MOSCOW, August 15 (RIA Novosti) — Crimea is prioritizing and incentivizing the development of its lacking energy sector, where domestic production is less than 10%. This severe problem for Crimea is a result of decades of underinvestment.
“As part of Russia, Crimea is facing similar challenges to other Russian regions, which are eager to attract private investment into energy infrastructure construction,” Grigory Birg, an analyst at Investcafe, told Radio VR.
Renewable energy projects are the most widely promoted and incentivized to investors. Some experts say Crimea's technologically feasible annual energy capacity can reach 6.6 million tons of equivalent fuel, or 5.7 billion cubic meters of natural gas. Also, provisional estimates show that Crimea's wind energy generation potential is among the highest in Europe; an area of 2300 square meters sufficient for cost effective operation of wind farms. Finally, the subtropical location of the peninsula gives it great solar energy potential.
Russia will invest $1.5 billion in the development of green energy in Crimea, according to the country's Minister of Energy Alexander Novak. Part of the funds may be provided by investors, one of being the country's largest power-generating company and world's second largest hydroelectric power producer RusHydro, the minister said. The company confirmed the reports.
Additionally, the Black and Azov Seas potentially hold a huge bounty of up to 10 billion barrels of oil and 3.8 trillion cubic feet of natural gas, according to some estimates.
The hydrocarbon potential of the Black Sea is well known, and there are many potential projects that the oil and gas companies could pursue.
However, Russian companies have yet to begin drilling operations in the region, foreign expertise is crucial in the development and production of a potentially trillion dollar resource.