sources in the total structure of energy supply of the Far 
East to 40 percent.
Projects Will Speed Up
Russian state-owned company RAO ES East is responsible for the power 
supply of the Far East regions with low population density and weak 
network connections. It manages the power systems of hundreds of 
villages surrounded by tundra and taiga only, most of which are isolated
 from the general power supply system of the East. According to official
 information, they get power from 500 diesel power plants with a total 
capacity of 670 MW.
Cost of energy production there can reach up to RUB 100 ($1.5) per 
kWh. Annually, that requires 140,000 tonnes of diesel fuel worth RUB 6.3
 billion ($ 90 million). The cost of imported fuel is RUB 45,000 ($800) 
per tonne, and it is gradually growing together with the tariffs on 
railway transportation. According to the management of RAO ES East, the 
company already made the first moves towards the development of 
renewable energy sources in the region. The current economical crisis in
 Russia will speed up the process.
“In 2012-2015, RAO ES East has commissioned eight solar plants and three wind power
 generation facility,” RAO ES East Deputy Director General Alexei Kaplun
 said. “In general, the implementation of the program will let us to 
save up to RUB 2.06 billion ($30 million). These funds will be used for 
the return on investment in renewable energy facilities, while after 
that become an effective tool constraining the rise of tariffs on 
renewable energy.” 
Kaplun added that the approach to renewables will not only reduce the
 amount spent on fuel purchasing, but also will cut the amount spent on 
subsidies for transportation of fuel to the remote areas.
According to RAO ES East, to ensure payback and attract investors, it
 is necessary to fix the current tariff of diesel generation by 10-15 
years, while in some cases for only seven to 10 years. RAO ES East is 
already in negotiations with a number of Asian and European suppliers of
 equipment for projects. However, so far the company has to discuss the 
issue of tariffs separately with the regulators of each region of the 
Russian Far East.
First Projects Already Implemented
RAO ES East already launched several projects in the area of 
renewable energy. The first solar power station has been launched near 
the Batagai village in the Verkhoyansk area of the Sakha Republic 
(Yakutia). The station, the first stage of which was built this summer, 
has become the most powerful solar plant in the world above the Arctic 
Circle. So far, its capacity reached only 1 MW, but the project involves
 increasing the installed capacity up to 4 MW.
“In general we are planning to build other small sun power plants in 
Yakutia in a bunch-forming way: constructing the same facilities with 
the same capacity, thus reducing the costs of equipment and logistics, 
as well as reducing the time of construction through the effective use 
of technology and human resources,” Kaplun said. “When the plants will 
be running, uniformity and proximity of the projects within the bunch 
will let us save on maintenance and equipment stocks.”
The most active introduction of wind-diesel systems is already 
underway in Kamchatka, where many communities are also isolated from the
 major energy sources.
“Today, on the Kamchatka Peninsula, we have some of the highest 
electricity tariffs in the Far East,” Vladimir Ilyuhin, governor of 
Kamchatka Krai, said. “Firstly [the tariffs are] affected with the high 
cost of diesel fuel, which has to be brought to the region and, of 
course, the cost of delivery itself.”
The total capacity of the wind power plants should amount to 16 MW, 
with the first one already launched on the Bering Island. The plant can 
save up to 50 percent of fuel for power generation of the island. The 
same project will be implemented in eight remote territories of the 
region, according to officials. The details of other projects are still 
developing, RAO ES East said. 
 
 
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