Germany Offers Blueprint for Energy Use
Published: February 12, 2014 (Issue # 1797)
As Russia seeks new ways of stimulating economic growth, the Economic Development Ministry under Alexei Ulyukayev in late January issued a plan to foster competition in the non-natural resource sectors, support investment by Russian companies and promote the development of human capital. Meanwhile, Prime Minister Dmitry Medvedev promised more than 21 billion rubles ($597 million) to help small and medium enterprises, plus tax breaks and a Federal Guarantee Fund that facilitates credit financing for businesses.
Medvedev’s stimulus package focuses on businesses in manufacturing, services and research. However, economic development could also be promoted by initiatives that establish a decentralized energy supply.
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The Russian prime minister’s strategy could benefit from looking to Germany’s ‘Energiewende,’ an energy policy used as an economic stimulus, as a framework for jumpstarting Russia’s stagnant economy. The central European nation’s approach includes phasing out nuclear energy, decarbonizing the energy supply and promoting decentralized, renewable energy. These decentralized energy provisions contributed 10.7 billion euros to the German economy in 2011, according to estimates from the Institute for Ecological Economy Research. The installation, operation and maintenance of these energy facilities have been seen to be important drivers of local employment.
In Germany, these communal energy services are organized as co-operatives. Between 2001 and 2012, their number increased from 66 to 656, spread throughout the country. The German Renewable Energies Agency estimates that these energy co-operatives have invested around 1.2 billion euros in so-called “citizens’ power plants,” including solar power, wind, and biomass.
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By all accounts, Russia’s power supply structure needs a fundamental overhaul. Until 2030, the total capital investment required in generation capacity and grid infrastructure could well exceed 500 billion euros, according to official estimates in “Russia’s Energy Strategy to 2030,” which was approved by the government of the Russian Federation in 2009. Initiatives like promoting energy co-operatives could also help stabilize Russia’s ailing transmission and distribution network, because they are the first step to creating largely autonomous island systems that need less energy from outside their boundaries.
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