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EastRussia Bulletin: Friday Exclusive - Electricity
Traditional exclusive industry analytical review of the EastRussia bulletin - energy of the Far East - results, generation volumes, infrastructure development plans
In the Far Eastern Federal District, new generation facilities are being built, which, among other things, should provide new industrial facilities with electricity. In addition, it is planned to carry out large-scale work as part of the electrification of the Eastern range of "Russian Railways", which is associated with work to expand the capacity of railways. The government has decided to gradually reduce the premiums for consumers in the price zones of the energy market used to reduce tariffs in the Far Eastern regions. However, this process will continue until 2028, which causes discontent among industrial energy consumers. In the Far Eastern regions, projects are being implemented to modernize energy capacities and it is planned to develop individual projects related to the use of alternative energy sources.
The construction of large energy facilities in the Far East is associated with the creation of new industrial facilities, including in the field of mining and the development of railway infrastructure. At the same time, in some cases, there is competition between various projects. Thus, in the issue of energy supply to the Baimsky mining and processing plant in Chukotka AO (KAZ Minerals), priority may be given to the Rosatom project, and not to the floating LNG power plant of PAO NOVATEK, as previously assumed. Rosatom's proposal provides for the deployment of five upgraded floating power units (MPEB) of project 208870 with the RITM-200 reactor at Nagleingyn Cape.
NOVATEK's project included the installation of a 356 MW LNG power plant in the port near the Nagleingyn Cape, the cost of which was estimated at 38 billion rubles. At the same time, NOVATEK offered a tariff of 6,36 rubles per kWh, as well as the possibility of supplying LNG for KAZ Minerals quarry equipment. At the same time, the LNG plant project was criticized for the low share of Russian equipment used, while Rosatom proposes to build floating power units in the Russian Federation - at the Baltic plant, where the Chukotka FNPP Akademik Lomonosov was built. Nevertheless, the Rosatom project is distinguished by a longer implementation period - the first two MPEBs of 100 MW each are expected to be installed in early 2027, and two more - in the fourth quarter of 2028, while the launch of the GOK is scheduled for 2026. At the same time, the state corporation believes that at the first stage, the needs of the enterprise can be met by a floating nuclear power plant. At the same time, the Baltiyskiy Zavod is experiencing a high workload, delays in commissioning on a number of projects, which allows us to assume even longer terms for the Chukchi project. It should be noted that the construction of the floating nuclear power plant was distinguished by a long period - the floating power unit had been built for more than ten years (work began in 2008). The volume of investments in the project to create the MPEB is estimated at 133,8 billion rubles.
Rosatom's proposal includes signing a take-or-pay contract with KAZ Minerals for 40 years, with a tariff of 6 rubles per kWh plus 0,44 rubles per transmission (in 2019 prices). The main advantage of their project at Rosatom is that the use of a nuclear power source allows fixing the cost of electricity for the entire period of operation of the mine, regardless of market conditions, which is important for an investor. The share of fuel in the cost of the final tariff in the nuclear power industry is less than 10%. In addition, for the cyclical replacement of fuel and repairs, the project uses a backup modernized floating power unit, which can also be used as replacement capacities for the floating nuclear power plant during the overhaul. Rosatom expects to independently manage the MPEB (the LNG plant was supposed to be transferred to RusHydro's management), due to which the project may need to subsidize the interest rate for 20 years.
It should be noted that in November last year, the government approved a scheme for financing the first stage of construction of a high-voltage power transmission line with a length of over 490 km to a new floating nuclear thermal power plant (FNPP) and reconstruction of substations to supply the Chaun-Bilibino hub in Chukotka Autonomous Okrug. It is planned to invest 24,7 billion rubles in the project, the completion of construction is scheduled for 2023. The work will be carried out by PJSC RusHydro, while the bulk of the costs will be borne by the federal budget - 10 billion rubles, in addition, 3 billion rubles are expected to be allocated from the government reserve fund ... The funds were received by RusHydro through an additional issue, which ended in September 2020. The holding should additionally raise loan funds in the amount of 9,13 billion rubles, and an additional 2,6 billion rubles will be allocated from the budget to cover the costs associated with repayment of the loan and to pay interest ...
