Monday 2nd June 2014

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Adam Barber
June 2, 2014
This content is from our archive. Some formatting or links may be broken.
This content is from our archive. Some formatting or links may be broken.
Monday 2nd June 2014

Wind Watch

US and European sanctions against Russia over its invasion of the Crimea clearly make the prospect of investing in Russia look, at best, uncertain.

Does this mean investors will miss the chance to invest in a wind power boom? Not likely. The prospect of a boom is remote, even though Russia is making progress on renewables.

This progress is represented through its new subsidies regime.

The Russian government announced in September a list of 39 projects that would benefit from renewable energy subsidies, including wind farms. This was significant as it was the first ever state support given to renewable energy projects in Russia. And, this month, the government will follow this by revealing more projects that will benefit from the regime.

But to date, wind has not been a big beneficiary. Thirty-two of the 39 projects given backing were solar plants. There were wind projects totalling 1.1GW up for consideration in the first tender round, but only 110MW of them were actually awarded subsidies.

In part, this is because solar power can more easily address the stipulation that the winning schemes have to be able to use at least 50% of locally-produced components.

Clearly, this is a problem for wind. If you don’t have a wind power industry in Russia then how can you source more than 50% of components locally?

Then there’s the practical problem of gaining parts from European or US firms, although it does not close the door to Asia.

Organisations such as the International Finance Corporation have urged Russia to ease local content requirements for wind projects, but to date there is little prospect of this.

As it stands, there are wind farms totalling 1.6GW up for consideration in the second tender, but based on the round one experience, the true figure is likely to be much less.

It is also difficult to believe Russia is serious about wind. It has a target of 3.6GW of wind power by 2020, which is tiny when you compare it to the 91GW already installed in China.

And the nation’s target of 2.5% of energy from renewable sources by 2020 is tiny too. The country currently generates just 0.8% of its energy from renewable sources; and that 2.5% is a reduction on the 4.5% the government had previously agreed in 2009.

It would represent major progress for the country, but also symbolises a weakening of its long-term ambitions.

And there’s another thing. Only last month Russia’s Gazprom and the China National Petroleum Corporation signed a 30-year gas export deal worth an estimated $400bn. It starts in 2018.

The deal was a priority for Russia in the face of increasing energy sanctions from Europe.

Moreover, as the world’s largest natural gas producer, it’s easy to see why renewables including wind, barely features in its thoughts.

Many will be watching the latest tender progress with interest but to suggest that this marks any real shift in Russian energy policy would be far fetched.

For now at least, Russian wind energy remains left out in the cold.

Wind Watch

US and European sanctions against Russia over its invasion of the Crimea clearly make the prospect of investing in Russia look, at best, uncertain.

Does this mean investors will miss the chance to invest in a wind power boom? Not likely. The prospect of a boom is remote, even though Russia is making progress on renewables.

This progress is represented through its new subsidies regime.

The Russian government announced in September a list of 39 projects that would benefit from renewable energy subsidies, including wind farms. This was significant as it was the first ever state support given to renewable energy projects in Russia. And, this month, the government will follow this by revealing more projects that will benefit from the regime.

But to date, wind has not been a big beneficiary. Thirty-two of the 39 projects given backing were solar plants. There were wind projects totalling 1.1GW up for consideration in the first tender round, but only 110MW of them were actually awarded subsidies.

In part, this is because solar power can more easily address the stipulation that the winning schemes have to be able to use at least 50% of locally-produced components.

Clearly, this is a problem for wind. If you don’t have a wind power industry in Russia then how can you source more than 50% of components locally?

Then there’s the practical problem of gaining parts from European or US firms, although it does not close the door to Asia.

Organisations such as the International Finance Corporation have urged Russia to ease local content requirements for wind projects, but to date there is little prospect of this.

As it stands, there are wind farms totalling 1.6GW up for consideration in the second tender, but based on the round one experience, the true figure is likely to be much less.

It is also difficult to believe Russia is serious about wind. It has a target of 3.6GW of wind power by 2020, which is tiny when you compare it to the 91GW already installed in China.

