Risk assessment in renewable energy projects: A case of Russia

The support of the renewable energy sources (RES) is an important endeavor that might help to reduce the impacts of global warming and prevent the depletion of world's energy resources. However, it calls for the application of special government-funded plans envisaged for its support and stimulation. Political uncertainties and ineffectiveness of the state support often tend to increase the risks associated with the RES projects and, as a result, hinder their successful development. Hence, the assessment of the soundness of the current government-sponsored policies on renewable energy development becomes a very relevant and important task. Our paper presents the results of a theoretical analysis of the main types of state support measures for renewable energy in Russia. Furthermore, it employs an energy specific logit-model that allows to assess the external and internal factors having an impact on default of the Russian RES projects. Moreover, the paper studies the risk dynamics at all stages of the life cycle of RES projects and evaluates the effectiveness of state measures to support the RES sector. In addition, we carry out the assessment of the "real" efficiency of state support mechanisms without "zero-risk" projects. Our results might be used for improving the existing approach to risk assessment in the RES market, as well as for the development of a concept of competition between traditional and renewable energy at the global energy market. (C) 2020 Elsevier Ltd. All rights reserved.