In Chukotka, the need for new generation is due to the closure of the 48 MW Bilibino NPP (operating since 1974). Its capacity should be replaced by a 70 MW floating nuclear power plant in the port of Pevek, which has been supplying energy to the grid since the end of 2019, but so far only supplies Pevek, not operating at full capacity. Both nuclear power plants will continue to operate until the transmission lines are commissioned. According to the calculations of Rosenergoatom (part of Rosatom), the cost of the capacity of the Bilibino NPP in the first half of 2021 will amount to 11,36 million rubles per 1 MW per month, in the second half of the year - 13,35 million rubles, while the FNPP tariff in the current year is 7,11 million rubles per 1 MW per month.
Industry experts are concerned about the use of the RusHydro additional issue mechanism to obtain financing, which threatens with write-offs upon the implementation of the project and a decrease in the dividend base. Against this background, it is possible that a different scheme could be determined to finance the second stage of the Chukotka project - for example, an increase in the tariff with the inclusion of costs in the mechanism for equalizing tariffs in the Far East, the provision of a subsidy for raising debt or the use of an additional issue, subject to the transfer of the project to another company ( in particular, the Far Eastern Energy Management Company controlled by Rosimushchestvo).
Meanwhile, in December, the Far Eastern Distribution Grid Company (DRSK, part of RusHydro) completed the construction of all six substations and two power transmission lines to supply power to the Power of Siberia gas trunkline. Thus, the latter completed the construction of the substation KS-7 110 kV in the Amur region, which provides connection to the unified power system of the compressor station No. 7 "Sivakinskaya". The region also built two 110 kV power transmission lines with a total length of 18 km. Recall that the project to provide power to Power of Siberia has been implemented by DRSK since 2017 - in particular, within the framework of it, three substations were built in Yakutia (220 kV Nagornaya, 220 kV Amginskaya and 110 kV Nimnyrskaya) and three substations in the Amur Region (except for 110 kV Sivakinskaya, also 220 kV Zeiskaya and 35 kV Skovorodinskaya).
In the Irkutsk Region, the Irkutsk Oil Company (INK) in December 2020 commissioned the first stage of the 220 kV Polymer substation to supply power to the Ust-Kutsk Gas Processing Plant and the Irkutsk Polymer Plant. The first stage assumes the delivery of up to 30 MW to the grid, and after the completion of the second stage and the commissioning of new gas processing facilities, the volume of consumption should increase to 140-150 MW.
At the end of the year, FGC UES connected Gazprom Helium Service to the Unified National Power Grid (a resident of the Primorskaya ASEZ Nadezhdinskaya), which is building a logistics center for servicing helium containers from the Amur Gas Processing Plant for their further export (the planned throughput capacity exceeds 4,5 thousand technological operations per year). The connection capacity was 3,6 MW. Power supply is provided from the new 220 kV substation "Prompark" (commissioned in 2019), which is designed to connect residents of the ASEZ "Nadezhdinskaya". Also, about 30 km of power transmission lines were erected, and the nodal power center - the 500 kV Vladivostok substation was reconstructed. The volume of investments in the project amounted to more than 2 billion rubles.
Meanwhile, in the Magadan Region, at the end of last year, PJSC Polyus put into operation the Ust-Omchug - Omchak Novaya power transmission line with a capacity of 80 MW and a length of more than 120 km, designed to supply power to the Natalka GOK (Tenkinsky District), which was launched in 2017.