And the nation’s target of 2.5% of energy from renewable sources by 2020 is tiny too. The country currently generates just 0.8% of its energy from renewable sources; and that 2.5% is a reduction on the 4.5% the government had previously agreed in 2009.

It would represent major progress for the country, but also symbolises a weakening of its long-term ambitions.

And there’s another thing. Only last month Russia’s Gazprom and the China National Petroleum Corporation signed a 30-year gas export deal worth an estimated $400bn. It starts in 2018.

The deal was a priority for Russia in the face of increasing energy sanctions from Europe.

Moreover, as the world’s largest natural gas producer, it’s easy to see why renewables including wind, barely features in its thoughts.

Many will be watching the latest tender progress with interest but to suggest that this marks any real shift in Russian energy policy would be far fetched.

For now at least, Russian wind energy remains left out in the cold.

Wind Watch

US and European sanctions against Russia over its invasion of the Crimea clearly make the prospect of investing in Russia look, at best, uncertain.

Does this mean investors will miss the chance to invest in a wind power boom? Not likely. The prospect of a boom is remote, even though Russia is making progress on renewables.

This progress is represented through its new subsidies regime.

The Russian government announced in September a list of 39 projects that would benefit from renewable energy subsidies, including wind farms. This was significant as it was the first ever state support given to renewable energy projects in Russia. And, this month, the government will follow this by revealing more projects that will benefit from the regime.

But to date, wind has not been a big beneficiary. Thirty-two of the 39 projects given backing were solar plants. There were wind projects totalling 1.1GW up for consideration in the first tender round, but only 110MW of them were actually awarded subsidies.

In part, this is because solar power can more easily address the stipulation that the winning schemes have to be able to use at least 50% of locally-produced components.

Clearly, this is a problem for wind. If you don’t have a wind power industry in Russia then how can you source more than 50% of components locally?

Then there’s the practical problem of gaining parts from European or US firms, although it does not close the door to Asia.

Organisations such as the International Finance Corporation have urged Russia to ease local content requirements for wind projects, but to date there is little prospect of this.

As it stands, there are wind farms totalling 1.6GW up for consideration in the second tender, but based on the round one experience, the true figure is likely to be much less.

It is also difficult to believe Russia is serious about wind. It has a target of 3.6GW of wind power by 2020, which is tiny when you compare it to the 91GW already installed in China.

And the nation’s target of 2.5% of energy from renewable sources by 2020 is tiny too. The country currently generates just 0.8% of its energy from renewable sources; and that 2.5% is a reduction on the 4.5% the government had previously agreed in 2009.

It would represent major progress for the country, but also symbolises a weakening of its long-term ambitions.

And there’s another thing. Only last month Russia’s Gazprom and the China National Petroleum Corporation signed a 30-year gas export deal worth an estimated $400bn. It starts in 2018.

The deal was a priority for Russia in the face of increasing energy sanctions from Europe.

Moreover, as the world’s largest natural gas producer, it’s easy to see why renewables including wind, barely features in its thoughts.

Many will be watching the latest tender progress with interest but to suggest that this marks any real shift in Russian energy policy would be far fetched.

For now at least, Russian wind energy remains left out in the cold.

Wind Watch

US and European sanctions against Russia over its invasion of the Crimea clearly make the prospect of investing in Russia look, at best, uncertain.

Does this mean investors will miss the chance to invest in a wind power boom? Not likely. The prospect of a boom is remote, even though Russia is making progress on renewables.

This progress is represented through its new subsidies regime.

The Russian government announced in September a list of 39 projects that would benefit from renewable energy subsidies, including wind farms. This was significant as it was the first ever state support given to renewable energy projects in Russia. And, this month, the government will follow this by revealing more projects that will benefit from the regime.

But to date, wind has not been a big beneficiary. Thirty-two of the 39 projects given backing were solar plants. There were wind projects totalling 1.1GW up for consideration in the first tender round, but only 110MW of them were actually awarded subsidies.

