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The Role of State in Managing the Wind Energy Projects: Risk Assessment and Justification of the Economic Efficiency

Author

Listed:
  • Galina Chebotareva

    (Department of Energy and Industrial Management Systems, Ural Federal University, Mira Str. 19, 620002 Yekaterinburg, Russia)

  • Inna Čábelková

    (Department of Trade and Finance, Faculty of Economics and Management, Czech University of Life Sciences Prague, Kamýcká 129, 165 00 Prague, Czech Republic)

  • Wadim Strielkowski

    (Department of Trade and Finance, Faculty of Economics and Management, Czech University of Life Sciences Prague, Kamýcká 129, 165 00 Prague, Czech Republic)

  • Luboš Smutka

    (Department of Trade and Finance, Faculty of Economics and Management, Czech University of Life Sciences Prague, Kamýcká 129, 165 00 Prague, Czech Republic)

  • Anna Zielińska-Chmielewska

    (Institute of Economics, Poznań University of Economics and Business, Al. Niepodległości 10, 61-875 Poznań, Poland)

  • Stanislaw Bielski

    (Faculty of Agriculture and Forestry, University of Warmia and Mazury in Olsztyn, M. Oczapowskiego 8, 10-719 Olsztyn, Poland)

Abstract

Our paper focuses on assessing the role of state funding in supporting wind energy projects with a focus on economic efficiency and risk assessment. In particular, we analyze the new program aimed at supporting Russian renewable energy (RE) projects envisaged for the period from 2024–2035 that involves a reduction in investments in such projects and the introduction of large fines for non-compliance with regulatory requirements for localization and export. These strict rules imposed by the regulatory authorities, as well as the withdrawal by foreign manufacturers of equipment for renewable energy from the domestic energy market, put into doubt the economic feasibility of the participation of sector players in state-supported programs. Our paper assesses the economic justification for the practicality of the Russian energy market to implement renewable energy projects under the influence of negative environmental factors and the reduction of state support programs. We employ a case study of wind energy projects carried out in 2018–2020 as a part of the first sector support program. Our methodology is based on the calculations of the classical indicators of economic efficiency of projects (NPV, IRR, and DPP). Our own approach reveals that these indicators are supplemented by taking into account the cost of specific political, environmental, and economic risks of wind energy projects. Our results reveal that, at the moment, Russian wind energy projects in various scenarios retain a sufficient margin of financial strength and are able to withstand a reduction in the amount of financial support from the state. Our findings allow the formulation of some practical recommendations for reducing the share of governmental support for wind energy projects on the local energy market as a measure of cutting costs and increasing overall economic efficiency.

Suggested Citation

  • Galina Chebotareva & Inna Čábelková & Wadim Strielkowski & Luboš Smutka & Anna Zielińska-Chmielewska & Stanislaw Bielski, 2023. "The Role of State in Managing the Wind Energy Projects: Risk Assessment and Justification of the Economic Efficiency," Energies, MDPI, vol. 16(12), pages 1-26, June.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:12:p:4807-:d:1174751
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    References listed on IDEAS

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    Cited by:

    1. Gordon Rausser & Galina Chebotareva & Wadim Strielkowski & Lubos Smutka, 2023. "Would Russian solar energy projects be feasible independent of state subsidies?," Papers 2312.07240, arXiv.org.

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