In Transbaikalia, the Udokan Copper Company (USM Holdings A. Usmanova) is carrying out commissioning work on the second high-voltage transmission line (HVL) to the Udokan mining and metallurgical plant under construction at the Udokan copper deposit (Kalarsky district). The work should be completed in April, and the commissioning of the overhead line from the substation in the village of Novaya Chara to the Udokan MMC site is scheduled for 2021. Recall that the first stage of creating an energy infrastructure for an industrial facility (construction of a substation and the first line of a 220 kV overhead line) has been completed at the end of 2019
Work continues on the electrification of the Eastern range of Russian Railways to increase the traffic of goods to the Far Eastern ports. To ensure the volume of cargoes planned for export in 2025 (180 million tons), the construction of additional volumes of generation and power grids is required. In November, FGC UES, PJSC modernized substations in five Far Eastern regions, including to create conditions for increasing the throughput capacity of the Baikal-Amur and Trans-Siberian mainlines. The modernization was carried out in 18 power supply centers with a voltage of 500-220 kV in the south of Yakutia, in the Amur Region, Jewish Autonomous Region, Primorsky and Khabarovsk Territories. Modern high-voltage bushings were installed at the substations (89 in total). The volume of investments in the work has exceeded 210 million rubles. The largest amount of new equipment was installed in the Amur region - at the 220 kV substations “Dipkun”, “Khorogochi”, “Tutaul”, “Fevralsk” and “Belogorsk”.
At the same time, the energy supply of the railway infrastructure in the eastern direction is becoming the subject of controversy. At the end of last year, the Russian Union of Industrialists and Entrepreneurs (RSPP) expressed concerns that consumers of the price zones of the wholesale energy market would be obliged to compensate for the costs of building Far Eastern power plants, including the creation of generation for the Eastern landfill. The head of the Russian Union of Industrialists and Entrepreneurs A. Shokhin sent the corresponding letter to the State Duma Committee on Energy. The Russian Union of Industrialists and Entrepreneurs saw risks in the current version of the draft law on the mechanism for supporting the energy sector in the Far Eastern Federal District (it was adopted in the first reading in December). The proposed amendments to the Law "On Electricity" provide an opportunity to introduce new surcharges to the power price for the modernization and construction of TPPs in non-price zones, which include the Far East. The return of a significant part of the costs for the investor can be provided due to increased payments in the first and second price zones (the European part of the Russian Federation, the Urals and Siberia).
At the same time, the level of investors' profitability has not been determined. The Ministry of Energy was in favor of establishing a payback period of 15 years and a base rate of return of 12,5% (for price zones - 14%). Meanwhile, RusHydro insisted on adopting a base rate of return of 14%, hoping to modernize about 1,4 GW for 171,2 billion rubles (to build power units at Khabarovskaya CHPP-4, Yakutskaya TPP-2, Vladivostokskaya CHPP-2 and Artemovskaya CHPP- 2).
The RUIE is also concerned about the fact that the draft law does not contain a specific list of generation facilities, in connection with which, in the future, facilities for supplying power to federal infrastructure projects may be referred to them. So, for the electrification of BAM and Transsib, it was proposed to expand the Neryungrinskaya GRES in Yakutia and build a TPP in Nakhodka (Primorsky Krai) and Sovetskaya Gavan (Khabarovsk Krai), as well as a 456 MW TPP in Peledue in the north of Irkutsk Oblast (second price zone). The cost of these works was estimated at 200-250 billion rubles.
