a b s t r a c tRussian renewable energy policy has undergone changes following an establishment of targets for installed capacity and power production using renewable energy sources and the introduction of new capacity based support scheme for renewable energy. The forecasted amount of future renewable power will not provide enough power production to meet growing demand for renewable energy; although, it will help with modernization of the energy sector and development of renewable technology and innovation. At the same time, the capacity support scheme for renewable energy may adversely affect capacity prices and become an additional burden for industrial consumers, who are already paying the cost of capacity support for conventional power plants, so-called Capacity Delivery Agreements (CDAs). This work assesses the impact of the new capacity based support scheme on capacity and electricity price formation. Modeling results show that the impact of capacity support for renewable energy is small compared to that of capacity support for conventional energy, suggesting that the Russian energy production mix will continue to be dominated by fossil fuel based generation.

This paper examines the economic effects of the opening of the Russian Federation. The analysis carried out in the paper is twofold. First we simulate the impact of the eastern enlargement of the EU and, second, we analyse how deeper integration between the EU and Russia contributes to this. The analysis is carried out with GTAP, a computable general equilibrium model. We find that there is a trade-off between the two roads of European integration arrangements. Eastern enlargement seems, even in its very deep form, be beneficial for all EU regions without causing substantial welfare losses outside the Union. EU-Russia integration, on the other hand, has different impact. To be beneficial for Russia free trade between the EU and Russia requires improved productivity in the latter, which may be due to better institutions or increased FDI. This might make the negotiations of the agreement cumbersome and if agreed its implementation difficult. w This study stems from a project ''Opening of Russia'' in which the authors participated at RECEP in Moscow. This paper is substantially revised and updated version of Sulamaa, P. and Widgre´n, M. (2003): EU Enlargement and Beyond: A Simulation Study on EU and CIS Integration, CEPR Discussion Papers 3768. The authors thank Peter Havlik and Risto Vaittinen and an anonymous referee for beneficial comments on earlier drafts, Comments and discussions with Paavo Suni, Ivan Samson, Xavier Richet and Xavier Greffe are also gratefully acknowledged. The usual disclaimer applies.