A 450 MW applications for wind power projects submitted for RES tender – 2017 in Russia.

Today RES tender projects started in Russia. According to the information of the Administrator of the Trading System, 450 MW applications have been submitted for the construction of wind farms during the first day of applications submission. A total of 1,900 MW of applications can be submitted for the tender in this year: 250 MW for 2018 year of commossioning, 300 MW for 2019 year of commissioning, 350 MW for 2020 y.o.c., 500 MW for 2021 y.o.c., 500 MW for 2022 y.o.c.

In accordance with the rules of the tender, the name of the applicant company (applicants) was not disclosed. As experience of JSC “Fortum” shows, between the bid for the tender with the presence of a site “with complrted wind monitoring” and the beginning of installation of wind turbines, it can take about 1.5 years. Given this example, it can be judged with some degree of certainty that a part of the “volumes” submitted to the tender can be tied to specific sites, since the 2018th year of putting the sites into operation was declared for 50 MW (a so-called “grace period” of 1 year). A 200 MW of the total volume will have to be commissioned in 2019 (2020), which enables the applicant to complete negotiations with the developer to purchase the site, or complete pre-project work on his own, or complete wind monitoring. And 200 MW will have to be put into operation in 2022 (2023), which most likely indicates that the applicant left this volume for himself as perspective.

Given the high level of liability for the late comossioning and high localization requirements (from 2019 – 65%), we can assume that it is a major market participant (s) which has agreements with at least two potential vendors (OEMs) for the supply of wind generators localized in Russia. In any case, the existing system of requirements for applications for the construction of wind farms leaves room for maneuver, since the requirements for the sites themselves are understated. In our opinion, such a system requires revision, since it greatly reduces the opportunities for new investors to enter the market and leaves more room for maneuver to traditional large participants in the traditional generation market.