Assessment the Role of Renewable Energy in Socio-Economic Development of Rural and Arctic Regions

The paper overviews Russian and foreign studies on renewable energy. In view of some economic and environmental premises, namely depletion of the traditional energy sources and growing costs of their exploitation, a new alley is being paved in scientific literature and global practices for displacing traditional energy resources and providing for a substantial contribution of renewable sources to total energy consumption. In this context, the aim of this study is to determine what role renewable energy will play in the socio-economic security of territories, to identify the potential and possible applications of renewable energy. The main tasks for the study were to: identify the socio-economic implications of the transition from traditional to renewable energy sources, study the foreign experience of implementing renewable energy policies, estimate the potential and evaluate the prospects for renewable energy with the focus on rural northern regions. The potential for renewable energy market growth in Russia was estimated, specifically for the Northwestern macro-region. To provide for socio-economic security, the energy policy being developed must have an environmental and economic orientation. Primary focus in the development of renewable energy sources should be on peripheral regions, which have no electrical grids of their own and are energy deficient.


Introduction
The rising interest in renewable energy is driven by several factors. The key ones are depletion of the sources of traditional fossil fuels combined with growing costs of their extraction; heavy environmental impact caused by fossil energy production and use, and the associated demand for treatment facilities and actions. Experts have estimated that with current consumption rates, primary energy sources of coal will suffice for no more than 850 years, natural gas for 270 years, oil for 180 years. The quality of the hydrocarbons' reserves will also be constantly declining (Vylegzhanin 2015;World Energy Council 2016).
An example of a negative environmental impact of fossil fuels is CO2 and methane emissions, which notably deteriorate the quality of the environment. An emerging, yet underestimated application for solar energy is agriculture. Solar-powered vegetaria can deliver products 1.5-2 months earlier than unheated greenhouses, depending on the crop. The cost of a vegetarium, on the other hand, is commensurate with a regular greenhouse. Vegetaria can be used by large agricultural producers as well as by small-scale farmers, and in private subsistence farming. Thus, the construction of solar vegetaria would enhance food security in terms of some product categories in some regions of Russia. This is of particular relevance for northern regions in the Russian periphery, away from large logistic nodes.
Novelty of this research focuses on studying the northern and Arctic regions, develop new and refine existing approaches to research and development of mathematical models of energy efficiency of the Arctic zone economy; development of methodological approach to formation of mathematical models and scenarios of energy development and socio-economic development, including economic security based on interaction of macro-and meso-level. The research limitations are that not all data was available to all countries from the sample, as primary data were collected through a variety of studies, each conducted on its own sample of countries.

Theoretical background
Estimating the potential of renewable energy, researchers assume that the average required energy capacity is two kW per person per day. Each square meter of the earth surface can potentially yield ca. 500 W. With the conversion efficiency of 4%, it takes ten square meters per person. Given the average population density, this amount is quite achievable (Cho 2007). Earlier studies have corroborated the statement that renewable sources of energy are essential for mitigating climate change, in particular when implementing the Kyoto Protocol and 'green credits' trading. Renewable sources can be used in the electric energy sector and as environment-friendly vehicle biofuels (Jäger-Waldau 2007;Li et al. 2018), as well as in space exploration (Komerath et al 2011;Pisacane et al 2005).
It was shown that increased utilization of renewable energy will help reduce the price of non-renewable sources, namely natural gas. E.g., each megawatt hour renewable energy may potentially save end users at least UDS 7.5-20 (Wiser 2007). At the same time, the analysis of marginal cost curves has confirmed that in some countries, such as Spain, renewable energy generation is now inefficient, wherefore its prices cannot be competitive in the electricity market (Paz Espinosa et al. 2018;Hernández et al. 2011). The general demand for a more efficient use of resources was postulated by German economists E. von Weizsäcker, A.B. Lovins and L.H. Lovins. Their ideas and approaches underlie the European sustainable development strategy (Weizsäcker et al 1997).
In some countries, the transition to renewable energy is impeded by influential business groups. In Japan, for instance, in spite of energy shortages, the introduction of renewable energy sees some resistance from the haves. While photovoltaic generation better meets their interests than windmills, solar parks are procedurally easier to deploy. Yet, the country's government policy undertakes to stick to the energy efficiency principle (Moe 2012). There are, however, some economic challenges involved in the transition to renewable energy. Thus, the analysis of data for 24 European countries covering the period from 1990 to 2007 showed that coal hinders economic growth, natural gas has no effect, but the use of oil promotes growth. Hence, abandonment of some natural resources may cause economic growth to slow down (Marques et al. 2012 (Yoo 2003) and the environmental effect of the energy industry (Sun et al. 2019;Dhar et al. 2019;Hájek et al. 2019) have been identified. Proceeding from this identified role, the prospects for renewable energy utilization were evaluated (Proskuryakova et al. 2019;Olkkonen et al. 2016) and recommendations were given on its implementation, regarding both strategic planning and guarantee of some rate of return for investors: by improving the legislative framework, introducing grid connection cost recovery schemes and fixed feed-in tariffs (Sadorsky 2012;Lanshina 2018). The transition to renewable energy is particularly promising in decentralized power supply systems, where most of the generation today is by diesel power plants with their high operating costs (Velkin 2015).

