Large fossil fuel subsidies, low tariffs for fossil and nuclear-based energy and Russia's war in Ukraine are among the factors slowing the development of renewables in large parts of eastern Europe and central Asia, as well as Russia itself, according to a study published today.
The report by the UN Economic Commission for Europe (Unece) and environmental organisation Ren21 looks at Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, Serbia, Belarus, Moldova, Ukraine, Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan and Russia.
The countries in focus added more than 20GW of renewable power between 2017 and 2021, to reach a total installed capacity of more than 100GW, the report shows, with Ukraine, Russia and Kazakhstan ranked among the world's top 30 renewable energy investors in 2019. But fossil fuel subsidies continue to hinder the development of renewables in these regions, the study said.
Although the size of energy subsidies as a share of GDP has declined in recent years in all of the countries in focus, these shares were still significant in 2020, particularly in Uzbekistan (6.6pc), Turkmenistan (3.2pc) and Kazakhstan (2.6pc). Fossil fuel subsidies globally decreased to a record low in 2020, because of the Covid-driven decline in demand, but they have gone up since.
The report shows significant progress in the adoption of policies and targets for renewable energy and energy efficiency, with 15 of the countries in the study having established national renewable energy targets and four — Armenia, Kazakhstan, Russia and Ukraine — having set a target for net zero emissions or carbon neutrality. But gaps remain and implementation is slow, while much depends on how "climate neutrality" and "net zero" are defined, the report said. All of the countries in 2020 initiated a process of updating and enhancing their Nationally Determined Contributions (NDCs) under the Paris Agreement.
According to the report, 13 of the countries are highly dependent on energy imports, with four — Armenia, Belarus, Georgia, and Moldova — importing more than 70pc of their total primary energy supply. All the countries in the report depend heavily on fossil fuel sources and rely on a limited number of suppliers.
Effects of war
Russia's invasion of Ukraine is also undermining the investment environment for renewables in these regions. But "at the same time, it has shed new light on the benefits of a rapid energy transition and could bring a surge in renewable installations in the region", the study said. "By June 2022, the conflict had resulted in partial or complete destruction of 5pc of Ukraine's total power generation capacity, while nearly all of the country's wind power capacity (90pc) was out of operation, as was more than 30pc of its solar PV capacity and more than 50pc of its thermal capacity," it added.
Ukraine accounted for 30pc of the regions' total wind power capacity in 2021 and 60pc of its total solar photovoltaic (PV) power capacity. The report estimates that the war has affected at least a quarter of regional wind power capacity and a fifth of solar PV capacity.
