The Russian wind power sector is about to welcome a huge player, Rosatom, the Russian state-controlled nuclear energy company running around 400 subsidiaries.
Recently, VetroOGK, a subsidiary of OTEK which is part of Rosatom, won contracts for 610 MW of wind capacity in the extended procurement for state-supported clean energy capacity distribution in 2018-2020.
“Over the next couple of years, starting this year, we are determined to develop a wind energy business in Russia with a prospect of entering international markets,” Vladislav Bochkov, Vice President for Communications of Rusatom International Network, told SeeNews Renewables.
The company plans to install 150 MW by 2018, 200 MW in 2019, and a further 260 MW in 2020. The total investment is estimated at RUB 83 billion (USD 1.3bn/EUR 1.2bn). The wind farms will be built in the republic of Adygea, Krasnodar, Rostov, and Stavropol region, as well as other locations.
“The 610 MW we were awarded amounts to 17% of the new wind energy capacity projected in the country by 2024,” Mr. Bochkov added.
Russia has set a renewable energy target of 4% in its total energy generation by 2020.
Bochkov emphasised that Russia, a signee of the 2015 Paris Climate Convention, aims to reduce its carbon emission footprint by 2030 up to 70%, “therefore the resolve to pursue wind generation.” According to him, renewables and in particular wind generation are on par with nuclear energy as the company’s fulcrums of clean energy balance.
“As we call Rosatom a carbon-less energy company, we see wind projects as a promising addition to our portfolio,” Bochkov said.
To address new energy business activities, the company founded AO OTEK in 2013 to develop non-nuclear energy projects in Russia.
WIND BUSINESS IN RUSSIA
A Russian tender in early 2016 produced a single bidder for wind power, Finland’s Fortum, which pocketed the 35 MW available. Russian media said that the scarcity of wind bidders back then was due to the 70% local content requirement from 2017. Most hydro and wind power developers found the barrier too high.
Until now, Rosatom did not partake in clean energy distribution tenders because of the requirement for local content. In order to secure state-supported clean electricity purchasing tariffs, bidders have to prove their capability to produce the necessary equipment locally.
Russian media say that, to overcome the hurdle, Rosatom is looking for a business partner which could assemble locally wind farm equipment. Prepreg-SKM, part of Rosnano, another Russian energy holding, has been mentioned as one of the possible contractors.
When responding to SeeNews Renewables, Bochkov did not mention the local content requirement as a hurdle in the past. He insisted that the development of renewable energy worldwide and in Russia has reached “a level” where it starts “impacting” business models of large energy holdings, Rosatom included.
“The projected capacity of wind power to be harnessed in the world over the next 15 years is over 1,000 GW. We view the wind energy business the way we see the nuclear energy business,” he emphasised.
Rosatom's decision to invest in Russia’s wind sector follows efforts by the Russian government to improve the clean energy investment environment in the country, underlined Bochkov.
“The Government has done a lot in improving it. Specifically, the new amendments to the renewables legislation consider now currency fluctuations, and the formulations on the local content requirement have become more detailed,” the Rosatom representative said.
He hopes that Rosatom’s move to wind will motivate other Russian energy market players to follow into Rosatom’s footsteps.
“We do not plan to stop where we are now and we will certainly participate in new similar tenders in the future, hopefully with other market players,” Bochkov noted.
Linas Jegelevicius is editor-in-chief of The Baltic Times newspaper, author of three books and an active freelance journalist. Apart from the domestic market, he is also following the energy developments in all Baltic states and Russia.