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The only task is to develop the Far East

Sergey TOLSTOGUZOV, General Director of PJSC RAO ES of the East

The interest of the state in the development of the energy sector in the Far East is higher than ever - in the coming months a whole range of solutions can be adopted that will give the industry a powerful impetus for development. About the direction in which "RAO Energy Systems of the East" will develop as the company responsible for the light and heat in the region, Sergey Tolstoguzov, the general director of the Far Eastern energy holding, said.

The only task is to develop the Far East
- Sergei Nikolaevich, at the first Eastern Economic Forum, many initiatives were voiced to develop the Russian Far East. How will RAO ​​ES of the East, being an infrastructurally important company, answer the new tasks that the country's leadership poses to the region?

- The only task is to develop the Far East. Another thing is that the state must decide on the goals and ways of how to do it. For this, a strategy for the development of the region must be prepared, where these goals and paths will be decomposed to the level of specific sub-sectors. And RAO ES of the East should offer its solutions in response to the state's designation of priorities. Such decisions should be feasible both for the companies' economy and for the regional economy.

We do not work on our own, we do not have separate tasks from the region. We are not engaged in commercial projects aimed exclusively at making a profit. The purpose of our existence is to help the region develop.

- What new construction projects does the holding plan to launch in the coming years?

- The question is not what construction of "RAO ES of the East" wants to start. We are not a construction company, after all. As I said before, the state should first of all understand itself - what does it want to achieve from the energy sector in the Far East? Is it necessary to replace the capacity or just maintain the level that is now? Should we modernize old stations or replace them with a new generation? Will the demand grow as a result of the development of TORs and Vladivostok as a free port?

From the answer to these questions and depends, what and where it is necessary to implement objects in the part of large generation. We also have our proposals based on the development of cities and the need to replace the retiring capacities. We believe, for example, that in the near future it is necessary to replace the new station with the Artemovskaya CHP plant in Primorsky Krai. Gradual retirement awaits Vladivostok CHP-2, for the replacement of which input CHP "Vostochnaya" will not be enough. It is necessary to build steam-gas plants on the station site, as well as implement projects of local mini-GTU-CHP. In need of replacement is Khabarovsk CHP-1, for which we propose the construction of the fourth city heating and power plant.

- Construction of the second stage of the Blagoveshchenskaya CHP has reached the finish line. And how are the other construction projects moving under the presidential decree on the development of RusHydro?

- Indeed, the second stage of the Blagoveshchenskaya CHP plant will be launched on 25 December. The remaining stations work: Yakutskaya GRES-2 will be introduced in 2016 year, the thermal contours of the buildings have already been closed and the technological equipment is being installed. And the CHP in Sovetskaya Gavan and Sakhalinskaya GRES-2 hope to launch in 2017 year.

Unfortunately, we lost the general designer for the CHP project in Sovetskaya Gavan - the Siberian ENTC stopped working out the working documentation due to the difficult financial condition of Е4 holding. In this regard, we conduct competitive procedures for the selection of a new project organization. We expect to conclude an agreement with a new designer by the end of this year. Currently, the construction schedule is updated, while the contractor is provided with documentation for the fourth quarter of the current year and the first quarter of the next.

- RAO ES of the East is building a modern gas power station in Vladivostok. At what stage is the project?

- At the "Vostochnaya" thermal power station, we started building an electric power output scheme. The installation of cable channels and cable laying, installation and adjustment of electrical equipment, which in the future should ensure the delivery of electric power from the station to the city electric network, is already underway on the site. In January, we plan to start adjustment of switchgears, in February - commissioning of gas equipment. In parallel with this, we must start the commissioning of gas turbine plants, which are planned to be completed in April 2016 by trial launches of the GTU.

In winter, the installation of internal cold and hot water supply systems, sewerage, fire extinguishing automation, laying of cable lines, finishing of premises and other works in the already erected buildings of the new station will be conducted. By the way, part of the equipment of the future thermal power plant "Vostochnaya" is already connected to the existing city heat supply system. In the coming heating season it will be used to provide citizens with heating and hot water. The station will be put into operation in the fourth quarter of the year 2016.

- How has the fuel balance of RAO ES of the East changed in recent years?

- Over the past five years, we have been actively working on gasification of capacities - the share of gas in the fuel balance increased from 21% to 44%, and coal decreased by almost 19%. The most important result for us was a reduction in the consumption of petroleum products by more than 4 times. We expect gas to take up more than half in the fuel balance by 2020. However, this does not mean that we are moving away from the use of coal - thanks to the construction of new facilities, the physical volume of its consumption will increase by about 18%.

In parallel with the change in the fuel balance, we conduct a lot of activities aimed at reducing costs in terms of fuel supply. At the stations, trial burning of non-project coals is carried out with the subsequent expansion of the “coal basket” and increasing competition between suppliers. This, in turn, helps to abandon the use of long-range brands. For example, we are now importing Sakhalin coal to Kamchatka, and not raw materials from the mainland, as before.

- RAO ES of the East is preparing to restructure its debts. This step will release significant funds for the holding. How will the company dispose of these funds?

- Restructuring does not mean that we will suddenly have free money, and we will think where to put them. For RusHydro, our restructuring will mean the acceptance of certain obligations both for VTB and for the Russian Federation, as the financing received from the bank will be half guaranteed by the state guarantee. Obviously, part of these obligations will be released to RAO ES of the East. We will be required to develop a list of activities for their implementation and report annually to the shareholder through a system of key performance indicators.

