Financing constraints impede Russia and Norway?s wind potential

The meeting was the culmination of a forum by Bellona Foundation, which discussed the development of wind energy in northwest Russia and its possible hurdles and opportunities.

Both northwest Russia and northern Norway hold great potential for wind energy development, but these locations are far-flung areas, making it costly to transfer the energy generated by wind farms to urban customers.

But the main problem for both countries is that wind energy remains unprofitable because of limited financing mechanisms. For example, the completion of the planned 200-megawatt wind farm in the Teriberka district in Russia depends on the government’s financial support, said Paul Logchies, general director of the Dutch Wind Life Energy.

A federal financial mechanism will be launched to help the wind farm pay for itself within five years to six years. This mechanism is founded on compensation for specified energy production and not feed-in tariffs.

“Under this mechanism, the price of electricity from renewable sources will be eight cents per kilowatt. This is two times more than Norway can receive by the green certificate program,” explained Mr. Logchies.

Meanwhile, the Norwegian government has not yet developed a plan to take full advantage of the country’s wind energy potential. According to Solveigh Steinmo of Sweco, which provides engineering consultation for renewable energy projects, the region of Finnmark can host numerous wind power facilities, but is constrained due to limited financing and transmission opportunities.

Norway generates 99.5 percent of its energy consumption from hydroelectricity, while its wind energy output is only at 500 MW. But its future wind energy facilities show more promise than Russia, with two new wind farms in the pipeline capable of generating a total of 2,500 MW.