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. Last Updated: 07/27/2016

$3.4Bln to Be Spent in Bulb Switch

VedomostiUpgrading all household bulbs may save 10 billion kilowatt hours per year.

Russia will spend about 100 billion rubles ($3.4 billion) to get rid of incandescent light bulbs by 2014, Economic Development Minister Elvira Nabiullina said Thursday.

The program is one of six key measures outlined in new legislation on energy efficiency that the government will give to the State Duma within a week for a key second reading.

“Wastefulness leads to catastrophic consequences. We are wasting money and each others’ lives when we could be using money for health and education,” presidential aide Arkady Dvorkovich said.

Nabiullina called the program a mixture of carrots and sticks that are designed to make energy saving profitable.

By 2014, the government’s ambitious “New Light” program plans to do away with the “old light” of the incandescent bulb, popularly known as “Lenin’s light bulb,” which was part of Russia’s electrification program in the Soviet period.

The cost of changing all incandescent bulbs in Russia will be about 100 billion rubles, Nabiullina said. Additionally, investment would have to be poured into production of energy-efficient bulbs in Russia. “Plants would be constructed using bank loans rather than funds from the federal budget, but it would be possible to offer subsidized interest rates on these loans,” Dvorkovich said at the conference.

Besides interest rate subsidies, the new energy efficiency legislation outlines financial instruments like accelerated amortization and tax credits for buying efficient equipment. “The measures have been approved in principle by the Finance Ministry, but I’ll believe it when the law is signed by the president,” Dvorkovich said.

Changing all incandescent bulbs in the Russian housing sector would save about 10 billion kilowatt-hours per year, said Igor Bashmakov, director of the Center for Efficient Energy Use. Tariffs vary across Russia, but in Moscow, residents currently pay 3.01 rubles per kilowatt-hour. About 8.7 percent of all energy consumed in Russian homes is in the form of electricity, and only about 30 percent of this is in lighting, according to a study the center conducted for the World Bank in 2008. Almost 70 percent of energy consumption in the residential sector is used for heating.

Energy use is in a “pitiful” state in Russia, Dvorkovich said. While 95 percent of households have electricity meters installed, only 10 percent to 30 percent have meters for gas, heat and water consumption. The government’s goal is to install meters in 85 percent of houses by 2013 and introduce a range of tariffs for end consumers, Dvorkovich said.

The market volume for incandescent light bulbs is 600 million to 700 million units per year, said Alexander Fischmann, the director of business development in Eastern Europe for Osram. The average price of an incandescent bulb is 7 rubles to 10 rubles. Energy-efficient bulbs cost an average of 100 rubles but last six times longer, so their potential market is about 10 billion rubles per year.

While investing into new production is an interesting possibility, “a lot would depend on government policies,” said Fischmann, whose company already makes energy-efficient light bulbs at a plant in Smolensk. “For example, it would be helpful to reduce import tariffs for components of these bulbs, most of which are unavailable in Russia,” Fischmann said.

“Producing incandescent and energy-efficient light bulbs requires completely different technologies,” he said. It’s impossible to re-equip one to produce the other.” Moreover, it’s unlikely that there would be a market for incandescent bulbs in a couple years, since more and more countries are phasing them out, he said.

Russia’s biggest incandescent light bulb producers are located in Tomsk, Ufa, Saransk and Kalashnikovo, a town in the Tver region.