The Murmansk regional budget includes over two billion rubles annually to reimburse thermal power stations for the gap between heat-generating costs and utility rates for the public. A project to diversify the region's fuel and energy balance that aims to replace boiler oil with other types of fuel will help eliminate this, Murmansk Region Governor Marina Kovtun told TASS news agency during the Russian Investment Forum Sochi 2017.

"A comprehensive investment project to upgrade the power grid to 2030 will allow the Murmansk Region to convert to other fuel types and stop subsidizing utility costs, if boiler equipment is upgraded and new ones are built," she said.

The regional heating season lasts nine months, with boiler oil accounting for 84 percent of overall fuel consumption. The region is forced to subsidize the gap between public utility rates and energy production costs. "This adds up to over two billion rubles annually, and we could better use this money to improve the quality of life and make things convenient for people," Kovtun noted.

It is possible to use peat, a local fuel, she added. This project is currently being drafted for southern areas of the Kola Peninsula; an investor has already been selected, and a request to develop a peat deposit has been submitted, she told TASS.

Electricity is another alternative.

"With due consideration for system restrictions, we have over 300 megawatts of surplus power, and we insist that electricity could be used to generate heat," the Governor noted. She added that the federal government should decide how to charge for surplus electricity because the current pricing makes heat generation too expensive. The Murmansk Region has submitted this proposal to the authors of the law on the Arctic zone.

The Russian Investment Forum Sochi 2017 took place on February 27-28.