R.Gulidov, A.Ognev - 11 /01/ 2007Economic Research Institute & Vostokenergo, Khabarovsk, Russia The Power Sector in the Russian Far East: Recent Status

R.Gulidov, A.Ognev - 11 /01/ 2007 Economic Research Institute & Vostokenergo, Khabarovsk, Russia

The Power Sector in the Russian Far East: Recent Status and Plans Ruslan GULIDOV Economic Research Institute, FEB, RAS

Alexander OGNEV Vostokenergo – Far Eastern Branch of “InterRAO”

2007 Asian Energy Security Project Meeting“Energy Futures and Energy Cooperation in the Northeast Asia Region” Tsinghua University, ChinaOctober 31 – November 2, 2007


Outline

Restructuring Program in Russia Particular Features of Electricity Restructuring in the

Russian Far East Electricity Demand & Supply Trends in the Region Electricity Export Projects: Status and Prospects Russia’s and the RFE Nuclear Status and Plans in

Brief


Electric Power Restructuring in Russia

Decision on Completion of Electric Power Restructuring was adopted by Government and Stakeholders (October 2007)

Vertically-Integrated System of Electricity Supply has been already divided into competitive (generation, sale) and monopolistic (transmission, dispatching) sectors

National Power Company – RAO UES of Russia – will be finally restructured and liquidated by July 2008

Governmental control will be keeping on Federal Grid company, Central Dispatching company, Hydro-OGK, Rosenergoatom (nuclear) and some other entities


Vast territory (~7 mln sq. km), uneven economic development, low population (6.3 mln)

No economic and technical opportunities to have unified power grid (UPG) in the region

UPG operates only within the Southern part of the Russian Far East

RFE’s Features


Particular Features of RFE’s Electricity Restructuring

After discussions it has been recognized that there is no conditions for electric power competition in the RFE (at least) during transition period to the electricity market

Duration of transition period is keeping uncertain Two types of electricity market are currently in operation in the

RFE – Single Producer is in remote, separate districts in northern areas – Single Buyer market is in UPG zone

Decision made that all operating companies (including generation and sale) are kept under the federal government control (52% and more) for a while

Electricity export contracts and development of export infrastructure have been appointed to national single operator – “InterRAO” Close Corporation


Electricity Supply & Demand Trends and Plans

Positive dynamics of economic activity (4.6% p.a. over 2000-2006) Low growth rate of electricity consumption (4.3% totally in 2000-2006) Electric power generation capacities are increasing

– 4th unit at Khabarovskya CHP-3 (180 MW, Dec.2006), 5th and 6th units at Bureyskaya HPP (670 MW, June & Oct. 2007) were commissioned

– Blagoveschenskaya CHP, Komsomol’skaya CHP-3, Khabarovskaya CHP-2 to be expanded

– New TPPs in Sov.Gavan’ (Khabarovskiy Krai) and in the south of Primorskiy Krai to be constructed

Shifting in primary energy production mix – Khabarovskaya CHP-1, Khabarovskaya CHP-2 и Nikolaevskaya CHP

to be switched to natural gas

Network strengthening in the Southern part of the RFE – Investments in power grid totaled $0.9 bln over 2001-2006

Investment programs approved in fuel-fired electricity generation and transmission lines ~ $3.8 bln over 2008-2015


74,0

53,7

44,038,637,237,433,735,7

37,842,443,4 39,0

47,5

68,3

99,7

30

50

70

90

110

1990. 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2015 2020

1073,8992,3

856,4 827,7 809,1863,7 878,2 924,2

1196,6980,5

1426,3

1710,0

2000,0

1260,0

1600,0

800

1000

1200

1400

1600

1800

2000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2015 2020

Russian Federation Max Path: 2006-2010 – 6.0%, 2011-2015 – 4.9%, 2016-2020 – 4.6%