Material and Method
The studies on renewable energy development and the projects implemented so far suggest there is extensive potential for the use of all major types of renewable energy in Russia. The key challenge in drawing up a common methodology for the study of this process is the diversity of applicable formats and methods. The assessment of the role of renewable sources of energy in the socio-economic development of regions included: • comparison of traditional and alternative sources, their comparative strengths and weaknesses; • identification of the qualitative and quantitative effects of completed projects in the renewable energy market; • estimation of the actual and potential scope of use of renewable energy sources, including for specific most promising types, considering the resources available. The development potential of renewable energy was estimated both as potential generation capacity and as the share in total consumption. The results obtained in the study have enabled conclusions to be drawn concerning the current and prospective effects of renewable energy on the socio-economic security of territories.
Renewable energy sources reduce environmental charges and increase economic growth. The hypothesis is an increase in the share of renewable energy leads to a reduction in CO2 emissions. The one model was built according to the data of the European Union countries from 1990 to 2018 and otherfor Belarus, Russia and Kazakhstan (World Bank Statistics, Eurostat and Enerdata, see Table 1, Figure 1, Table 2, Figure 2). We take to the data of the European Union countries, because the share of renewable is a rapidly increase in last years.

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ISSN 2345-0282 (online) http://jssidoi.org/jesi/ 2020 Volume 7 Number 4 (June) http://doi.org/10.9770/jesi.2020.7.4(51)    To investigate the relationship between CO2 emissions per capita, fossil fuel energy consumption, renewable electricity and GDP per capita, we apply model proposed Ito (2017) and the long-run model is given by the following equation: Making the log linear form of the both sides of the Equation (1), we obtain the following Equation (2): lnCO2it = β0 + β1 lnFuelConsit + β2lnRWit + β3lnGDPit + εit , where: ln denotes the natural logarithm; β1, β2 and β3 parameters are the long-run elasticities of CO2 emissions per capita to Fossil fuel energy consumption (% of total), share of Renewable electricity (% of total electricity output) and GDP per capita; lnCO2it is a logarithmic meter corresponding to CO2 emissions (metric tons per capita); lnFuelConsit is a logarithmic meter corresponding to the Fossil fuel energy consumption (% of total); lnRWit is a logarithmic meter corresponding to the share of Renewable electricity (% of total electricity output); lnGDPit is a logarithmic meter corresponding to the GDP per capita.

