Fachagentur Nachwachsende Rohstoffe e.V. (FNR)
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Factors influencing the bioenergy development

Within BIO-PROM a team of Russian experts has analyzed the factors influencing the bioenergy development in Russia. The following drivers and obstacles have been identified:

Drivers and opportunities for the bioenergy development in Russia are:

  • Rapid growth of energy consumption, especially in remote regions
  • Inefficiency of centralized power supply and gas industry
  • Growing need for autonomous power and heating supply for the remote and rural areas
  • Problems with connecting to the grids
  • Rising energy prices (4-4.5 times in the last decade, up to 50% higher rates than the rate of inflation)
  • Need for large-scale recycling of industrial, municipal and agricultural wastes
  • Need for environmental protection and reduction of harmful environmental effects
  • Options for regional development through:

    • Providing new jobs (also in the rural areas)
    • Intensification of the regional economy
    • High added value in the production of biofuels from renewable raw materials

  • Significant raw material potential for biomass production
  • A sound scientific base practically in all basic areas of the bioenergy development
  • A system of highly qualified personnel training is already established allowing quick development and implementation of new technologies

Obstacles for bioenergy development in Russia are:

  • Historical focus on production and sale of traditional (fossil) energy sources
  • Insufficient industrial base for the development of the bioenergy segment
  • The domestic consumers market for the bioenergy products is undeveloped
  • Poorly developed infrastructure for production and sale of motor biofuels
  • Lacking awareness of manufacturers for the economic feasibility of production of bioproducts capable to provide high added value
  • Skepticism and mistrust towards new technologies on the part of potential consumers (Biogas seems too complex and capital-intensive for Russian customers.)
  • Lack of

    • Specialists and knowledge in Russian enterprises to operate biogas plants
    • Financing mechanisms
    • Business planning and management know-how

  • Weak legislation

    • No tax preferences for the bioenergy sector
    • Lack of state support for innovative business and entrepreneurship, especially of "start-ups"

  • Profitability of biogas plants

    • Small biogas plants of less than 1-1.5 MW are often not profitable due to high unit costs of 6-7 thousand Euro per kW
    • Bigger biogas projects (>4-5 MW) may lack a sufficient raw material supply
    • Cost-effective biogas project are difficult to realize in isolated locations; without grid access to sell all produced electricity at retail tariffs, high and constant level of energy consumption are required

  • Environmental issue

    • Lack of agricultural land to apply all the digestate of large-scale projects

  • Lack of effective communication networks

    • Between research teams and technology, on the one hand, and business, which has need for emerging technologies, on the other hand
    • For professionals and scientific community
    • Lack of integration of Russian scientists into the international bioenergy programs

  • Poorly developed domestic scientific environment
  • High demand for investments and of financing sources