Renewables in Russia move forward

The Russian Wind Energy Association together with the Association of Solar Energy organised a workshop on “Localization of equipment production for the renewable energy sector – problems and solutions” on 15 October 2013 in Moscow. Things are slowly starting to move forward since Russia organised their first renewables tender and plans are already in place for  a second one next June for 2015 to 2018.

The localisation workshop was attended by representatives from the Russian Ministry of Energy, Russian Chamber of Commerce and the world’s leading wind energy manufacturers (Gamesa, General Electric, Vestas, ABB), major generating companies (Evrosibenergo, EoN, ENEL, Fortum) and Russian companies involved in or planning to participate in international production networks, representatives of the investment community, project developers and operators.

In addition, nearly 50 international and Russian experts participated in the workshop to discuss a wide range of issues concerning local content rules in particular and auxiliary equipment for renewable energy sector in Russia. Solar and wind energy experts shared experiences on topics such as local content requirements as part of renewable energy incentives; time frames for installing new production lines; certification procedures for local production capacities; as well as the degree of readiness of the Russian industry to develop renewable energy equipment production.

The key statements of the workshop included:

  • The Russian Government’s aim to localize production of renewable energy equipment was confirmed, as evidenced by the successful results of the tender for solar energy projects in the framework of the adopted decisions for the localization of equipment production for solar industry. However, the same conclusion cannot be made in respect of wind energy and small-scale hydropower projects.
  • According to the workshop participants, the main reason for the weak participation of applicants in the wind tender was that it was “unmanageable” due to the localization requirements which could not be met in the required timeframe. In order to reach 55% localisation level by 2015 and 65% by 2016, factories and plants in Russia would have to start delivering and installing new equipment now. In contrast to the solar industry, the wind industry in Russia is still non-existent today. The current state of the industry makes it impossible to achieve localization level of production for 2014-2016 as declared by the Governmental Decree of the Russian Federation. Representatives from the key players in the wind energy market (Vestas, Gamesa, General Electric, ABB) confirmed that the creation  of a local production industry in a developing wind energy market requires from 2 to 4-5 years to manufacture the hardware components (from towers to modern wind turbine blades).
  • The selection of Russian enterprises,  determining if equipment complies with international requirements, coordination of technical, organizational and certification activities, the development of technological and other documentation, creation of benchmark testing will take at least 2-2.5 years according to the experts. In that case theproduction and testing of the first set of components in the Russian Federation could only be started in 2016.
  • The participants expressed a general opinion on the realistic pace of localised equipment production  for the wind industry: 2014 – 20%, 2015 – 20%, from 2016 to 2018 – 35%, from 2019 to 2020 – 50%. Also, the workshop made a number of amendments to the draft of the Russian Industry and Trade Ministry departmental Order “On Approval of the Procedure for Determining the degree of equipment production localization for generating facilities operating on the basis of renewable energy sources”. According to the workshop participants, the issue of technology transfer and localization of wind energy equipment with the proposed parameters could be solved on the basis of the proposed changes to the pace of localization with active state support and close international scientific and technical cooperation in this area. The workshop participants have decided to  appeal to the Government of the Russian Federation with the industry’s position and to propose  to change the order and level of requirements for the production of the renewable energy equipment.