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Consortium signs solar-linked bilateral deal in Russia

Under Russia’s current energy regulatory framework, bilateral deals can be concluded between sellers and buyers, with power distribution companies mediating as third parties.

A consortium consisting of Austrian investor company Core Value Capital, solar developer Green Source Consulting GmbH, and Russian energy project business Vershina Development LLC has secured a voluntary bilateral agreement for a 600 kW PV installation from French gardening retailer Leroy Merlin.

Under the current Russian energy regulatory framework, such bilateral deals can be concluded between sellers and buyers, with power distribution companies mediating as third parties.

“At present … self-consumption projects developed by third parties for commercial and industrial clients are not widely spread in Russia, due to a few reasons,” Stanislav Osadchiy, business development director at Vershina Development, told pv magazine. “First, not many commercial and industrial clients pay high tariffs for electricity. Second, there is a regulatory risk in [the] case of a self-consumption project – if it is structured as a pure PPA – that even in [the] case the plant is on-site, the regulators will enforce to pay [an electricity] transportation charge and, in such case[s], a project becomes become economically not viable.”

The solar array will cover around 30% of the electricity needs of a Leroy Merlin hypermarket in Volzhsky, in Russia’s Volgograd region. Leroy Merlin said it might build similar facilities in other cities in southern Russia. The power supply consortium includes Austrian investment company Core Value Capital GmbH and construction contractor Gildemeier LSG Beteiligungs GmbH.

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At the end of April, three solar-linked bilateral deals had been sealed in Russia. According to Anton Usachev, president of the Russian Solar Energy Association, the three bilateral agreements involved Anglo-Dutch multinational consumer goods company Unilever, Belgian brewing giant AB InBev, and Russian state-owned lender PJSC Sberbank.

“Voluntary bilateral agreements follow the same mechanisms as green certificates and are similar to PPAs in their basic form,” Usachev said at the time. “They are concluded between an independent power producer and a buyer searching for consumption of electricity generated by renewables for its manufacturing facility.”

Prices for renewable electricity are negotiated individually between buyers and sellers and prices lean on wholesale market electricity costs with a market premium. They range between RUB 2 ($0.027) and RUB 2.5 per kilowatt-hour.

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Source: pv magazine