Wind power operators in Russia will face huge fines for missing location and export targets under a recently approved state support program, according to Windpower Monthly. The new scheme of projects commissioned in 2025-2035 will involve tenders scheduled for September 2021. The government will allocate 177 million rubles ($ 2.3 million) to support around 3 gigawatts of new capacity. However, industry groups consider this level of support insufficient and warn that it could lead to job losses in the Russian wind sector.

Under the revised tendering system, the old method of competitive bidding based on investment costs is replaced by a new method based on price per megawatt hour of production. When bidding for power contracts, developers must specify the amount of output from their wind farm over the 15-year contract term. If actual production falls below this projected amount in the first year of the deal, they can be fined for the duration of the deal with the Russian state.

According to the Russian Wind Energy Industry Association, developers can lose at least 30% of total payments, while maximum losses can reach 80% of payments for the entire period. In addition, operators of wind farms will be subject to additional fines if their production deviates from a production plan on the “day-ahead†market.

In addition, developers will have to face a strict sanctions regime from the construction phase. The 85% fine for failing to meet localization targets could cost them up to 75% of state production payments. Wind energy operators can also be subject to fines for failing to meet export targets. Since all of these fines will be cumulative, operators can end up paying all of their production payments in fines if they fail to meet location, export and production targets.

At the same time, a recent study by the Global Wind Energy Council found that the expansion of the wind industry can create 3.3 million jobs worldwide over the next five years, mainly in the markets of the fast growing wind power, including China, USA, India, Germany, UK, Brazil, France, Sweden, Spain, South Africa and Taiwan. In addition to direct jobs in onshore and offshore wind projects, the figure includes the entire industry value chain: installation, manufacturing, project planning and development, operation and maintenance, and decommissioning. According to the International Renewable Energy Agency, the industry has already generated some 1.2 million jobs to date.

By Anna Litvina