March 11 (Bloomberg) -- OAO Lukoil may turn to Russia for future renewable energy projects as its units in Bulgaria and Romania are hurt by subsidy reductions.
The Russian energy company may start a pilot project for 10 megawatts of wind generation in Kaliningrad as early as next year if Russia reduces restrictions requiring equipment to be bought locally, Maxim Karnaukhov, first deputy general director of Lukoil-Ecoenergo, said in an interview.
“In Kaliningrad there is the opportunity to develop wind generation,” he said. “The region is isolated, and logistics for transit of traditional energy are difficult.”
Eastern European countries such as Romania and Bulgaria have been rolling back subsidies to limit the cost of renewable energy and curb consumer electricity bills. Both governments cut incentives for renewable energy projects last year following a surge in installations.
“The company has decided to halt long-term investments in renewables projects in eastern Europe,” Karnaukhov said. “Unfortunately, at the moment, the support mechanism for renewable energy in some countries is being reconsidered, which is ruining the investment climate.”
Lukoil expects to conclude a project financing agreement in May on two current Romanian projects.
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