With abundant crude oil and natural gas reserves, Russia is a latecomer to wind power. However, it has now held its first auctions, commissioned its first project, and produced its first components.
The joint venture of Finnish developer Fortum and Russian technology giant Rusnano has dominated the country’s first two wind auctions. It won 1GW of 1.65GW available in June 2017, and then 823MW from the 830MW quota a year later.
Meanwhile, to comply with the country’s strict local content laws, manufacturers are preparing to set up production facilities in Russia.
In 2018, 55% of a wind farm must be produced locally, but this requirement will increase to 65% in 2019.
Developers receive state support through power contracts for top-up payments from the wholesale energy market, and these measures will remain in place until 2023.
However, despite petitions to extend the program, the government has not decided on further mechanisms to develop the wind sector.
RUSSIA: Wind power scarcely exists at all in Russia -- just 14MW across the whole of this huge country -- but there are indications that this could change quite dramatically in the next few years.
EUROPE: Wind energy markets on Europe's eastern outskirts, once fertile terrain for those looking for growth in the face of declining opportunities in more mature markets in western Europe, have lost some of their appeal.
EUROPE: As a growing number of wind-energy investors have targeted central and eastern Europe (CEE) for growth, regulatory uncertainty in key markets such as Poland and Romania has complicated the prospects for financing and could slow down expansion in these regions.
UKRAINE: The Ukrainian wind industry is steadily developing as part of state plans to increase the share of renewables in the energy balance of the country to 11% by 2020 and a strong interest from private investors.
Developers will have to export equipment equivalent to 8% of the cost of building their project in Russia to qualify for state support, according to the Russian industry and trade ministry’s latest proposals.
Domestic and international companies developing wind farms in Russia due online this year have called on the government to allow them to postpone commissioning without incurring the hefty fines this would usually trigger.
The current situation in the Russian wind power industry remains stable, despite a growing threat of a recession in the national economy and the ongoing spread of the COVID-19 virus.
Investment group Rusnano and billionaire Alexey Mordashov have announced plans to set up an investment fund for the localisation of electrical wind turbine equipment in Russia, according to local media reports.
The cost of building wind projects in Russia could significantly increase if state plans to allow only domestic companies to complete the design and installation works are approved.