## 5 Empirical Model: A Case Study of Krasnodar Region of Russia  
Our empirical model focuses on the Krasnodar region which is one of the largest regions-consumers of electricity in Russia. At the same time, it is characterized by a high level of energy deficiency. Hence, the development of territorial energy system in the region is given great importance [53; 54]. In 2016, electricity production amounted to about 7 billion kWh with a consumption volume of 22 billion kWh. From 2006 to 2016 electricity consumption in the region increased by more than two times. The increase in consumption in the territorial energy system was mainly due to the growth of electricity consumption by industrial enterprises, the intensive development of the resort and recreation complex and the buildup of electrical loads during the construction of Olympic facilities in Sochi. The shortage of generating capacity of the territorial energy system of the Krasnodar region was covered by the flow of electricity and power through the intersystem power lines from adjacent power systems. In January 2017, the total flow of electricity into the power system of the Krasnodar region amounted to more than 1 billion kWh, including 130 million kWh via interstate lines. In total, the Krasnodar region satisfies its electricity needs by 35% due to preferential energy production at thermal power plants [55]. Krasnodar region is one of the most attractive in Russia for the development of generation based on the use of renewable energy sources in terms of its natural and climatic characteristics. According to existing estimates, by realizing the potential of renewable energy in the Krasnodar region, it is possible to produce up to 1300 MW instead of burning hydrocarbon fuels. The most important types of renewable resources for the Krasnodar region are solar and wind energy, which account for 80% of the energy potential of renewable energy sources in the region [52; 56; 57]. Special attention in the region is paid to the development of distributed solar energy, which should make it possible to reduce capital expenditures on the construction of new sources of traditional energy, as well as on the construction of new kilometers of transmission lines. The potential of solar energy in the region is about 1400 kWh/m\({}^{2}\), which corresponds to the level of countries that actively use solar energy today, such as the United States and Australia [14; 28; 52]. Solar energy is used primarily for the needs of households using electricity generators based on photovoltaic cells and panels [58]. Figures 5 and 6 show the averaged graphs of the daily load of a household on a typical working day and on a day off with a graph of energy generated by solar installations. As can be seen from the graphs presented, the peak of the electricity produced by solar power plants does not correlate with the time of day with the peaks of household electricity consumption, especially on working days. The significant difference between daily power consumption and autonomous power generation of households with solar panels leads to inefficient use of solar generation. Thus, the economic potential of individual solar installations is not fully disclosed, which leads to low efficiency of state programs to subsidize the development of solar energy. Figure 5: Household electrical load graph on a working day with a superimposed graph of electricity generated by solar installations. One of the ways to increase the efficiency of using solar installations is to use energy storage technologies, which make it possible to distribute electricity generated from solar power plants during the day (Figure 7) [38; 59; 60; 61]. As can be seen from the graph, as a result of the use of energy storage, it becomes possible to use electricity generated from solar installations more evenly throughout the day. Consumption during peak hours is reduced by about 30% and household energy consumption at night is reduced by 80%.