Energy Supply to Isolated Areas: Attracting Investment and Developing Regional Economy
The study analyses energy supply to isolated areas considering the development of priority areas of the regional economy and assessing the dependence between consumer finances and electricity costs. We examined energy supply problems in the example of the Tuva Republic, the Russian region with v...
Main Authors: | , , , |
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Format: | Article |
Language: | English |
Published: |
Russian Academy of Sciences, Institute of Economics of the Ural Branch
2020-09-01
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Series: | Экономика региона |
Subjects: | |
Online Access: | https://www.economyofregion.com/data/jarticles/3306.pdf |
Summary: | The study analyses energy supply to isolated areas considering the development of priority areas of the regional economy
and assessing the dependence between consumer finances and electricity costs. We examined energy supply problems in the
example of the Tuva Republic, the Russian region with vast isolated areas and high prices for energy. We explained the reasons
for the increase in electricity costs, including small-scale generation sources based on fossil fuels. The limitations of economically
substantiated energy transmission at light loads prevent the connection to a centralised energy supply systems in isolated
territories, leading to a decentralised energy supply. Thus, we proposed a methodological toolkit for solving the problem of
economic substantiation of the dependence between consumer finances and electricity costs, testing it on the example of the
gold mining industry. Our hypothesis relies on technological development opportunities in the field of renewable energy sources
to reduce the construction and operation costs of generation facilities. Since the economic feasibility of using renewable energy
sources for investors is determined by the dependence of consumer finances on energy generation costs, it is necessary to create
energy resource structures depending on different basic conditions. For that purpose, we showed the linear dependence of the
profitability of gold mining investment projects on electricity costs. The proposed criteria and methods allow determining the
threshold values of the economic efficienc y o f energ y service s provide d b y supplier s an d energ y produce d b y self-generating
facilities. Based on these results, further research can focus on analysing the impact of electricity costs on the financial parameters
of projects to apply innovative energy supply schemes and identifying thresholds of the response of profitability to energy costs
reduction for different energy consumption projects. |
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ISSN: | 2072-6414 2411-1406 |