The Energy Regulation and Markets Review - Stikeman Elliott

iii
Contracts for sale of energy
Russia
A system of electric power and capacity sale and purchase agreements, including bilateral
ones, and their registration is envisaged in the electric power sphere. The government
approves the rules for concluding and fulfilling public contracts on the wholesale and retail
markets and those for technological connection to the electricity grids, provision of electric
power transmission and operational dispatch management services in the electric power
sector, as well as sample agreements with consumers for sale and purchase of electric power
(electricity supply). Suppliers and purchasers of electric power are entitled to conclude
agreements containing elements of different types of contract (mixed agreements).
Gas is supplied on the basis of agreements between suppliers and consumers in
accordance with the civil legislation and the rules approved by the Russian government
for gas supply and for use of gas in Russia, as well as other legal acts.
The pre-emptive right to conclude gas supply agreements is enjoyed by purchasers
of gas for state and municipal needs, utility, domestic and social needs of the people, and
by buyers with which existing gas supply agreements are prolonged. Sellers and buyers of
gas have the right to its transportation.
Special conditions are envisaged in agreements between gas, electricity and heat
supply organisations.
iv Market developments
Within the framework of the objective restrictions on the electric power market,
opportunities are being sought for specifying its configuration and development.
On the gas market, the focus is increasingly on exchange trade in gas.
V
RENEWABLE ENERGY AND CONSERVATION
i Development of renewable energy
According to Russian legislation, renewable energy resources consist of solar, wind, water
(excluding power produced by hydroelectric power plants), tidal, wave and geothermal
power, low-potential thermal energy of the earth, air, water, biomass, biogas, gas from
production and consumption waste at landfill sites and gas from coal workings. 67 Rules
have been adopted under which a generating facility is classed as using renewable energy
resources. 68 Subsidies are granted out of the federal budget for technological connection
of such facilities up to 25MW to electricity grids. On the wholesale market, a markup
is added to the price of electric power generated by facilities using renewable energy
resources in order to encourage such production. To compensate for losses in the grid, grid
organisations have to acquire electric power primarily from the given generating facilities.
67 Article 3 of the Federal Law on Electric Power.
68 Rules for classing a generating facility functioning on the basis of renewable energy resources,
approved by resolution of the Government of the Russian Federation, dated 3 June 2008, No.
426.
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