Results and Discussion
According the econometric analysis, the panel unit root tests are provided for all of the parameters of equation (2). Keeping in mind the basic idea behind cointegration, it is necessary to determine the order of integration of each variable before proceeding to using cointegration techniques. The results of the panel unit root tests for all of variables of equation (2), using the Levin, Lin & Chu test, ADF Fisher, and PP Fisher tests, are presented in Table  3.  In Table 5, the findings of the use of the FMOLS and DOLS panel cointegration techniques are presented. According results, for European countries the fossil fuel energy consumption contribute the the CO2 emissions and renewable electricity contributes to reductions in emissions. For Belarus, Russia and Kazakhstan fossil fuel and per capita GDP lead to an increase in the emissions. For European countries, coefficient of FuelCons suggests that a 1% increase in fossil fuel energy consumption will lead to an increase in the CO2 emissions per capita of 1.5% and the coefficient of RW suggests that a 1% increase in share of renewable energy will lead to a decrease in the CO2 emissions per capita of 0.06% for FMOLS estimation (DOLS estimation shows 1.3 and -0.05 respectively), the GDP per capita don't influence on emissions (coefficient is statistically insignificant). According results, for Belarus, Russia and Kazakhstan the coefficient of GDP suggests that a 1% increase in per capita GDP will lead to an increase in the CO2 emissions per capita of 0.12% and the coefficient of FuelCons suggests that a 1% increase in fossil fuel energy consumption will lead to a increase in the CO2 emissions per capita of 6% for FMOLS estimation (DOLS estimation shows 0.14 and 7 respectively), the renewable electricity don't influence on emissions (coefficient is statistically insignificant).
Thus according to the panel data model, the increase in the share of renewable energy in the long run reduces the CO2 emission by the example of European countries. For countries of panel 2, renewable electricity don't influence on emissions due to low share of renewable energy in total electricity output compared to Germany or Portugal.
Our empirical findings are as follows: (i) renewable energy consumption contributes to reductions in emissions for European countries, but we don't find relation for Belarus, Russia and Kazakhstan; (ii) fossil fuel energy consumption lead to increase the CO2 emissions in alll countries in the long run.
Owing to modern techniques, a majority of agricultural enterprises (animal, poultry, breeding farms) can fully satisfy their heat and power demand using their own biogas. In addition, biogas can serve as an alternative fuel for farm machinery.
The biogas production technology should also be applied at large municipal wastewater treatment facilities. The raw material in this case is sewage. Biogas (methane) is a greenhouse gas which, formed under natural conditions, is harmful for the environment, imposing extra burden on the economy (Chang 2017). Since wastewater has to be treated anyway, the use of biogas can help treatment facilities reduce their energy costs and sometimes get extra revenues from selling biogas and its end products out to the market.
Biogas production also proves beneficial in municipal landfills. Methane collection can be organized there. In the process, municipal wastes will be recycled, new energy resources will be generated, greenhouse emissions will be reduced, and environmental improvements will be achieved. Such landfills are quite common in a majority of developed countries, including the USA, China, Japan, the Netherlands, Belgium, and many others. Thus, in the subarctic city of Oulu (Finland), the municipal landfill Oiva Roina has been reconstructed, so that in addition to waste processing it now extracts gas and generates power. Gas is extracted by specialized pumps connected to pipelines running through the body of the landfill. There is a 200 kWh power station in the landfill premises with four power generators operating on methane, 50 kWh installed capacity each. This capacity suffices to cover all energy demands of the company. Excessive gas is sold to nearby enterprises. This recycling technology has proven efficiency and could be applied in Russian municipal waste landfills, considering how pressing the waste recycling problem is today in a majority of large settlements across Russia.
The results are consistent with previous studies. In particular, data from African countries for the period 1980-2014 and 1980-2011 confirmed respectively the existence of a short-run (Adams et al 2019) and a long-run (Adams et al 2019;Inglesi-Lotz et al 2018) relationship between the renewable and non-renewable energy and CO2 emissions. The study also found a unidirectional causality running from renewable energy consumption to CO2 emissions (Inglesi-Lotz et al 2018). The existence of a link between the use of non-renewable energy and

