Evaluation of the use of renewable energy sources and peat in rural municipal economy

Abstract

This paper analyzes the cost-effectiveness of the use of renewable energy sources (RES) and peat in production of electric and heat energy in rural places of the country by comparing tariffs (prices) of energy versus total expenditures on generation of electric and heat energy when using RES and peat. The appraisal of a cost-effective scale in application of energy plants working on RES and peat in the rural side in Russia is made by using a model-information set developed at the Energy Institute of the National Research University (Higher School of Economics). It is shown that with the current tariffs, the production by use of RES and peat may become economically effective, which means to achieve 1.8 billion kW/h of electric and 250 million GJ of heat energy per year, and, in the long run, 30 billion kW of electric and up to 400 million GJ per year. In comparison of total expenditures on production of electric and heat energy in rural areas (which are considerably above the established tariffs), it becomes cost effective to produce the electric energy of up to 12 billion kW in the nearest years and up to 80 billion kW in the long run. The need for the governmental policy motivating the projects based on use of RES and peat and the lines of this policy for the rural areas of the country are outlined.