Nevertheless, the updated draft of the external power supply scheme of the Eastern landfill, approved by the government at the end of the year, assumes the preservation of plans for the construction of generation in the Bodaibo district (TPP "Peleduy") of the Irkutsk region and the expansion of the coal-fired Neryungrinskaya GRES "RusHydro" (for two power units of 215 MW each) , but the refusal to create new capacities in Sovetskaya Gavan and Nakhodka due to funding problems. The new scheme provides for the modernization of the Primorskaya GRES SUEK in Luchegorsk (with the preservation of the installed capacity, but with an increase in the power utilization factor) and the expansion by 2026 of the Partizanskaya GRES (200 MW, PJSC RusHydro) with an increase in the installed capacity by 280 MW, and also construction of a new power transmission line 220 kV Komsomolsk - Selikhino - Vanino in the Khabarovsk Territory. As a result, the changes introduced led to a decrease in the total capacity of the planned generation from 1,4 to 1,116 GW and a reduction in the preliminary volume of capital expenditures from 305 to 266 billion rubles. As for the investor for the construction of the Peleduy TPP, it is supposed to be determined based on the results of a technologically neutral tender, which provides for the possibility of construction on any energy source. It is tentatively scheduled for 2021. It is known that En + (Telmamskaya HPP on the Mamakan River with a capacity of 450 MW), SUEK (coal TPP), Inter RAO and Gazprom Energoholding (gas TPP ). The Ministry of Energy has not yet named the specific timing of the tender, and has not determined its rules.
It should be noted that the cost of the construction of the second stage of the Partizanskaya GRES is preliminary estimated at 30-35 billion rubles, the construction of the third branch of the Komsomolskaya - Selikhino - Vanino power transmission line - at 10 billion rubles, and the modernization of the Primorskaya GRES - at 20-25 billion rubles. RusHydro is ready to build the second stage of the Partizanskaya GRES, subject to the definition and guarantee of a mechanism for return on investment.
Meanwhile, RusHydro pointed out that fuel in the tariffs in the Far Eastern Federal District was accounted for according to the indices of the Ministry of Economic Development, and not at the actual cost, which led to significant losses of the DGK (about 17 billion rubles over the past 11 years). In December, in this regard, a government decree was issued, introducing accounting for the deviation of the fuel cost from the planned value when setting the electricity tariff in the Far East.
At the end of last year, it was decided to keep unchanged the mechanism for reducing electricity tariffs in the Far Eastern Federal District in 2021, after which measures will be taken to gradually reduce subsidies - until 2028.The corresponding bill was introduced by the government to the State Duma in the fall, and was approved and entered into force at the end of last year. Maintaining tariffs this year should soften the transition to economically viable tariffs. While in 2021 the mechanism operates according to the previous rules (the price is about 5 rubles per 1 kW / h), from 2022 it is planned to gradually abandon subsidies at the expense of consumers in the wholesale zone of the energy market, due to which the tariffs of some consumers in the Far Eastern Federal District will increase , and in 2028 tariffs should reach an economically feasible level. At the same time, for budgetary organizations and enterprises of housing and communal services, an increase in tariffs is envisaged within five years, for enterprises of the energy and mining industry - within three years. The Ministry of Energy expects that the burden on consumers of the wholesale market as a result of phased measures will decrease by 17-18 billion rubles (within five years).
The gradual reduction of non-market markups was approved by the energy markets regulator Market Council, which sees an opportunity to improve energy efficiency. However, the government initiative is met with criticism in the Energy Consumer Community (which includes industrial enterprises). Consumers of the energy market price zones are concerned about the need to pay the premium in full for another year in the context of a crisis situation in the economy. In 2021, the total amount of the markup is estimated at 38-39 billion rubles, although a change in the subsidy mechanism could reduce the amount of the current markup within 20%. It should be noted that in 2020 consumers of the wholesale energy market paid 37,6 billion rubles, and in 2019 - 32,1 billion rubles.
Controversy was caused by the proposal of Deputy Prime Minister Yury Borisov to establish uniform tariffs for the transmission of electricity in adjacent subjects of the Federation. In particular, it was proposed to unite the tariff zones of Tuva and the Irkutsk region, where the country's lowest energy tariffs are observed, thanks to the Angarsk cascade of hydroelectric power plants (less than 1 ruble per 1 kW / h for rural areas). With the help of such a measure, it was proposed to accelerate the consolidation of the Rosseti power grid complex and to achieve the equalization of energy prices in the regions to the national average of 3,4 rubles per kW / h. In turn, the governor of the Irkutsk region I. Kobzev opposed this idea, calling it unacceptable. In the case of the unification of tariff zones, the energy tariff in Tuva will be reduced by 85%, and in the Irkutsk region - by 4%, primarily for large enterprises. The head of the region noted that the increase in tariffs will lead to a drop in revenues for the regional budget, and he called low tariffs a competitive advantage of the Irkutsk region.