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ISSN 2345-0282 (online) http://jssidoi.org/jesi/ 2020 Volume 7 Number 4 (June) http://doi.org/10. 9770/jesi.2020.7.4(51) CO2 emissions was also confirmed in an earlier study of the Tunisian economy (Cherni et al 2017). At the same time, data from the MENA region (Middle East and North Africa) showed that a transition to renewable energy consumption can only slightly explain changes in CO2 emissions. The reason for this is the weak distribution of renewable energy in the MENA countries (Charfeddine 2019).
Renewable energy development plans should take into account the resources available in a territory. Take the case of Northwest Russian regions. Northwest Russia has good premises for the development of the renewable energy sector, and many regions implement pilot projects, get expert reviews for projects and search for instruments to implement them. An important application for renewable energy sources is the conversion of district boiler houses from coal and heavy oil to biomass, viz. wood wastes, peat, etc. With heavy oil prices in Russia growing constantly, wood residues as feedstock for heat production are gradually becoming competitive. Hence, forest resources in northern regions of Russia (especially Republic of Karelia and Arkhangelsk Region) can be utilized to produce renewable fuels, such as chips and pellets. Boiler houses in all districts of Karelia are getting reequipped to be converted to local fuels. Some boiler houses in the region are already powered by local fuels such as chips and peat. They are situated in Suojarvi, Veshkelitsa, Porosozero, Harlu, Essoila and many other towns and villages.
Finnish experience deserves special attention. A Finnish company has developed an integrated solution for the heating and hot water supply of private houses where a solar power installation is integrated in the utility system. The main element of this system is a heat accumulator combined with a solar collector. Where needed, the system can be supplemented with a diesel or gas boiler so that the heat and hot water supply of the house is provided by the integrated solar energy-diesel/gas system. In this system, the water heated in solar collectors is supplied to the heat accumulator and then distributed among consumers, with additional heating by a diesel or gas boiler if necessary. The boiler ensures that even when solar energy is in deficit, e.g. in wintertime, the consumer gets adequate heating and hot water supply.
As regards municipalities, the development of their economies is directly dependent on distance to the region's capital city, the only exception being centers of innovation. In Karelia, the latter are represented by the borderland towns of Kostomuksha and Sortavala.
Since the beginning of reforms, Karelian economy has seen a substantial decline, most importantly in industry and agriculture. Employment levels in a majority of municipalities dropped 4-6-fold, and it is only in Kostomukshsky and Sortavalsky Districts that the socio-economic situation is slightly better, owing to the presence of customs and transport infrastructure, active foreign economic contacts, and AO Karelsky Okatysh. The latter, situated in Kostomuksha, accounts for roughly one fifth of the Karelian economy, while a majority of rural municipalities remote from Petrozavodsk contribute no more that 1%. At the same time, the population loss was smaller than the production decline, wherefore the share of unemployed has increased markedly in the periphery.
Reforms have induced economic renovation of Karelia, but little of it has happened in rural areas. The peripheral position and poor infrastructure of rural areas make their industrial revival unlikely. Regional authorities, struggling to save budgetary funds, shut down pieces of infrastructure, leaving the population deprived not only of social facilities, but even of energy supply. One possible solution is to engage renewable energy sources, particularly in agricultural cooperation arrangements.

Conclusions
Green economy and renewable energy have lately been studied as a full-fledged research area both globally and in Russia. In particular, there is an ongoing search for engineering and process solutions for utilizing solar energy and promoting bioenergy; potential applications for green economy techniques are being investigated (Statista 2018). The task to promote alternative energy has been formulated within the UN Sustainable Development Concept, Renewable Energy Development Strategy 2020, a number of other international regulatory documents. All the countries leading in renewable energy utilization have for a long time been offering targeted support to the developments. The incentives for renewable energy development fall into three main groups: price-, cost-, and quantity-based. Price-based instruments include fixed prices per unit energy or price markup set in law, capacity charges (feed-in tariffs, net metering). These support measures were first introduced in the USA in the 1970's, but became widespread only in the 1990's. At the moment, price-based instruments are the most popular, applied in more than 50 countries. Cost-based instruments include various subsidies, tax abatements, partial reimbursement of investments in renewable energy developments. Quantity-based instruments include renewable energy quotas or green credits, as well as assistance in tendering. As a rule, quantity-based instruments are applied to more mature technologies for renewable energy use.
Furthermore, renewable sources of energy have a substantial environmental-economic potential and contribute to the country's innovative development. Finnish experience, for instance, proves that installations utilizing renewable energy can operate even in the north. To activate the use of renewable energy in Russia, foreign experience needs to be adapted and a systemic approach should be employed in implementing the energy saving and energy efficiency policies. The possible incentives for renewable energy development, given the existing potential and scientific developments, can take the form of support measures of all the three major types: price-, cost-, and quantity-based. However, since the threats for the energy security and, hence, the socio-economic security are higher in northern peripheral regions, they should be treated preferentially within the incentive mechanisms.