I-RECs for renewable electricity tracking in Russia

Earlier this year, the International Renewable Energy Certificate (I-REC) Standard announced the beginning of I-REC issuance in Russia. This long-awaited development is a huge step forwards for energy consumers looking for opportunities to contribute to the energy transition in the country. Serving as a tool to prove the use of 100% renewable energy, I-RECs make it possible for companies to display their commitment to renewables in over 30 countries. The issuance of I-RECs in Russia will enable renewable energy trade and consumption according to internationally recognised standards and reporting initiatives. Non-profit organisation Goal Number Seven will be the local issuer of I-RECs in Russia.

Renewable energy in Russia 

Renewables in Russia develop slowly. The official goal of the Energy Strategy is to reach only 4% of renewable energy in the national energy mix by 2035, excluding large hydropower plants.

Source: IEA 2019

But as the cost of renewable energy decreases around the world, the use of renewables becomes more economically feasible in Russia too. Several studies, such as a study by LUT University and the Energy Watch Group, have indicated the huge potential for renewable energy in Russia.  Public awareness of climate change in Russia has grown in recent times too. As a result, companies seek to provide consumers with goods produced in a sustainable way, including the use of renewable energy.

Russian companies are also ready to join the RE100 and switch to using renewables. The introduction of reliable tracking certificates that meet international standards can play a big role in stimulating the demand for renewables by making renewable energy procurement easier.

Evolution in the right direction, but more needs to be done 

In recent years, the national authorities have also shown a growing interest in renewable energy, mainly in an attempt to diversify Russia’s energy capacity. To increase the share of renewable energy, the Russian government introduced a renewable energy tendering scheme called the Capacity Supply Agreement (CSA). This scheme is a competitive support mechanism designed to allocate financial support for renewable energy projects (except large hydropower) based on their costs. The most efficient projects get financial support and sell electricity through a special tariff which covers installation costs over the next 15 years and provides an overall income of 12%.

During the past 6 years, this policy has resulted in the implementation of projects with a total capacity of 880 MW (excluding large hydropower). However, the numbers are still very small compared to what is happening in other countries and what is needed to avoid catastrophic climate change. Here then, it is important that consumers start playing a more active role in the energy transition. Fortunately, this has already started to happen and the introduction of I-RECs has the potential to speed up the process even more.

The existing demand for renewable energy consumption in Russia is also seen to be increasing, as shown by the recent renewable energy PPA between Fortum and Unilever, as well as another PPA made by Enel, Fortum and AB InBev. However, PPAs may not be the ideal solution and may not even be available for all consumers, whilst buying I-RECs from the market is. Serving as a simpler tool for achieving renewable energy goals, tracking certificates make energy-related communication possible for all, creating more drivers for renewable energy development in the country in general.

The current situation of energy tracking in Russia 

The idea of setting up a certificate system for renewable energy in Russia is not new. The “Market Council”, which is a non-commercial partnership of companies active in the Russian energy market, even runs a national “green certificate” system. This system, despite aiming to assure the origin of renewable electricity use, is for administrative purposes in its current form and cannot be used by consumers. However, for many years, there has been ongoing evaluations to assess the option of introducing a more market-oriented green certificate system. In 2016, representatives from the Market Council also visited the EKOenergy Secretariat to learn more about tracking in the EU, our work towards market development in countries where a tracking instrument doesn’t exist and how our ecolabel works.

In 2019, the Market Council organised a tender to develop prototype software for the issuance and redemption of green certificates. This software was planned to be in use from 2024 onwards and would allow private companies to choose the source of electricity they use. However, with the winner of the tender announced, it is still unclear how the system will work in practice or whether it will be developed.

I-RECs become available immediately 

With an agreement between the I-REC Board and the Russian NGO Goal Number Seven in place, a tracking system that conforms to the Greenhouse Gas Protocol Scope 2 Guidance is now available through I-REC certificates in Russia.

Such a development has the potential to build a stable demand for renewable energy in the country. Once a framework enabling renewable energy purchases exists, claims and communication become much more straightforward. The availability of I-RECs also enables the offtakers to retain the environmental attributes of PPAs and claim the renewable energy as 100% theirs. 

Finally, I-RECs provide an opportunity to choose sustainably-generated and EKOenergy-labelled renewable energy in Russia. In addition to sustainability, proper tracking and the avoidance of double counting are also among the EKOenergy ecolabel’s criteria. Using I-RECs fulfils two of these conditions and makes it possible for companies in Russia to choose EKOenergy-labelled, environmentally friendly energy from Russian renewable energy installations. By using EKOenergy, energy consumers contribute to the global transition to renewables and inspire others with their commitment to sustainability. To see the additional benefits of using EKOenergy-labelled electricity, see our why buy EKOenergy page (also available in Russian).

Our Leaflet “Что такое сертификаты I-REC, и как приобрести “зеленое” электричество?”  also offers a brief explanation of what tracking certificates are and how they make it possible to buy EKOenergy-labelled renewable electricity (in Russian).

Picture: Fortum, Sunset in Ulyanovsk
Posted on 6 April 2020