In part, this is because solar power can more easily address the stipulation that the winning schemes have to be able to use at least 50% of locally-produced components.

Clearly, this is a problem for wind. If you don’t have a wind power industry in Russia then how can you source more than 50% of components locally?

Then there’s the practical problem of gaining parts from European or US firms, although it does not close the door to Asia.

Organisations such as the International Finance Corporation have urged Russia to ease local content requirements for wind projects, but to date there is little prospect of this.

As it stands, there are wind farms totalling 1.6GW up for consideration in the second tender, but based on the round one experience, the true figure is likely to be much less.

It is also difficult to believe Russia is serious about wind. It has a target of 3.6GW of wind power by 2020, which is tiny when you compare it to the 91GW already installed in China.

And the nation’s target of 2.5% of energy from renewable sources by 2020 is tiny too. The country currently generates just 0.8% of its energy from renewable sources; and that 2.5% is a reduction on the 4.5% the government had previously agreed in 2009.

It would represent major progress for the country, but also symbolises a weakening of its long-term ambitions.

And there’s another thing. Only last month Russia’s Gazprom and the China National Petroleum Corporation signed a 30-year gas export deal worth an estimated $400bn. It starts in 2018.

The deal was a priority for Russia in the face of increasing energy sanctions from Europe.

Moreover, as the world’s largest natural gas producer, it’s easy to see why renewables including wind, barely features in its thoughts.

Many will be watching the latest tender progress with interest but to suggest that this marks any real shift in Russian energy policy would be far fetched.

For now at least, Russian wind energy remains left out in the cold.

Wind Watch

US and European sanctions against Russia over its invasion of the Crimea clearly make the prospect of investing in Russia look, at best, uncertain.

Does this mean investors will miss the chance to invest in a wind power boom? Not likely. The prospect of a boom is remote, even though Russia is making progress on renewables.

This progress is represented through its new subsidies regime.

The Russian government announced in September a list of 39 projects that would benefit from renewable energy subsidies, including wind farms. This was significant as it was the first ever state support given to renewable energy projects in Russia. And, this month, the government will follow this by revealing more projects that will benefit from the regime.

But to date, wind has not been a big beneficiary. Thirty-two of the 39 projects given backing were solar plants. There were wind projects totalling 1.1GW up for consideration in the first tender round, but only 110MW of them were actually awarded subsidies.

In part, this is because solar power can more easily address the stipulation that the winning schemes have to be able to use at least 50% of locally-produced components.

Clearly, this is a problem for wind. If you don’t have a wind power industry in Russia then how can you source more than 50% of components locally?

Then there’s the practical problem of gaining parts from European or US firms, although it does not close the door to Asia.

Organisations such as the International Finance Corporation have urged Russia to ease local content requirements for wind projects, but to date there is little prospect of this.

As it stands, there are wind farms totalling 1.6GW up for consideration in the second tender, but based on the round one experience, the true figure is likely to be much less.

It is also difficult to believe Russia is serious about wind. It has a target of 3.6GW of wind power by 2020, which is tiny when you compare it to the 91GW already installed in China.

And the nation’s target of 2.5% of energy from renewable sources by 2020 is tiny too. The country currently generates just 0.8% of its energy from renewable sources; and that 2.5% is a reduction on the 4.5% the government had previously agreed in 2009.

It would represent major progress for the country, but also symbolises a weakening of its long-term ambitions.

And there’s another thing. Only last month Russia’s Gazprom and the China National Petroleum Corporation signed a 30-year gas export deal worth an estimated $400bn. It starts in 2018.

The deal was a priority for Russia in the face of increasing energy sanctions from Europe.

Moreover, as the world’s largest natural gas producer, it’s easy to see why renewables including wind, barely features in its thoughts.

Many will be watching the latest tender progress with interest but to suggest that this marks any real shift in Russian energy policy would be far fetched.

For now at least, Russian wind energy remains left out in the cold.

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Full archive access is available to members only

Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.