Base Path: 2006-2010 – 4.9%, 2011-2015 – 3.6%, 2016-2020 – 3.7%

Elect. consumption in Russia and the RFE: overview and outlook

Bln

kW

hB

ln k

Wh

Max Path: 2006-2010 – 3.8%, 2011-2015 – 7.7%, 2016-2020 – 9.0%

Base Path: 2006-2010 – 2.4%, 2011-2015 – 4.2%, 2016-2020 – 6.5%

The Russian Far East


2006-2010 2011-2015 2016-2020

GW % GW % GW %

NPPs - - - - 0,7 18,4

HPPs 1,2 80,0 1,0 15,6 2,2 57,9

TPPs, including 0,3 20,0 5,4 84,4 0,9 23,7

coal-fired 0,3 20,0 4,3 67,2 0,5 13,2

gas-fired - - 1,1 17,2 0,4 10,5

Total 1,5 100,0 6,4 100,0 3,8 100,0

Capacity Additions in the RFE: Base Scenario

Source: General Plan for Electric Power Industry up to 2020


Installed Capacity and Production Structure by Feedstock (Base Scenario)

Installed Capacity

0.1

TPPs (coal)

TPPs (gas)

NPPs

2006 2020GW

12.3

HPPs

HPPs

TPPs (coal)

TPPs (gas)

NPPs

2006 2020

Production

Bln kWh

40.2

13.1

22.6

4.4

1.7

33.5

50.4

12.3

97.9

32.6 %

10.9 %

56.2 %

0.3% 1.7 %

34.2 %

51.5 %

12.6 %

32.5 %51.3 %

15.8 % 0.4 %

0.05

4.0

6.3

2.0

0.7

8.7

10.4

3.7

23.5

2.9 %

36.8 %44.5 %

15.8 %


Electricity Border Trade with China

Three inter-state power transmission lines (110-220kV) currently exists to supply electricity from the RFE (Amurskaya Oblast) to Northeast China (as of 2006 – 0.5 bln kWh)

In 2003 Russian “InterRAO” and Chinese "Sirius" signed a Framework Agreement on electricity supplies of 13 billion kWh over 2004-2013

Border trade has a history of 12 years but are so far controversial issue– export contracts does not include short and long-term “price formula”

– contract duration is one year, once a year finished a new one-year contract to be concluded

– an export price used to be lower than that for domestic consumers

Since February 2007 China – Russia border trade has been suspended due to electricity price disagreements


Large-Scale Electricity Export from Russia to China

In November 2006 Joint Pre-Feasibility Study of the project of large-scale electric supply from Eastern Russia to China was prepared. Capital costs ~ $18 bln. Phases are

1. 2008-2012 – the expansion of the frontier electricity trade by 3.6-4.5 bln kWh annually (a 500 kV line will be built to Heilongjiang)

2. 2012-2015 – two coal-fired TPP (totally 3.6 GW) to be commissioned in the RFE so that to expand annual electricity export up to 22.5 bln kWh (a 500 kV line will be built to Liaoning)

3. After 2015 – to build coal-fired 7.2 GW in the RFE and Eastern Siberia so that to enlarge annual export up to 60.0 bln kWh (a 800 kV line will be built to Beijing area)

In November 2006 the contract for deliveries in the frame of the 1st stage of the project was signed


Large-Scale Electricity Export from Russia to China

Thermal Power Plant

DC Power Line

AC Power Line

AC/ DC Converter

Notation Conventions


Prospects for DPRK – Russia Electricity Trade: Background

ROK – DPRK – RFE electricity interconnections were being under discussions at various levels in 2001-2004

Project profile considered was as follows– construction of 500kV AC

Transmission Line Vladivostok - Ch’ongiin (~$200 mln)

– DC Transmission Line ± 500-600 kV Vladivostok – Seoul

Due to some political and economic reasons the discussions was suspended

Cho’ngiin

Extension to the border with ROK

900 km, 500-600 kV

Russia – DPRK 500 kV transmission line suggested, 380 km


Prospects for DPRK – Russia Electricity Trade: Current Status

Since 2007 favorable conditions are being emerged to recover RFE – DPRK interconnection project – APEC 2012 Summit in Vladivostok will require the construction of

generation and transmission facilities (TPP, SS, TL) – new electricity demand aroused in the area of DPRK – Russia border

• DPRK – RFE railroad section planned• two ports of Primorskiy Krai (Pos’et and Zarubino) applied for more

power to consume • crude oil export terminal project and expansion of seaport in RaSon

FEZ

Political support of the project from DPRK – Russia Intergovernmental Commission (4th Meeting in Moscow, March 19-23, 2007)

