Russia’s industry and trade ministry is considering banning foreign-led companies from designing and installing renewable energy plants, the Vedomosti business daily said, citing two unnamed participants in a recent meeting on the issue and a ministry official.
The proposal - if put into practice - could lead to a rise in construction costs as Russian companies leading future developments would probably just sub-contract them to foreign partners again, the newspaper said, citing Aleksey Khokhlov, head of the power engineering department at the energy center of the Skolkovo Moscow School of Management.
It is unclear, however, what chances the proposal has to become law.
“For the time being these are just discussions and no final decision has been made,” an industry source told Recharge.
Igor Bryzgunov, the head of the Russian wind energy federation RAWI, thinks the proposal has little chance to become law.
"This is just one of the proposals from one of the ministries during the discussion among market participants," he told Recharge.
"Legally, such a requirement is illegal because it limits competition and prices will rise due to such an act, which contradicts the goal of supporting renewable energy sources in Russia."
Most wind and solar projects in Russia are currently being developed by foreign companies, their Russian subsidiaries, or joint ventures including experienced foreign renewables developers, such as Finland’s Fortum. These companies usually also plan to use foreign technologies like Vestas or Siemens Gamesa wind turbines.
Russia in 2013 had started to hold annual tenders to reach 5.4GW of renewable energy capacity by 2024, of which at least 3.35GW will come from wind power.
The industry is currently awaiting a new strategy by the government for renewable energy for the post-2024 period, which according to market observers could include a target of at least 7.5GW in additional renewables capacity by 2035.
Due to strict local content rules, Western companies such as Vestas and Siemens Gamesa have already invested in local production facilities in Russia.
Such spending could be less profitable if foreign companies were to be banned from leading renewable energy developments.
UPDATED with comment by Russian wind energy federation RAWI