Of course, the savings on interest payments will be. It will allow to carry out the repair program more fully - now there is enough money only for the most basic work. Perhaps, it will turn out to direct part of the released funds to additional measures in terms of technical re-equipment and reconstruction. Thanks to refinancing, we will be able to reduce the pressure of interest payments on current activities in the holding.

- RusHydro consolidates Far Eastern energy assets in its structure. How will this help the development of Far Eastern energy?

- In many ways, this will be necessary in order to make the necessary decisions faster and easier, as well as to optimize the financing of development projects.

- One of the main problems, because of which the power of the Far East can not go to market lines - is the lack of return on investment. How to solve this problem in the RAO ES of the East?

- Absence of investment return mechanisms in the energy sector of the Far East is a complex problem, typical for all industry players in the region. We would like to count on the introduction of long-term tariffs, which will allow us to channel funds not only to cover the cost of production, but also for investment purposes. We understand at the same time that the topic is very difficult, and to avoid the growth of tariffs, various proposals were put forward. One of them, and it could work, is the redistribution of an insignificant part of the fee for capacity in the first and second price zones in favor of the Far East. It's just a few kopecks, but this money can become critical for the Far East and will allow us to expand the construction of new stations.

- The President of Russia signed a law aimed at increasing the payment discipline of energy consumers. The document introduces additional guarantees for suppliers of heat and light, and also tightens measures of influence on debtors. How will it affect the work of RAO ES of the East?

- There are several very important points in this law. First, the size of the penalty for late payments besides the fact that it has doubled, it also significantly exceeds the bank interest rate - defaulters are no longer profitable to be credited at our expense, which often happened before. Secondly, the law clearly requires “non-disconnected” consumers to provide security for the fulfillment of their obligations to pay for electrical energy. The introduction of administrative responsibility for the violation of this and other requirements will enhance consumer discipline and increase the collection of funds. However, there are other necessary measures, the decision on which has not yet been taken: first of all, it is the establishment of the priority of direct relations between the energy producer and the final consumers. As long as we do not go everywhere to the practice of direct payments, the struggle for payment discipline will be particularly difficult.

- You said that the power system of Sakhalin has a large reserve ratio. How priority is the Sakhalin-Japan energy bridge construction project in this regard?

- The island energy system due to its isolation is really forced to maintain a significant reserve. As for the energy bridge, its implementation is expected, first of all, due to the construction of additional generation. The release from the available capacities is considered by us as an opportunity to effectively load surplus capacities. This will increase the reliability of the power supply of Sakhalin thanks to the construction of the network infrastructure necessary for export and the transfer of generation to more favorable operating conditions. That is why our project is supported by the authorities of the Sakhalin region. Now RusHydro and RAO ES of the East are negotiating with Japanese companies to determine potential counterparties from Japan.

- As early as 2013, RAO ES of the East, together with RusHydro, signed an agreement with Japanese Kawasaki on the construction of a plant for the production of liquefied hydrogen in the Magadan Region, which will allow the utilization of free capacities in the regional power system. What is holding back this project?

- We see a rather high uncertainty in the world energy markets. In this regard, together with Japanese partners, we plan to conduct an additional marketing research on the analysis of prices and possible markets for liquefied hydrogen. Parallel to this, RAO ES of the East, together with RusHydro, began working out the feasibility of implementing the project using alternative technologies for liquefying hydrogen. We hope that in 2016 year we will be able to decide on further steps to implement the project.

- In September, RAO ES of the East signed a tripartite memorandum with the authorities of Mudanjiang and the Chinese "Amur Energo-Stroy Alliance" on the construction of the Ussuri thermal power station, the need for which was announced as early as in 90. How relevant is this project today?

- This project is very interesting due to the fact that two countries need it at once. On the one hand, Ussuriyskaya CHP will help solve the city's heat supply problems by replacing numerous inefficient boiler houses with a centralized heat supply system. At the same time, the total volume of the electric power plant is ready to buy out the power of Mudanjiang. "Amur Energo-Story Alliance" expressed its readiness to provide the project with financing and implement it "turnkey" on the basis of Chinese-made equipment. Work in the cogeneration mode is the most cost-effective and will help to restrain tariffs for heat and hot water for Ussurians. Adds the investment attractiveness of the project to the availability of foreign exchange earnings in yuan or US dollars, which will attract cheap financing of Chinese banks.

- Recently, Asian manufacturers are showing increasing interest in the renewable energy market of the Far East. Will the plans for the development of renewable energy in the region undergo a revision against the background of changing economic conditions?

- The main indicator of our RES program is its economic efficiency. Therefore, communication with the Asia-Pacific partners is reduced to optimizing the cost of equipment and capital construction. In this logic lies a pilot project with the Japanese companies Mitsui and Komaihaltec and the Japanese governmental organization NEDO, a wind farm project in the village of Ust-Kamchatsk. It will allow to evaluate the samples of equipment provided by Japanese colleagues and to understand how they are suitable for future facilities, including, from the point of view of economic efficiency. Moreover, together with Komaihaltec, we are considering the possibility of localizing the production of wind power plants or their individual elements in the territory of the Far Eastern Federal District - this will also reduce costs. To the choice of technologies of solar and wind generation and optimization of their cost, the equipment manufacturers from China also actively joined. The pool of potential suppliers is growing, the competition between them is increasing, so our plans to implement a program for the development of RES in the Far East remain in place.
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