Panel discussion at ATOMEXPO: “The new power industry. Integration into the global supplier chain. What are the prospects?”

Vladimir Knyaginin, Vice President of the CSR Foundation, Chairman of the Board of CSR North-West was the moderator of the discussion.

For the first time, the discussion participants focused on the technologies necessary for successful functioning and development of the industry rather than the prospects of the renewable energy industry. “The market participants have been determined. The stakeholders and their activities in the Russian wind power industry market are known. The question is: what will be their objectives? What will the Russian wind power industry look like from industry’s point of view?” Emin Askerov asked, setting the tone of the expert meeting.

Rosatom which is set to build wind farms with a total power of 970 MW by the end of 2022, has the most ambitious program for localization of the construction of wind power plants (WPP) in Russia and has already made decisions concerning production cooperation. It will assemble hubs and nacelles at Atomenergomash. Tower manufacture will take place there as well. The casting process will also be performed in collaboration with Atomenergomash but in Petrozavodsk. Blades – one of the most complex WPP parts – will be manufactured in collaboration with UMATEX. According to Emin Askerov, the level of localization may exceed 70 % in the future. The goal of JSC "OTEK" is to access foreign markets with a competitive product. As a result of the localization of wind power plant manufacture in Russia, the product will be not only energy, but also the Russian-manufactured wind turbine.

The following main trends exist in the global market for wind power plants:

• generator power growth;
• increase of wind impeller diameter;
• transition from reduction gears to direct drive;
• tower quality and increase in height.

The Director for Licensing and Joint Businesses of Lagerwey, Sjoerd Sieburgh Sjoerdsma, also agrees with this. As the meeting participants noted, Russia is accessing an already established technology market. The only way to keep pace is an international partnership with an established industrial stakeholder ready to promote not only existing competitive products, but also a number of promising solutions. Lagerwey is ready to localize in Russia manufacture of the main components of its wind turbines. In the opinion of Sjoerd Sieburgh Sjoerdsma, it does not make sense for Russia to put all its efforts into creation of its own unique designs under conditions of a fast-developing market and a pool of strong stakeholders. What is important now is to attain competencies in the new industry and increase production in order to ensure the ability to access the market with a high-quality product. Currently, many countries developing wind power receive various governmental subsidies and it is quite reasonable that people want to invest in a product manufactured in their own country rather than buying WPPs from Europe or China.

Emin Askerov noted that the technological partnership with Lagerwey is the optimal format. By launching the field-proven design in Russia, the partners are laying the groundwork necessary for the next step. Lagerwey has started testing a 4 MW wind turbine which is set to be localized in Russia by JSC "OTEK". Such a turbine is required in Russia as wind speed does not usually exceed 8 to 9 metres per second in the main power consumption areas. The tower height and the increase in wind impeller diameter ensure increased generation from a single point, and the modular tower design allows installation in areas with non-developed infrastructure.

The Head of the Electric Power Industry Department of the Energy Center of the Skolkovo Moscow Management School, Alexey Khokhlov, noted that Rosatom has selected the correct strategy by making a decision to diversify its business in the non-carbon power industry segment. He emphasized the importance of developing additional strategies for the possible use of the strengths of the State Corporation in proposing integrated solutions.

Yuri Yeroshin, Vice President for Production Management and Trading Portfolio of OJSC Fortum, discussed the experience of building a wind farm in Ulyanovsk. Even though the company has not addressed the localization problem yet, the representative of Forum noted that the requirements for construction of such facilities in Russia are very high and even excessive.

Roland Roesch noted that according to forecasts of the International Renewable Energy Agency (IRENA), by 2020 the share of renewable energy sources (RESs) in Russia may amount to 2.5 % of power consumption. This does not include hydroelectric power generation. “The development of the renewable energy industry today is not dependent on subsidies or subsidized businesses. These are successful business cases having high investment potential”, – the IRENA representative said. In 2010-2030 the amount of annual investment in the renewable energy industry will be 15 billion USD, with 22% in wind power.

According to estimates by Roland Berger, subsidization of the renewable energy industry in Russia is decreasing year by year and is transitioning to a more competitive range.

Denis Borisov (Roland Berger) emphasized that major RES companies increasingly encounter three types of competitive challenges:

• more market-oriented legislation and pricing models for facilities being commissioned and electrical energy;
• more noticeable presence of non-profile (non-energy) investors and start-ups;
• more intense competition in the wind power industry market.

In order to meet such competitive challenges, the major stakeholders of the industry, as shown by the corporate history of the global wind power industry in 2012-2016, are consolidating their financial and IP resources by means of partnerships (for example, Adwen) and M&A (for example, Acciona-Nordex, Siemens-Gamesa).

The end goal of such an association is to provide engineering and technological differentiation in global markets for RES generating facilities as the basis for competitiveness in this sector.

In the opinion of the Managing Director of ReGenPowertech Private Limited Madhusudan Khemka, a product manufactured in Russia has a good chance of taking a large market share in developing countries. European manufacturers offer high-tech wind power plants at rather high prices. Chinese companies offer technologies for local markets also, but there are some difficulties with certification. Therefore, Russian wind power plants that take advantage of European experience at acceptable prices may become a good solution for developing countries.

The discussion showed that the main stakeholders in the Russian wind power industry market have been identified and are transitioning into an active stage of their own industrial production of wind power plants. Some long-term partnerships have been organized in the industry and non-profile investors are increasingly numerous. Cooperation with state authorities is underway in the area of requirements for production localization and wind farm construction. The gradual decrease in governmental support will facilitate the creation of a competitive environment, which, in turn, will allow wind power plants manufactured in Russia to rank highly in the global market of the wind power industry.