Russia’s government plans to hold its next wind power tender in December 2020, but there are question marks regarding projects from past wind auctions due to economic upheavals resulting from the Covid-19 pandemic, said Eugeni Nikolaev, director of developer Russian Wind and board member of the World Wind Energy Association (WWEA).

The oil & gas-rich country in 2013 had started to hold annual renewable tenders to reach 5.4GW in capacity by 2024 (3.35GW of which will come from wind power), which is slated to represent 4.5% of its energy generation.

But tenders were built around cost per capacity instead of the cost for power produced, with winning prices at around €1m ($1.1m) per installed megawatt. Plunging oil prices due to lower demand as a result of the coronavirus crisis are likely to prompt a devaluation of the Russian ruble of 20-25%, as has happened in earlier crises, Nikolaev said.

That will also result in pushing down the returns of wind farms in dollars or euros, and be a problem as most wind power projects in Russia are backed by foreign investors such as Italy’s Enel or Finland’s Fortum.

Those have links to their domestic economies back home, which also are hit by the Covid-19 outbreak, in particular Enel, Nikolaev reckons.

“There are question marks if they will continue [their wind power projects in Russia],” he said at a WWEA webinar. “It is early to say how this will develop after coronavirus. The economy is linked to the ruble, but much of the equipment is linked to dollar or euro values.”