Leningrad Wind Power Plant Feasibility Study

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Leningrad Wind Power Plant Feasibility Study Grant Number: GH2828096 Leningrad Wind Power Plant Feasibility Study ZAO Lidesm ABB Inc. Kondratyevsky pr., 15 A, office 22 940 Main Campus Drive 195197 St.-Petersburg, Russia Raleigh, North Carolina 27606-5200 USA March 31, 2003 Disclaimer: This report was funded by the U.S. Trade and Development Agency (USTDA), a foreign assistance agency of the U.S. Government. The opinions, findings, conclusions or recommendations expressed in this document are those of the author(s) and do not necessarily represent the official position or policies of USTDA. 1000 Wilson Boulevard • Suite 1600, Arlington, VA 22209-3901 Phone 703-875-4357 • FAX 703-875-4009 • Web site: www.tda.gov • email: [email protected] The U.S. Trade and Development Agency The U.S. Trade and Development Agency (USTDA) advances economic development and U.S. commercial interests in developing and middle income countries. The agency funds various forms of technical assistance, feasibility studies, training, orientation visits and business workshops that support the development of a modern infrastructure and a fir and open trading environment. USTDA’s strategic use of foreign assistance funds to support sound investment policy and decision-making in host countries creates an enabling environment for trade, investment and sustainable economic development. Operating at the nexus of foreign policy and commerce, USTDA is uniquely positioned to work with U.S. firms and host countries in achieving the agency’s trade and development goals. In carrying out its mission, USTDA gives emphasis to economic sectors that may benefit from U.S. exports of goods and services. 1000 Wilson Boulevard • Suite 1600, Arlington, VA 22209-3901 Phone 703-875-4357 • FAX 703-875-4009 • Web site: www.tda.gov • email: [email protected] Leningrad Wind Power Plant Trade and Development Agency Final Report From ABB Inc. 31 March 2003 TABLE OF CONTENTS Estimated Page 1. Introduction................................................................................................................................1 2. Project Description.....................................................................................................................3 3. Participants.................................................................................................................................5 3.1. Contractor ...........................................................................................................................5 3.2. Grantee................................................................................................................................5 3.3. Changes in Participant Roles ..............................................................................................6 3.4. American Team...................................................................................................................7 3.5. Russian Subcontractors.......................................................................................................8 4. Outcomes ...................................................................................................................................9 5. Accomplishments on Study Tasks...........................................................................................11 Task 1 – Wind Resource Assessment ......................................................................................11 Task 2 – Plant Preliminary Design ..........................................................................................11 Task 3 – Electrical Systems Design.........................................................................................12 Task 4 – Market Survey and Research ....................................................................................12 - Market Survey and Outreach .....................................................................12 - Seminar on Wind Power and the Leningrad Wind Power Project.............13 - Financing Strategy and Contacts ...............................................................13 - Customer Acquisition ................................................................................14 Task 5 – Economic Analysis....................................................................................................14 Task 6 – Environmental Analysis............................................................................................15 6. Changing Russian Market for Wind Energy ...........................................................................17 6.1 Project Background and Key Issues .................................................................................17 6.2 Leningrad Oblast Support .................................................................................................17 6.3 Federal Support for Wind Power and the Project .............................................................21 6.4 International Support .......................................................................................................22 6.5 Regulatory and Institutional Issues ...................................................................................23 6.6 Environmental Issues ........................................................................................................24 7. Business Strategy for the Project and for Long-Term Development ......................................27 8. Conclusions..............................................................................................................................31 APPENDIX - I 1.1 Project Background Project Data Sheet Participating Companies and Key Individuals Identified in TDA-ABB Contract 1.2 Support and Endorsement Letters for the Project GE Capital Financing Letter dated 6 February 2003 Leningrad Wind Power Plant Trade and Development Agency Final Report From ABB Inc. 31 March 2003 Letter from the Russian Federation Energy Commissioner, December 2002 Letter from the Leningrad Oblast Government, March 2003 1.3. Market Survey and Power Customer Acquisition Marketing Sample Letter Sample Questionnaire Sample Results from Survey of Large Industrial Energy Consumers Issues Raised by Companies Included in the Survey Project Implementation Process Plan 1.4. Seminar on Wind Power held 22 May 2002 Agenda and Key Speakers List of Seminar Attendees Presentation Material of American Company Participants 1.5. Economic Analysis and Project Proformas Wind Resource Assessment Power Plant Business Economic Model Assumptions Used in the Preliminary Financial Analysis Preliminary Results of Analysis 1.6. Environmental Assessment Summary of New Russian Environmental Laws and Regulations Procedures for Environmental Assessment for Wind Power Plant Projects Terms of Reference for Conducting and Environmental Assessment 1.7. Technical Paper on “Operational Constraints and Economic Benefits of Wind-Hydro Integration in the United States and Russia,” to be presented at the European Wind Energy Conference in Madrid, Spain, 16-19 June 2003. Leningrad Wind Power Plant Trade and Development Agency Final Report From ABB Inc. 31 March 2003 APPENDIX - II: [Proprietary and Confidential] 2.1. Preliminary Project Siting Report 2.2. Wind Resource Assessment and Results 2.3. Weather Service Wind Data Report 2.4. Detailed Site Layout (3 Sites) 2.5. Preliminary Wind Speed Analysis, Preliminary Micro-Siting and Preliminary Energy Estimates 2.6. Assumptions Matrix and Sample Economic Model Results and Cash Flow Analysis 2.7. Preliminary Project Proformas 2.8. Letters of Intent on Power Purchase Agreement 2.9. Oblast Tax Credit Legislation and Supporting Rationale 2.10. International Energy Academy Grid Connection Report 2.11. Technical University Ornithological Report Leningrad Wind Power Plant Trade and Development Agency Final Report From ABB Inc. 31 March 2003 Leningrad Wind Power Plant Trade and Development Agency Final Report From ABB Inc. 31 March 2003 Leningrad Wind Power Plant Feasibility Study 1. INTRODUCTION ABB is very pleased to present this Feasibility Study Report to TDA on a proposed utility scale wind power plant in the Leningrad Region of Russia. The Study has been completed within the time frame laid out in the initial proposal to TDA and with all the various activities as delineated in the proposed Terms of Reference. The grant was provided by TDA in November 2001. At that time, planning sessions of all the participants were held in St. Petersburg. All steps necessary on the American and Russian sides to undertake the various aspects of the Feasibility Study were laid out, agreed upon, and put in place within two months. Data collection and major activities of various kinds began in February of 2002. All aspects of the Feasibility Study were completed by March 2003. Wind energy is the fastest growing energy source. By the end of 2002, the installed capacity of wind turbines worldwide totaled over 31,000 megawatts (MW) and an additional 28% was added in 2002. However, nearly 90% of these installations are in Europe and the United States. Wind power plants installed in Russia total less than 10 MW despite the vast wind resources in many parts of the country. Before beginning this project Feasibility Study it was determined that Russia, in particular the Leningrad Oblast, has tremendous wind resources that are suitable for energy production. Renewable energy resources, including wind, have been assessed and mapped throughout the Russian Federation.1 Wind resources in Russia are shown in Figure 1. Sites are considered potentially suitable for wind
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