Manufacturers petition Russian government over wind rules

RUSSIA: The wind industry has called on the Russian government to change existing subsidy rules for wind energy generation, as GE and others prepare to manufacture in the country.

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Wind manufacturers looking to operate in the Russian market together with local developers and generating companies have called on the government to change the existing rules, which were approved by the Russian government in the middle of 2013.

Among the manufacturers that submitted the petition to the national government are GE, Siemens and Vestas. Domestic companies included Inter RAO engineering, RusHydro, Evrosibenergo, VetroOGK, Atomenergomash and HC Composite.

The petition pointed to a need to keep the planned power output in the volume of 3.6GW by 2017, in order to provide a return on the invested capital of 12-14%.

The companies have also asked the Russian government to soften the requirements for localisation of equipment.

Despite its strict local content rules, Russia's wind industry output remains insignificant, and in terms of blade manufacture completely absent. One of the reasons for this is that it takes up to three years for Russian-built blades to gain certification.

However, the proposal to soften local sourcing requirements sparked criticism from some Russian companies, particularly Galen and Russky Veter, which have plans to produce turbines in cooperation with AMSC.

The petitioning companies also called for an increase of the maximum size of capital costs, which is currently set at the level of RUB 66 million ($2 million) per MW. This takes into account changes in foreign exchange rates.

Finally, the companies have asked to keep the level of profitability of the projects at 14%, and to qualify the projects at the design stage, instead of commissioning, which will help avoid the risks of fines.

According to an official representative of GE Russia, the company is looking to manufacture wind turbines in Russia in the near future. Production will be launched by the end of the current year and the first products will be supplied to customers by 2016-2017.

Representatives of Siemens declined to comment. In 2010 the company announced its plans to start production of wind turbines in Russia through the establishment of a joint venture with RusHydro and Rostechnologii, but the project was never implemented.

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