Real prospects of electricity demand and political conditions make RFE – DPRK interconnection project commercially viable


Russia’s Nuclear Power Sector

Russia: 10 NPPs, 31 power units with total capacity of 23,2 GW (11% that of Russia), electricity production of 154.8 bln kWh (16% that of Russia), 5% of nuclear energy fraction in Russia’s TPES (as of 2006)

– 15 PWR (9 VVER-1000 & 6 VVER-440)– 15 Channel Boiling Reactors (11 RMBK-1000 & 4 EGP-6) – 1 Fast Neutron Reactor BN-600

The Russian Far East: Bilibinskaya NPP 4x12 MW, 138.4 thous. kWh & 130.8 Gcal

The Russian Far East: Bilibinskaya NPP 4x12 MW, 138.4 thous. kWh & 130.8 Gcal


Bilibinskaya NPP – CHP Single small Russia’s NPP of

public utility Provides ~30% of electricity &

heat supplies in Chukotka, ~0.4 % of those in the RFE

Actual Capacity Factor 32.5%, MCF ~ 79%

4 EGP-12 reactors (G-I) were commissioned over 1974-1976

Lifetime period of the units as designed had to be completed in 2004-2006 After auditing the lifetime period was prolonged up to 2009/2010/2016

(subject to unit) Based on the Federal Program on Nuclear Energy Sector Development up

to 2015 it is scheduled to decommission BNPP over 2019-2021


Outlook for Nuclear Energy Development in Russia

Source: General Plan for Electric Power Industry up to 2020

Note: All projections are based on Rosenergoatom Company capabilities

2006-2010 2011-2015 2016-2020

2.07 11.08

19.12

3.7

24.87

Expansion and Decommissioning Projections

Nuclear Generation Projection

Installed Capacity (GW)

2006 2010 2015 2020

23.3 26.7

37.9

53.158.8

Base Case +28.6 +32.3 GW Expansion +38.0 GW –3.7 GW Decommissioning –3.7 GW

Max Case +34.3Max Case Base Case


Nuclear Energy Development in the RFE: Background

In 1980s, early 1990s a range of projects and intentions to site some NPPs in the Russia’s Far East was under discussion – Nuclear Energy Inland Area in Primorskiy Krai (2 NPPs of firstly 1.28 then 2.56

GW each and NPP-CHP of 1.28 GW = 6.4 GW as combined)

– Nuclear Energy Coastal Area in Primorskiy Krai (NPP of firstly 1.28 GW, then 2.56 GW as well as 2 NPPs of 2.56 GW each = 11.52 GW)

– Nuclear Energy Area in Khabarovskiy Krai (NPP of 2.56 GW each and NPP-CHP of 1.28 GW = 3.84 GW as combined)

– Sitting Small Floating NPPs in many territories of North, Northeast Russia

In reality only two NPP was under consideration – The Feasibility Study was done for Far Eastern NPP (Khabarovskiy Krai) with

2.56 GW (4 VVER -640) (1994)

– The Pre-Feasibility Study was done for Primorskaya NPP with 2.56 GW (4 VVER-640) (1996)


Nuclear Energy Development in the RFE: Current Status

Based on General Plan for Electric Power Industry up to 2020 it is planned to construct two NPPs in the RFE over 2016-2020– Pevekskaya Floating NPP with 70 MW (KLT-40S) to replace

Bilibinskaya NPP in Chukotskiy Autonomous Okrug

– Primorskaya NPP with 600 MW (2 x VBER-300) to meet the increase in domestic power & electricity demand

Primorskaya NPP could be constructed by IPP to supply New aluminum plant planned in Primorskiy Krai

Up to 2016 in Russia it is planned to produce 7 KLT floating reactors. Probably more than one of them will be sited in the Northern territories of the RFE


Thank you for attention!

Dr. Ruslan Gulidov, Economic Research Institute, FEB, RAS Khabarovsk, [email protected]

Dr. Alexavder OgnevVostokenergo – Far Eastern Branch, “InterRAO” Close Corporation [email protected]

Documents

R.Gulidov, A.Ognev - 11 /01/ 2007Economic Research Institute & Vostokenergo, Khabarovsk, Russia The Power Sector in the Russian Far East: Recent Status