Russia 'set for 1.5GW of solar'

The Kremlin passed a law to spur renewables last year

The Kremlin passed a law to spur renewables last year

Russia could have 1.5GW of PV in place by 2020, said the CEO of a development company part-owned by Russian conglomerate Renova that plans to grab a 30% share of the utility-scale market there.

Igor Akhmerov, president of Avelar Energy Group – a joint venture (JV) of Renova and Rusnavo, Russia's state-owned fund for innovation – also revealed plans to spur local production of PV equipment.

The growth will be underpinned by the Russian government's planned run of renewables tenders, claimed Akhmerov.

115MW will be awarded in 2015 and 149MW in 2016, reaching by 2020 the 1.5GW target, with a 14% return for projects selected in the 2013-2014 tenders and 12% return thereafter, according to the Avelar boss.

"Once a company is awarded the bid, the compensation will come in the form of capacity payments, and the Russian government guarantees a 14% return on the actual investment,'' said Akhmerov.

According to Akhmerov, the capacity payments compensation system has been selected because it is familiar to banks, making it easier to obtain financing, as the same system is used for both coal and gas project finance.

However, much like the wind energy market, PV has a local content requirement of 50% until 2015 and 70% from 2016. 

The local-content requirement has been introduced ''specifically to encourage local production of domestic cells,'' said Akhmev. 

Although PV modules are currently produced outside of Russia, he claims that Chinese manufacturers are already coming into the country and setting up shop.

Renova Group, in coordination with Avelar is currently building in Novocheboksarsk, Russia, a production facility that will produce modules for the Russian and international markets using thin-film technology through its subsidiary Hevel Solar.

A penalty will also be enforced for not completing on time a project, of 5% that will escalate every month that energy is not delivered to the grid.

Avelar has been awarded 99MW of projects in the 2013 bidding round and expects to win another 190MW in the June 2014 second round.

Patrick Willems, project manager for the IFC's Russia Renewable Energy Programme – part of the World Bank Group – told Recharge recently that he is "optimistic'' about the country's PV market, although ''the IFC does not favour local content ever, as it distorts the market leading to higher prices".

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