Falling Capex makes Russia competitive

Capital expenditure (Capex) for the construction of wind farms in Russia has significantly declined in recent years, and is now competitive with the rest of the world, senior officials at the Russian Ministry of Energy and renewable energy analysts claimed.

by Eugene Gerden 17 December 2018

Capital costs for wind power in Russia is falling due to localised production (pic: Fortum)

The competitive tenders for wind capacity in Russia saw estimated capital costs fall by about 40% compared to previous tenders.

As a result of the latest procurement, the cost of the cheapest application for the construction of a wind power project in Russia fell to RUB 60,000,000/MW (€795,000/MW), in line with global averages.

Experts said the fall in Capex is mainly due to the increased level of localised production of equipment for wind farms.

As a result of the contest, already by the end of the current year wind farms in Russia will be built with the maximum 65% localisation, the wind power association in Russia (RAWI) told local media.

In addition, according to experts, for the first time in the country wind energy will be competitive with traditional energy in cost terms.

Recent assessments of the experts of the Ministry of Energy — taking into account the average capacity utilisation of wind farms in Russia at about 27% — the price of electricity, generated by wind is now lower than the price of energy from coal-fired power plants.