The start of production of turbine components in Russia by Danish wind OEM Vestas presents growth opportunities for the industry, Fitch Solutions (formerly BMI) says in a note, but maintains a bearish outlook for non-hydro renewables growth in the country due to false starts after project auctions.

Vestas in May opened a nacelle assembly line in Nizhny Novgorod, Russia, as it gears up to supply a pipeline that after renewable energy tenders this year has risen to 1.8GW.

Russia from next year on demands a localisation of 65%, a very high share for a country whose wind industry is only just starting up.

“With Danish wind turbine manufacturer Vestas starting production of turbine components in Russia in May 2018, growth opportunities for the Russian wind power sector will nonetheless increase as domestic manufacturing helps to reduce the obstacle of local content requirements,” Fitch Solutions writes.

“On August 1st, it was reported that Vestas had started delivering domestically produced parts for a 50MW project in the Ulyanovsk region. We believe this highlights the increased potential for wind projects in the country.”

Russian wind energy association RAWI last week said that Vestas has started to supply first components of 14 V126-3.6MW turbines for the 50MW project in Ulyanovsk from the Nizhny Novgorod manufacturing site. The OEM last year had confirmed a first 50MW order out of a then 1GW framework agreement with Finnish utility Fortum and its Russian partner Rusnano.

Vestas also plans to start production of blades later this year at the 'Aerostar' plant in Ulyanovsk, RAWI added, while towers produced in Spain have already been delivered to the wind farm site.

While wind will be the sector’s outperformer, biomass is expected to remain the dominant source of non-hydropower renewables generation in Russia, the analysts say, adding they expect the contribution of wind power, and non-hydro renewables in general, to still make up less than 1% of the country’s total power generation by 2027.

Fitch Solutions says delays and false starts to projects from earlier auctions in 2013, 2014 and 2015 mean that renewables developments in Russia still face the prospect of being cancelled or suspended, whether from the government or developer's side.

Wind

Local production gives Russia wind boost: Fitch Solutions