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Russia Holding Largest Renewable Energy Auction

Russia Holding Largest Renewable Energy AuctionRussia Holding Largest Renewable Energy Auction

Russia is pressing ahead with its biggest-ever auction for renewable energy, seeking to award contracts to purchase 1.9 gigawatts of clean electricity as well as attracting foreign investment to support jobs at home.

The government tender starting Monday has attracted the interest of Fortum Oyj, Finland’s largest energy company, which is prequalified to participate in the auction. Enel SpA of Italy may also participate, World Oil reported.

“Russia has had a long history of leadership in the energy sector and now has the opportunity to extend that leadership into renewable energy,” said Adnan Amin, director-general of the International Renewable Energy Agency.

Developing the country’s renewable resources, he said, “can significantly contribute to the country’s economic objectives such as economic growth and employment.”

The Russian government enacted strict local-content rules in 2012 and 2014 in a bid to stimulate job creation. Clean energy plants are not allowed to be installed unless a certain percent of the equipment is made locally, and that portion rises every year. Since no company makes wind turbines in Russia, this has hampered the industry. In 2017, the portion is fixed at 40%.

“You bid to build a project of a certain capacity in a given year,” said Victoria Cuming, head of policy analysis in Europe, the Middle East and Africa at Bloomberg New Energy Finance. “This year it’s for 2018 to 2021. It takes time to build manufacturing capacity so even with a 2021 project, you’d be hoping that someone makes a move into Russia very soon.”

The auction is from May 29 to June 9, in two stages, according to Cuming.

State-owned nuclear company Rosatom Corp. recently said it will retool existing factories to make turbines, marking a turning point for the industry. It sought to establish partnerships with some of the leading European manufacturers.

Other oil-producing nations such as Saudi Arabia and the United Arab Emirates are also making moves into renewable energy. Both countries burn vast amounts of their oil and natural gas domestically for power generation, with Saudi Arabia consuming about 1 million barrels a day to keep its lights and air conditioners on.

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