Analysis - Will Russia's wind energy plans be undermined?

RUSSIA: Trade bodies and associations representing local producers and consumers of electric power in Russia have written to prime minister Dmitri Medvedev, urging him to oppose proposals to develop the country's wind power capacity.

The Kremlin... Russia is seeking to increase its wind power generating capacity
The Kremlin... Russia is seeking to increase its wind power generating capacity

These include the consumer group Community of Energy Consumers, which brings together Russia's largest consumers of electricity and the Council of Power Producers, representing thermal energy companies.

The draft document for the support of wind energy in Russia was approved by the Russian government in November 2012. Under the proposals, all wind energy projects will be up for tender.

Those projects will be granted a right to sign a contract on power supply, which provides a guarantee of return, due to higher payments. Preference will be also given to projects with a higher level of localisation of manufacturing.

According to Russia's deputy prime minister, Arkady Dvorkovich, the winner of the tender will receive payments for power during the first 15 years when the project is operational, with a guaranteed return on investment set at 14%.

However, Russia's leading power suppliers and producers have opposed these plans. The volume of state funding for the development of wind energy and other renewables by 2020 may reach about RUB 85 billion ($3 billion), they claim.

According to Mikhail Andronov, deputy head of the Community of Energy Consumers board, the cost of developing wind power and other renewables is too high. He also claimed an inability to accurately predict their capacity would undermine any powerpurchase agreement.

Andronov also argued that traditional power stations would need to stay online in order to support renewable energy, which will increase costs for consumers.

According to the Russian government press service, the letter has been delivered to the prime minister and is expected to be taken into consideration prior to a final decision on state support of wind energy and other renewables, which is scheduled for 25 April.

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