Investments in renewable energy

7 Affordable and clean energy

Target 7.2.

By 2030, increase substantially the share of renewable energy in the global energy mix

For more than 10 years we have been developing state-of-the-art generation technology based on renewable energy sources (RES). Our projects promote reduced consumption of non-renewable types of fuel, thereby decreasing the level of greenhouse gas emissions. We analyze previously gained experience and widen its application in countries that support such projects at a national level.

The LUKOIL Group’s RES goals are:

  • business diversification through implementing projects using the state support system for renewable energy in Russia (a mechanism for concludingIn 2013 the Russian Federation introduced a support mechanism for RES projects through the conclusion of capacity supply agreements (CSA RES), which offer a special rate for capacity, provided that obligations on the construction of the facilities are met. Requirements related to the localisation level of RES project equipment were approved: solar parks – 70%, wind farms – 65%, small hydro power plants – 65%. capacity supply agreements with a guaranteed return on investment)
  • preventing greenhouse gas emissions from power generation facilities
  • keeping up with global RES trends

In line with its RES policy, LUKOIL commissioned a 10-MW photovoltaic power station (“solar park”) in January 2018 at the oil refinery in Volgograd, which resulted in a doubling of the installed capacity of the Company’s solar power facilities.

The Industry Program for Developing the Power Engineering Business Sector for 2018-2027 includes proposals on the construction of new solar parks on unused sites at oil refineries in Saratov and Volgograd. Wind farm construction projects may also be considered in the future. The appearance of localized facilities for the production of major equipment in Russia will enable us to play a more active role in RES projects.

In 2017, in terms of the development of hydroelectric power, measures have been taken to repair and upgrade equipment, optimize operating practices, and improve the reliability of LUKOIL-Ekoenergo power facilities. One of the most important projects in this regard is the refurbishment of the Belorechensk Hydroelectric Station. The complete replacement of hydroelectric units No. 1 and No. 3, with a rise in installed capacity from 16- to 24-MW each, will make it possible to extend the service life of the hydroelectric station by at least 40 years and to improve the cost-efficiency and reliability indicators of electricity generation.

To develop alternative energy sources in Russia, and to ensure that the industry can benefit from human resources with the required level of qualifications, LUKOIL assisted in setting up a specialized renewable energy sources department at Gubkin Russian State Oil & Gas University.

Total volume and share of electricity generated from renewable sources, million kWh
2015 2016 2017
Total electricity generated from RES, including: 651.7 977.1 1,053.2
Wind power 0 200.8 228.5
Solar power 12.7 11.5 12.0
Hydroelectric power 639.0 764.8 812.8
Total electricity generation by LUKOIL Group commercial power generation facilities (regardless of supply power generation) 17,775.6 18,315.2 17,551.9
Share of electricity generated from RES in total electricity generated (regardless of supply power generation) 3.7 5.3 6.0

Note. Data on electricity generated through wind power in 2015 were not considered, as the wind farm was part of the LUKERG Renew JV.

In 2017 we changed our approach to calculating the share of electricity generated from the RES indicator. The total amount of electricity generated by all commercial generating facilities of LUKOIL Group, net of supply power generation, serves as the basis for the calculation of the indicator.