Sergey Kondratiev, Principal Director on Economic Studies at the Institute for Energy and Finance, commented to the Kommersant newspaper on the wind farm construction in the Far East.
En+, as part of a joint company with China Energy, plans to begin construction of an export 1 GW wind farm in the Far East next year. En+ expects that up to 70% of the funds for construction will be project financing from Chinese banks. So far, numerous proposed new power generation projects in Russia for export to China have not been implemented due to the lack of payback mechanisms. The key problem remained the low price at which China is ready to import electricity, but En+ assures that they will be able to achieve the conclusion of long-term contracts.
As Sergey Kondratiev notes, the En+ project differs from the previously announced ones, since most Russian investors offered to build coal-fired thermal power plants, and not to develop renewable energy sources.
According to his calculations, the growth rates of electricity demand in the Chinese regions bordering Russia in recent years have been lower than the national average (3.8% in Heilongjiang for 2016-2021 against 6.6% for the country as a whole), but in these regions the share of coal generation is high, which in the coming years will be decommissioned as part of the decarbonization program economy.
The cost of electricity for high-voltage consumers in Heilongjiang is 740 yuan per MWh ($101 per MWh), which is significantly higher than the cost of electricity in the central and southern regions. The average cost of electricity imported from Russia in July was about $43 per MWh.
"If the Chinese partners are not ready for a significant price increase and will focus on the range of $40-50 per MWh, En+ will have to pay special attention to cost control," the analyst believes.
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