Despite Russia’s high wind power potential, the wind power industry development in the country is very weak, which analysts explain by the lack of government support.

Experts note that construction of wind power facilities is quite expensive, and power output at them is not stable, which are the industry’s main disadvantages. While some analysts say the industry could develop in Russia if the necessary regulatory decisions are made and recoupment of projects is ensured, others believe that modernization of existing Russian power facilities is currently more important.

People have been using the wind’s energy since ancient times, when they built windmills to grind wheat and other grains. Windmills producing electric power were invented in Denmark, where the first wind power plant was built in 1890. The golden age of the wind power industry was in the 1950s, when the Soviet Union was annually producing 9 000 wind power units. However, in 1960-1980, the country’s power sector was oriented on the construction of large thermal, hydropower, and nuclear power plants, and wind power facilities were unable to withstand the competition, with their serial production subsequently closed.

However, driven by goals to increase energy saving and improve the environment, the Russian government recently decided to pay more attention to the use of renewable energy sources, including wind. Under an energy development strategy adopted in late 2009, the share of renewable energy sources in the power sector should increase to 4.5% by 2020 from less than 1% currently.

Russia has the highest wind potential in the world, with its wind power resources estimated at 10.7 gigawatts (GW). As estimated by experts, the potential could allow wind power production in Russia to account for 30% of the country’s total annual power output.

The most favorable areas for wind power development in Russia include northwestern regions, such as the Murmansk and Leningrad regions, the southern part of European Russia, Siberia, and the Far East.

Wind is an infinite and environmentally clean source of power. As wind blows almost everywhere, the wind power industry development is possible practically everywhere. There is also no need to produce and transport the energy source. Armen Markaryan, a partner of R-Energo, a Russian-Norwegian company engaged in project development and consulting in the renewable energy and energy efficiency sectors, believes that the main advantage of wind power plants is the possibility of quick construction and their compactness.

However, despite vast possibilities for wind power development, Russia is currently falling behind other countries as far as the volume of installed wind power capacities and pace of growth are concerned. At present, the combined capacity of wind power facilities in Russia amounts to around 18 megawatts (MW), the industry is growing around 8% per year, compared to a double-digit annual growth in a number of European countries. In Western Europe the combined capacity of wind power facilities is close to 200 GW.

The development of the wind power industry in Russia is obviously weaker than in Western European countries, but there are still a number of large projects being implemented. Specifically, hydropower company RusHydro announced plans to spend 1.9 billion roubles to build a 23-MW wind power plant in the Primorsky region and build the 1-GW Nizhnyaya Volga wind power park in the Volgograd region. Among other projects, Russian company VentRus is expected to spend 250 million euros to build three wind power parks with a combined capacity of 150 MW in the Orenburg region. Russian power engineering company Atomenergomash, part of nuclear power corporation Rosatom, is expected to spend 45 billion roubles to build wind power parks in the constituent republic of Adygeya. Also, Atomenergomash reportedly agreed to acquire a 51% stake in Windlife Arctic Power, the Russian unit of the Netherlands-based Windlife Energy, which is expected to build a 200-MW wind power park in the Murmansk region.

The wind power industry is now reviving, but there are not yet any domestically produced wind generators that have proven themselves to be good. Western companies currently dominate the Russian market of wind power equipment, but they are starting to cooperate with Russian companies. Specifically, German engineering company Siemens signed an agreement with Russian industrial conglomerate Rostekhnologii and RusHydro on the production of wind generators in Russia.

The surveyed experts agreed that the wind power industry is largely undeveloped in Russia. “The wind power industry development in Russia is very weak. Despite announcements about the construction of large wind power parks in the Far East and northern Russia (wind power plants on Russky Island and on the Kola Peninsula), there are no serious results,” said Markaryan from R-Energo. Markaryan noted that there was almost no interest in the wind power industry shown by investors in Russia – some companies are trying to do something, but there are no serious results, he said.

Experts believe that the high price of wind power plants construction and the lack of government support hamper wind power development in Russia.

“Russia has a huge wind power potential because of its large territory, but the construction of wind power plants is very expensive,” said Vasily Konuzin, director of an analytical department at A’lemar Investment Group.

Specifically, the cost of building wind power plants amounts to U.S. $1 100-$1 800 per kilowatt of installed capacity, compared to $300-$600 per kilowatt of installed capacity required to build traditional power plants operating on natural gas and coal, as estimated by Stanislav Chernitsa, general director of AEnergy, a Russian company operating in the alternative energy sector.

However, experts claim that the expenditures of building wind power plants are lower than those of building facilities operating on other renewable energy sources. For instance, the construction of solar power plants costs $3 000 to

$6 000 per kilowatt of installed capacity, as estimated by Chernitsa.

The surveyed analysts said that government subsidies and stimulus measures were needed for the development of the wind power industry in Russia. “Without support, only isolated wind power plants will be built,” said Konuzin from A’lemar.

Irina Filatova, an analyst at investment company BCS, also pointed to the need for government subsidies, saying that investments in wind power projects were not currently being recouped. “Construction of wind power plants is not eco-nomically reasonable. Now it is more like venture investing,” she said.

Speaking about the development of the wind power industry, Markaryan from R-Energo said that while some projects were economically reasonable, the majority of projects required mark-ups to rates. “The wind power industry is not able to develop without government support,” he said.

Outlining the disadvantages of wind power industry, Markaryan said that the main disadvantage was that “power output at wind power plants is not stable and depends on the presence of wind,” which creates difficulties for power grids and Russian dispatching company System Operator. Eliminating this disadvantage requires additional equipment, which further increases the cost of wind power projects, the expert said. Disadvantages also include the short period of operations of wind power plants. For comparison, thermal power plants are able to operate constantly, hydropower plants operate an average of 4 000 to 5 000 hours per year, and wind power plants operate around 2 000 hours per year, as provided by Markaryan.

The surveyed analysts did not provide favorable prospects for wind power development in Russia. Filatova from BCS noted that the Russian electric power sector currently had more important tasks to do. “The modernization of existing electric power plants is more important now,” she said.

Markaryan from R-Energo also wasn’t very positive. “On the whole, prospects for development are not rosy,” he said. “The share of wind plants is not expected to reach the symbolic 1% in the country’s energy balance in the near future,” he said. But there are prospects for wind power plants on isolated territories, he added.

If the necessary regulatory decisions are made and the possibility of projects’ recoupment is provided, then the wind power industry will develop in Russia, Konuzin from A’lemar said.