Wind from the East

According to Mark Rowe and MJ Deschamps, Russia seems to be taking an interest in renewable energy.

In Russia, politics is everything, and politics invariably means what
the state’s two figureheads determine: Dmitri Medvedev, the president,
and Vladimir Putin, the ex-­president and current prime minister, who is
likely to again become president next year despite falling support for
his United Russia party in last week’s parliamentary elections.

So when noises are heard coming from the Kremlin signalling a change
in attitude towards green energy, the wise betting is that there is
political weight behind them. Russia comes from a low starting
point. Under Putin’s rule, Russia rolled back several green laws and
even removed caps on pollution from coal-fired power plants.

In June this year, Vladimir Zakharov, director of the Institute of
Sustainable Development and Medvedev’s closest adviser on climate
issues, said: “Russia has an enormous potential to restructure the
economy towards becoming more environmentally friendly and cost
effective, but we lack the knowledge. We should also make use of our
tremendous renewable energy resources, especially the great potential
for wind energy.”

Investors are already moving into Russia. Last year, Siemens formed a
joint venture with Russian companies Rostechnologii and RusHydro to
supply the wind sector in Russia. The company will set up production
facilities for wind turbine­ components for the Russian market and will
also be responsible for sales and service of Siemens wind turbines in
Russia and other countries. The aim is to install 250-500MW of turbines a
year by 2015.

External political pressure is also being applied. In June, US
energy secretary Steven Chu met with Russian government officials and
scientists to promote US investment in clean technology exports to the
country. 

There have been other solid steps too. Earlier this year, Rosenergo,
the Russian energy agency, signed a memorandum of understanding with
the International Finance Corporation (IFC), an arm of the World Bank,
committing itself to help the country improve energy efficiency in
industry and housing, develop a renewable energy market and reduce
greenhouse gas emissions. ”The aim is to educate the market about the
benefits of investment in residential and industrial energy efficiency,
develop pilot renewable energy projects in the regions, and disseminate
best practices on resource efficiency,” says Natalia Golovko, an IFC
spokeswoman in Moscow.

The underlying issue is that Russia is aware that it needs to
replace its outdated and inefficient Soviet-era infrastructure – and
this makes it an opportune time to invest in renewables. ”The business
issue is not the pressing concern,” says Patrick Willems, the IFC’s
Russia renewable energy programme manager. ”Russia is well endowed
thanks to traditional energy. It’s more about the framework of
modernisation. They know they have outdated technology and that it makes
sense to replace it with technology that will last for future
generations.”

To stimulate action, the parliament has set green energy
targets. Russia is massively wasteful in the way it uses energy, and
parliament wants demand cut by 40 per cent by 2020 through the
introduction of energy efficiency measures. By the same year, it also
wants renewables to account for 4.5 per cent of total generation
capacity. Rosenergo estimates that these steps will enable Russia to
save 240 billion cubic metres of natural gas, 89 million tonnes of coal,
340 billion kilowatt-hours of electricity, and 43 million tonnes of
crude oil.

Unsurprisingly, there are tensions between this green push and the
country’s overwhelming reliance on oil and gas, as well as its current
stranglehold on the transportation of fossil fuels from the Caspian Sea
to the West. According to Yulia Chernyakhovskaya, deputy director
general of Rosenergo: “There are quite broad contradictory discussions
between policymakers and market stakeholders on the fate of renewable
energy in Russia. Russia has a generally rather cold climate, a large
territory with different geographical, industrial and micro-economic
conditions …There are spots with potential for wind and solar that
have low local energy demand or an extensive existing generation base.”

By 2020, she envisages biomass accounting for 65 per cent of green
energy, small-scale hydro and geothermal 25 per cent and wind and solar

5 per cent each. She thinks public pressure will help because green
energy is becoming increasingly fashionable. ”People in Russia are
getting more concerned about environmental and sustainability issues,”
says Chernyakhovskaya.

If Medvedev and Putin are serious about their green credentials,
they can rely on the fact that Russia has the knowledge base to support
it. ”Russia has engineers who are as bright as anyone,” says the IFC’s
Willems. ”It’s more a question of cost: Russia could develop its own
equipment, but it is running decades behind companies in the West. By
the time it has developed the same level of knowledge, it would probably
be more economic for them to have imported the equipment.”

Chernyakhovskaya identifies another major challenge. ”Currently
there are no proper institutional conditions in Russia for renewable
energy systems development,” she says. ”The biggest challenge is not in
the technology – which could be Russian or localised from foreign
partners – but in feasible financial models for renewable energy
projects from the investors’ and creditors’

point of view.”

“Russia is probably not going to develop renewable energy at full
speed next year,” Willems concedes. ”That’s not to do with reticence,
it’s more to do with having other priorities, but we do notice a
positive change in language from the ­government.”

Mark Rowe and MJ Deschamps are freelance journalists.

Ship mate: Poland joins
Russia in support for wind Poland’s historic Gdansk shipyard, which
has long been the site of construction of solid steel structures and
shipbuilding, is now working towards becoming the leading steel
structure supplier for onshore and offshore wind projects in Europe. 

The Gdansk shipyard is now manufacturing 270-tonne, 100m high
turbines for wind power plants. Thomas Gaardbo, vice president of a
shipyard sister company GSG Towers (responsible for the sale of the
structures), says the turbines are being exported and distributed to
energy customers such as Nordex Poland, with markets mainly in Poland,
Sweden and France. 

“In the future we will be servicing offshore projects in northern
Europe on a broad scale,” he says. Three hundred wind towers are
expected to be built by 2014 at the Gdansk plant. 

According to a report from the Gdansk branch of Poland’s
Electrotechnical Institute, wind energy is the most dynamically
developing branch of the renewable energy market in the country. The
Polish Wind Energy Association has forecast that onshore wind will
amount to 10GW by 2020, up from 1GW in 2010.

This will help coal-dominated Poland meet its European Union clean
energy targets by 2020, and will generate employment. ”Demand is rising,
and we are building capacity for this increase,” Gaardbo says. He adds
that the Polish market is particularly attractive, “where it is
economically feasible to deliver towers and other steel structures from
Gdansk – both for on and offshore projects”.