Fortum and Wind Energy Development Fund (a joint investment fund established by PAO Fortum and RUSNANO Group on a parity basis) is actively developing cooperation with major Russian and international customers that are willing to purchase CO2-free electricity. The demand for green energy is driven by the upcoming overhaul of environmental standards and ambitious environmental, social and governance targets that the companies commit to. Thanks to its own portfolio of projects, as well as projects implemented jointly with RUSNANO, Fortum is ready to offer the tools for the decarbonisation of businesses.
The number of companies in Russia striving to reduce their carbon footprint and wanting to switch to environmentally benign energy sources is growing every year. In 2018 Fortum and Unilever signed an agreement on the development of renewable energy sources in Russia, and Ulyanovsk Wind Farm 1 started supplying clean energy to Unilever sites in Tula, Yekaterinburg, and St. Petersburg. A similar arrangement with the multinational brewing corporation Anheuser-Busch InBev was launched in 2019. And in 2020, green energy generated by the wind farms of the Wind Energy Development Fund in the Rostov region began powering Sberbank’s offices in Ulyanovsk and the French company Air Liquide’s production sites in Tatarstan.
“We are happy to offer our customers a tool that enables them to mitigate their environmental impact and to decarbonise and improve their environmental performance,” says Dmitriy Borovikov, Vice President, Strategy, Portfolio Management and Trading, PAO Fortum.
The company’s partners consider this collaboration an important step in achieving their environmental and sustainability targets. Former Unilever CEO Paul Polman commented, “This will definitely contribute to the achievement of Unilever’s ultimate goal of switching to only renewable energy in Russia and globally by 2030 and to 100% renewable electricity by 2020. We expect that other industries will follow our example, which will help to make renewable energy in Russia a truly advanced area.”
“Sber’s operations have always been guided by the principle of the preservation and rational consumption of resources. One of the priorities of our new strategy is to develop green initiatives, create products and services within the environmental agenda, and finance such projects. Signing the green energy supply agreement for our offices was a natural and logical step. I am sure that it is not the last step along the way,” said Stanislav Kuznetsov, Deputy Chairman of the Executive Board, Sberbank.
Towards a carbon-free economy
Climate change and global warming are among the most pressing challenges facing humanity. Joint effort is needed to solve the problem. The international community consensus on the need for global efforts is reflected in the Paris Agreement that aims to do everything possible to limit the global temperature increase to 1.5 degrees Celsius. This requires reducing greenhouse gases emissions everywhere.
Climate change and the development of green energy have already become the key environmental agenda issues in many countries. The pressure on emissions reduction is coming from all directions. Thus, governments are introducing tighter environmental standards that compel companies to decarbonise not only their own business, but also that of their trade partners. At the same time, industries are giving preference to the greenest counterparties, squeezing out the suppliers with lower ESG performance. Therefore, there is a growing need for the adoption of environmentally benign technologies and for meeting climate commitments – both from the states that are applying the new environmental standards and from businesses and individuals that are choosing environmentally responsible behaviour.
Driven by environmental responsibility, Fortum is continuously working to reduce the climate and environment impact of energy production. We also want to engage our customers and communities to join the change; we are happy to offer clean renewable wind and solar energy as a tool for reducing the carbon footprint.
Utilities, which account for about a half of greenhouse gas emissions, can make the biggest contribution to the decarbonisation of the Russian economy. Cooperation between green energy generators and leading companies is one measure to help Russian exporters adapt to the new global trends.
In this new era, where the world’s leading economies require their trade partners to comply with the highest environmental standards, the national RES industry must help customers reduce their carbon footprint.
Fortum is actively engaged in the development of renewable energy in Russia. In January 2018, the company commissioned Ulyanovsk Wind Power Plant 1, the first commercial-scale wind power plant in the country. Its installed capacity is 35 MW. Fortum’s generation portfolio also includes 35 MW of solar capacity.
Additionally, Fortum and Rusnano are implementing an extensive renewable energy development programme in Russia. In 2017 and 2018, the Wind Energy Development Fund, established by the two companies on a parity basis, obtained the right to build almost 1,823 MW of wind generation. The wind farms are expected to be commissioned before 2024. The Fund’s portfolio accounts for 50% of the total volume of wind power plants commissioning in Russia.
Today the portfolio of the Fund’s completed projects in the Kalmykia, Rostov and Ulyanovsk regions includes four wind farms with a total capacity of 600 MW. The Fund’s portfolio includes 495 MW of projects under construction (50 MW in the Rostov region, 340 MW in the Astrakhan region, and 105 MW in the Volgograd region).
In 2018 and 2019 PAO Fortum won the right to build 115.6 MW of solar generation capacity, following the results of a competitive selection of investment projects in renewable energy sources. The solar power plants are expected to be commissioned in 2021-2022. Fortum selected Hevel Group, Russia’s largest solar equipment manufacturer, as the technology partner for the implementation of its solar energy projects.
The extensive RES portfolio will allow Fortum’s partners to achieve decarbonisation of even large production assets. Therefore, we at Fortum hope that our wind and solar energy supports the implementation of sustainability strategies of also other major brands in Russia, giving the renewable energy sector an additional market-based incentive to build new capacity.