Murmansk region to boost reliance on renewable energy to 7.4 percent

Publish date: February 2, 2009

Written by: Anna Kireeva

MURMANSK – Swift on the heels of an announcement that Moscow would slightly increase its nation-wide reliance on renewable energy, the Murmansk Region has announced that it will boost the energy it uses from renewable sources to 7.4 percent.

Russian Prime Minister Vladimir Putin announced last week that Russia would, by 2020, incorporate alternative energies into its 4.5 percent of its energy mix, mostly in the hydroelectric sector. Russia currently relies on alternative and renewable energy for about 1 percent of its energy consumption, the vast majority of its energy coming from coal fired plants, followed by nuclear energy, accounting for roughly 15 percent of the country’s energy.

The announcement of Murmansk’s slightly larger ambitions came after a meeting of the region’s alternative and renewable energy working group, which was formed within the regional administration’s Ministry for Natural Resources and Ecology in 2006. This clean energy working group consists of local government, industry and ecological group representatives, including Bellona Murmansk.

Developing renewable energy as a regional initiative
The renewable boosting programme’s aim is to create conditions for the consistent implementation of such energy sources in the Murmansk Region, with a focus on wind and hydroelectric power supplied by the regions small rivers. The programme also intends to guarantee the region’s energy supply. One of the expected results of the new approach is to reduce the area’s harmful emissions by limiting the use of fossil fuel plants in the Northwest region.

“Stabilising the climate requires global emissions cuts of 50 to 80 percent by 2050. This can only be achieved by improving energy efficiency, reducing demand and using renewable energy,’ said Nina Lesikhina, energy projects coordinator for Bellona Murmansk.

The Murmansk programme envisions the construction of wind parks along the Murmansk-Tumany-Teriberka road and near Liinakhamari, a rural locality in Pechenga District of the Murmansk region, as well as and building a combined diesel and wind power station in the closed administrative district of Ostrovoi. It also foresees building wind installations near the villages of Chavange and Chapome. Blueprints are already drawn up for wind power installations to provide heat to Kandalashki and the greenhouses of the Polar-Alpine Botanical Garden Institute run by the Karlelia branch of the Russian Academy of Science. Finally, the programme is to encompass the construction of two mino-hydroelectric plants in the Elreka and Lovozersk districts.  

The collective power output predicted for the programme is 386.15 megawatts by 2015.

The contractor list for the project includes Windlife Arctic Power, Russian Wind, the government of the Murmansk Region, the Ostrovoi administration, the Kola Peninsula energy company Kolenergosbyt, the Kola branch of the Russian Academy of Science, and the administration of the Lovozersk district.

Financing the project
The bulk of the programme financing will come from the private funds of interested companies and organisations and is expected to cost some 19.6 billion roubles ($500 million). Some 400 million roubles ($16.7 million) is expected to flow from the regional budget over a course of the six year course of the programme. However, representatives of the regional natural resources ministry warned that figures may change and as programme progresses.

On the question of what direction regional budget funding would take, Fyodor Shveitser, the Murmansk Region’s Natural Resources Minister, said that, “Budget money in the framework of the programme must in the first place be used for the socio-economic development of the region, for instance on the energy supply in terms of renewable energy sources for outlying and isolated villages of the Murmansk region.”

“Of course, all participants in the programme will want cooperation from the government in deciding questions of land use, accord of documentation and other preferences,” he said.

The Murmansk Region is not covered by a centralized electrical supply in some 80 to 100 populated areas, and regions like Krasnoshchele, Chavanga and Chapoma genrate electricity with diesel generators. Because of significant distances and poor transport routes, the cost of delivering fuel in the areas has risen by 30 to 70 percent in coastal areas and by 150 to 200 percent in inland regions.  In such circumstances, installing wind installations and small hydroelectric stations would save on high cost diesel powered generators and lead to a stable energy supply.

The funding for companies planning to build the larger wind parks have been largely borrowed from banks, and funding of smaller projects such as hydroelectric plants and smaller wind installations is still unclear. This is largely attributable to the fact that the contractors are municipal and state organisations.

Who needs green energy?
Representatives of the Regional Energy System Dispatchers administration, called Kola RDU, have said that much of the energy system of the region is redundant and that this tendency will only increase amid the deepening financial crisis, which is leading to lower energy demand.

“Renewable energy sources could and must be the wonderful solution to energy supply in isolated villages, and more large scale projects could collide with the sale of electricity,” said a Kola RDU representative. “Large scale projects for the use of renewable energy are usually realised by large customers to cover their own needs. For example, there is a notion to use wind energy for developing the Shtokman (oil and gas condensate) field.”

The Kola Peninsula’s wind resources are estimated to be 360 billion kilowatt hours. The highest wind speeds (of some seven to nine meters an hour) have been observed along the coast of the Barents Sea. The most suitable regions for wind parks are in the ares of the villages of Zelentsy and Teriberka, along  the Serebryansky and Teriberka hydroelectric plants.

In 2007, the State natural gas monopoly Gazprom decided to build plant to condense gas from the Shtokman field in Teriberka. In October of 2008, the Murmansk regional government approved a declaration of intent to build wind parks with an output of 200 megawatts near Teriberka.  However, wind energy is not included within the possible scenarios for powering the plant.  It is assumed that gas or energy from the Kola Nuclear Power Plant will be the driving energy force behind the development of Shtokman field.

Bellona’s suggestions
Among those suggestions made by the working group was the necessity to include the programme in a division dedicated to evaluating the socio-economic and environmental impacts of implementing the programme, as well as evaluating the budget expenditures.

Bellona suggested the programme include bio-energy sources, which are founded on the use of food and animal waste.

“The Murmansk region has a large quantity of agricultural enterprises, which are themselves struggling with rising power prices, but there is a free source of energy lying literally under their feet in the form of animal waste,” Bellona Murmansk’s Lesikhina said. “We have expansive experience in the production of bio-gas from animal manure at the Kovdorsky agricultural complex, and it will soon be necessary introduce this experience universally in Tuloma, and of course this will have to do without government funding.”

Bellona also told the working group about the necessity of preparing and analysis of the possibilities of using grants, loans and tax credits from international financial structures, mechanisms provided by the Kyoto Protocol for the financing or co-financing of programme projects, which is especially relevant to projects to be implemented by municipal or state structures.

“It is important that the current programme be realised by the mechanism for developing renewable energy in the Murmansk Region, and that it must clearly reflect the dividends that participants in the programme will receive, as well as being sufficiently versatile for the inclusion of new projects, said Michele Hege Groenbech, one of Bellona’s Russian energy experts.

Bellona further suggested to the working group that it flesh out the list of possible economic stimulus mechanisms for programme projects from the side of regional authorities, which will promote shortening the period in which it will pay for itself and correspondingly lower prices for green energy .

Members of the working group approved the programme, and approved it for review, notations and additions.