In the regions, projects are being implemented to modernize existing energy facilities. Repair work is planned to be carried out at one of the largest thermal power plants in the Irkutsk region - CHPP-10, which supplies heat and electricity to Angarsk. The contract for the modernization of three power units of the CHPP was signed by En + Group with PJSC ZiO-Podolsk (Moscow Region, part of the machine-building division of Rosatom - JSC Atomenergomash). The cost of work carried out within the framework of the program for the modernization of capacities in the Russian energy sector (DPM-2) exceeds 1,1 billion rubles. The manufacture of equipment for the first power unit is scheduled for December 2021.
PJSC "FGC UES" at the end of last year completed the modernization of the largest energy center in Buryatia - the 220 kV "Rayonnaya" substation. New power equipment and relay protection and automation devices were installed on it. As a result, the facility's capacity was increased by 3 MVA - up to 544 MVA in order to improve the reliability of power supply in the winter time to the central and southern regions of the republic, including Ulan-Ude. 194 million rubles were invested in the project.
Also, FGC UES installed 458 new support-rod insulators designed to isolate and maintain live parts of electrical equipment at seven power facilities of 220-500 kV in the Far Eastern Federal District. The work carried out increased the reliability of power supply to consumers in the Amur Region, Primorsky Territory, southern regions of Yakutia, and also increased the stability of power transit between power systems. The largest volume of work fell on the Amur Region - 270 insulators were replaced in the region at 220 kV substations Arkhara (40 MVA), Klyuchevaya (50 MVA), Novokievka (50 MVA), Fevralskaya (176 MVA), which supply electricity to railway infrastructure and mining enterprises. In Primorye, 176 insulators were replaced at Primorskaya TPP (on an open 500 kV switchgear) and at the 220 kV Goreloe substation (317 MVA), which supplies energy to the eastern part of Primorye. In Yakutia, insulation was renewed at the 220 kV Khani (50 MVA) substation supplying the Baikal-Amur Mainline.
In the Far Eastern regions, projects in the field of alternative energy are also being implemented. At the end of last year, in the village of Tiksi, located beyond the Arctic Circle, in Yakutia (Bulunsky District), the RusHydro wind-diesel complex with a capacity of 3 kW was put into operation. It includes a 900 kW wind farm, a 900 kW diesel power plant and a 3 kW energy storage system (equipment manufactured by the Japanese Komaihaltec). The complex should generate over 000 million kWh of electricity per year, which will reduce fuel consumption by more than 1 tons per year, while crude oil can be used as fuel for diesel units, which is cheaper than diesel fuel. The volume of investments in the project amounted to 000 million rubles. By the end of this year, RusHydro intends to build new similar energy complexes in other Arctic regions of Yakutia - the villages of Tabalakh, Moma, Sasyr, Tebyuli and Kulun-Elbyut, in the city of Verkhoyansk.
In the Magadan Region, Polymetal continues to implement a project to build a solar power plant for the Omolonskaya ZRK - in February, the first solar panels were delivered to the industrial site of the Kubaka GOK (Severo-Evensky District). The launch of the facility is scheduled for the fourth quarter of this year.Meanwhile, the Eastern Mining Company (VGK) plans to create a 67,2 MW wind farm in the Uglegorsk District of the Sakhalin Region, investing 8,5 billion rubles in it. The complex is expected to be put into operation in 2023. The wind farm should meet the needs of the company's production facilities, in particular the Solntsevsky coal mine, the Shakhtersk coal seaport and the main conveyor.