By Swann Bigot, legal expert and consultant in international affairs, for Eurasia Network – March 4, 2018

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Wind turbines, May 2017 – Photo credit : S. Bigot

Russia is traditionally known for being a major oil and gas producer. However, the country is moving towards renewable energy and a new market is rising, bringing new technology solutions and development opportunities.

The first 35 MW wind farm of Russia, built by the Finnish company Fortum in the village of Krasny Yar, Ulyanovsk oblast, officially started to supply electricity to the local power grid last January, according to a press release of the Ulyanovsk Region Development Corporation. This is the first wind power plant operating in the Russian wholesale electricity and capacity market.

The construction started in December 2016 and cost € 70 million (RUB 5 billion). The 14 wind turbines DF2.5MW-110 have been manufactured and supplied by the Chinese company Dongfang Electric Wind Company Limited.

“The Ulyanovsk region is the first in Russia to host a major wind power plant. It is therefore essential for us to cooperate with a global company with expertise in the renewable energy sector. Moreover, Fortum has invested over € 70 million in the project and new jobs and unique competencies are being added to the local economy” stated the governor Sergey Morozov.

This renewable energy facility will also bring new income to the gross regional product, thanks to the sale of electricity to the national energy market and the taxes on it. Fortum is going to pay over € 1.4 million (RUB 100 million) every year in local taxes.

According to Sergey Vasin, CEO of the Ulyanovsk Region Development Corporation, this new wind power plant is a source of opportunities for regional companies and the development of international cooperation.

Development of manufacture capacities

An agreement was recently signed with the Danish company Vestas Wind Systems A/S regarding the construction of a blade factory for wind turbines located in the Zavolzhskiy district of Ulyanovsk. Vestas is going to invest around USD 24.5 million (RUB 1.4 billion) in this project, first of this kind in Russia, with an annual production capacity of 300 blades. Towers for wind turbines could be also produced.

Read also : The Danish Vestas will build its first blade factory in Russia

The Danish manufacturer would be ready to meet the needs of Fortum in wind turbines in a volume of 3.5 GW by 2022. The construction of the plant is expected to start in the coming months and would be achieved by the middle of 2019. Tommy Rahbek Nielsen, Senior Vice President of Vestas, said that 200 new jobs will be created.

The governor Sergey Morozov earlier stated that Fortum and the Russian state corporation Rusnano intend to increase the wind power capacity of region up to 300 MW, creating promising opportunities for the coming blade manufacture plant.

Seven wind farms in four years

Fortum and Rusnano want to build a lasting partnership with Vestas as manufacturer and provider of blades for future wind power plants in Russia. This cooperation is going to benefit from a favorable context.

Indeed, the Finnish company and the Russian state corporation secured six wind farm projects with total capacity of 236 MW in the Ulyanovsk region by 2021 according to official results of the federal tender on renewable energy held last June. Fortum together with Rusnano would build two wind farms totaling 36 MW by December 2020 and four wind farms of 50 MW of capacity each by December 2021. The Ulyanovsk Region Development Corporation is now conducting wind measurement operations in three districts.

This ambitious plan was confirmed during an investment forum in Sochi in February, when the Governor Sergey Morozov and the Executive Vice President, Russia Division and General Director of PJSC Fortum Alexander Chuvaev announced the coming construction of a 50 MW wind farm, with the Danish Vestas as technology partner. Sergey Vasin, CEO of the Ulyanovsk Region Development Corporation, stated that the future wind power plant would start energy supplies in the first half of 2019.

Added to the recently achieved 35 MW wind farm, the six aforementioned future wind power stations will upgrade the regional wind power capacity up to 271 MW, with a total investment which would amount more than $ 440 million (RUB 25 billion). Once achieved, these facilities will play a key role in the renewable energy infrastructure of the country, as the federal program plans a 3.35 GW wind power capacity across the Russian territory by 2024.

Read also : Italian company Enel will build the largest wind farm in Arctic

Authorities of the Ulyanovsk oblast consider to reach 1 GW of wind power capacity by 2024, as stated Sergey Morozov during the Russian Investment Forum held in Sochi in February 2017. The Governor also discussed the conditions of possible cooperation in the field of renewable energy with Carlo Palashano Villamagna, CEO of PJSC Enel Russia, during the 2018 edition of this event. PJSC Enel Russia is the Russian subsidiary of Enel Group, a world leader in energy.

Such projects will need equipment. Therefore, the blade factory of Danish Vestas will be built to meet demand for the developing wind power sector in Russia in compliance with the 65% level of localization of manufacture required by Russian regulation.

Read also : Dutch company will build a 150 MW wind farm in Russian Caucasus

These renewable energy and manufacture projects make sense since Russia has a good wind potential according to the data of the world wind atlas from the International Renewable Energy Agency (IRENA). One of the leading places is the Ulyanovsk oblast.

Wind measurements conducted showed that the average annual wind speed in this region is 6.5-7.5 meters per second on different sites. This is a good industrial wind capacity, from which it is possible to generate energy with a good power coefficient of 33-35%. The power coefficient shows how efficiently a turbine converts the energy of the wind to electricity. The established industrial standard is 35-40%.

New opportunities for the youth

The development of renewable energy sources in Russia also creates opportunities with new training programs for students, such as the “Chair of Wind Power Technologies” and the “Academic Chair of Wind Energy Systems and Complexes” in the Ulyanovsk State Technical University. The future engineers started the training program in October 2017, reported TASS news agency.

Ruslan Fedorov, the Head of the Chair “Wind Energy Systems and Complexes”, told journalists that “The main task is to train the future engineers needed by the Ulyanovsk oblast. They will work on the local wind power projects.”

The new Academic Chair founded in May 2017 is now training 10 students. Along with basic university subjects, the future engineers will study wind turbines and the main elements of wind power plants, among other related issues.

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Wind turbines, May 2017 – Photo credit : Swann Bigot

Ruslan Fedorov explained that “The Chair has enough experienced professionals in the teaching staff. We are in contact with representatives of Fortum and of Vestas, the Danish wind turbine manufacturer which will build a plant in the oblast by 2019. Experts from Finland and Denmark will come to the University to read lectures for students.”

Note that these two Scandinavian countries benefits from a strong experience in wind energy. Denmark holds a world-leading position with a wind power installed capacity of 5,300 MW in 2017 while its wind turbines accounted for 71.8 percent of renewable energy electricity produced in the country in 2016.

Finland had a 2044 MW wind power capacity with 153 installed wind turbines at the end of 2017, according to the Finnish Wind Power Association.

Read also : Italian Enel to invest € 132 million in a large wind farm in Southern Russia

Local students will be also trained by specialists from the Ulyanovsk Center for Technology Transfer, LLC (ULNANOTECH), who take part in the maintenance of the 35 MW wind farm.

Furthermore, Ruslan Fedorov said that the launch of this training program in the University raised interest in wind power technology and many citizens would have asked how they could install such equipment at home. Such a domestic use of wind energy will be investigated by students while local industry would have expressed interest in opportunities to reduce dependency on the central power supply system, revealed the head of the Chair.

Some engineering and energy companies from remote settlements interested in wind power solutions to supply their communities with electricity have already contacted the Ulyanovsk State Technical University with job offers for future graduates.

Major changes have occurred over the past five years in Russia in the support of renewable energy. It has become the source of technological breakthrough and new investment opportunities as the country set the official target of 4.5% of renewable energy share in the national energy mix by 2024. 

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© Copyright 2018 – Swann Bigot, legal expert and consultant in international affairs.

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