/17th July 2017, RENEWABLE MARKET WATCHTM, RAWI, RIA/ Russian Association of the Wind Power Industry (RAWI) and Russian Investment Agency “Invest in Russia” (RIA) signed an agreement on the creation of the “Wind Energy Fund” with a target amount of funds of 100 billion RUB (€ 1.4 billion). The main goal is to invest in the creation of wind power. The term of the fund is set at 15 years with the possibility of prolongation. The investment period is not more than 7 years; the target rate of return on projects is at the level of 15%. The main feature of creating an investment fund is using the mechanism of state guarantees of return of funds. According to Russia Wind Power Market Outlook 2016 - 2025, the country has abundant oil, gas and coal production capacity backed up by enormous reserves. Still, it also has the potential to be a giant in the area of renewable energy. Russia's new policy direction – and particularly its nascent interest in alternative energy – is important because Russia is such a large energy exporter (number one in natural gas and number two in oil), and is now the third-largest emitter of CO2 from fossil fuel (behind China and the United States).
Given the difficulty of raising domestic energy prices in Russia and a possible shortfall in gas and oil production, expanded use of renewable energy sources at home could save some expensive hydrocarbons. Using renewables could over time free more oil and gas for export, but probably not enough to make much of a difference.
According to the Russian Investment Agency, onshore wind farms are currently the most competitive sources of electricity due to reduced specific capital costs. The consecutive improvement of wind turbine designs and the increase in unit capacity of aggregates allowed to reduce the specific capital costs for wind turbines and, consequently, the cost of electricity produced. According to the expert community, each doubling of wind power plants' unit capacity ensured a reduction in the unit cost of their construction by an average of 7%.
According to RAWI, wind power development in Russia affects the changes in business models within the market. For instance, today already, as it was at the peak of the market in Europe, the investor is not ready to pay a high price for site search and project preparation and can often do this work independently. Simultaneously, the potential and quality of prepared such projects in Russia are high, and an investment decision is needed to implement such projects. This will ensure the high dynamics of the market development and expansion of the field to create and develop the industry of wind turbine production in Russia.
The signing of the agreement took place in the working environment, which was preceded by consultations of the agreement partners.
More information about this very promising wind power market you may read here: Russia Wind Power Market Outlook 2016 - 2025