Rostec asked Putin to give him the construction of 1 GW of generation in Crimea and Taman without a competition

According to Kommersant, Rostec asked the President of the Russian Federation to give it the construction of new generation in Crimea and Taman with a total capacity of 1 GW without competition. The state corporation expects to build new power units at its own sites—Udarnaya and Tavricheskaya TPPs—by 2027–2028. The project proposes to use GTD-110M gas turbines produced by Rostec, as well as to attract Iranian suppliers. The Ministry of Industry and Trade insists on building capacities entirely on Russian technologies, proposing to also consider gas turbines from Power Machines. According to market participants, CAPEX of both projects can reach 263 billion rubles.

The head of Rostec, Sergei Chemezov, appealed to Russian President Vladimir Putin with a request to make VO Technopromexport LLC (TPE), controlled by the state corporation, the only supplier of new generating facilities in the south of the Russian Federation, sources familiar with the contents of the letter dated January 10 told Kommersant. According to them, the top manager proposed “immediately and on a non-competitive basis” to begin the construction of new power units at the 560 MW Udarnaya thermal power plant in Taman, which is being completed by the company, and the 470 MW Tavricheskaya thermal power plant operated by the company in Crimea. The President put the visa “agreed for Crimea and Taman.”

The Ministry of Energy, as Mr. Chemezov writes, has determined the need to build an additional 250 MW in Crimea and 750 MW in the Krasnodar Territory due to the predicted power shortage there. The tender for the construction of generation is planned to be held as a single lot in the second quarter of 2024. In 2014, TPE was already appointed as a contractor for the construction of two 940 MW thermal power plants in Crimea – Balaklava and Tavricheskaya.

As Deputy Head of the Ministry of Energy Pavel Snikkars reported on January 31, to solve the problem of energy shortage in the south of the Russian Federation, not only a competition is allowed, but also other options for choosing an investor. “In the South, the mechanism of the power supply agreement (PDM.— “Kommersant”) will be used, hopefully, through competitive procedures or other decisions. There are some peculiarities there, namely in terms of choosing who will build this generation and in the future receive a guaranteed return on investment,” he said (quoted by Interfax). New power plants in the Russian Federation are built according to the mechanism of competitive selection of power for new generation (KOM NG, similar to DPM), which guarantees a return on investment due to increased payments on the wholesale energy market.

In the letter, Sergei Chemezov notes that TPE already has design solutions, the necessary infrastructure, as well as a pre-foreseen possibility of expanding the Udarnaya and Tavricheskaya TPPs. Taking this into account, the commissioning of new power units is possible in 2027–2028, “which is not feasible for other market participants and is the simplest and most effective solution,” notes the head of Rostec.

Mr. Chemezov proposes to use domestic gas turbines in a volume of at least 51% of the installed capacity. We are talking about the GTD-110M turbine, which is produced by the United Engine Corporation, which is part of Rostec. The remaining share of 49% is proposed to be given to Iranian-made equipment.

TPE has already purchased two turbines from the Iranian Mapna for the Udarnaya thermal power plant (see Kommersant on July 24, 2019). Now, according to Kommersant, Iranian turbines have already been installed at the station. Probably, the same partner is also discussed when implementing new projects. The first turbine GTD-110M was also installed at this thermal power plant.

At the same time, the Ministry of Industry and Trade believes that TPE should build new thermal power plants based only on domestic equipment, as follows from a letter from Deputy Head of the Ministry of Industry and Trade Mikhail Ivanov to the Ministry of Energy and the government dated January 31 (available to Kommersant). Mr. Ivanov proposes to consider Power Machines as a supplier of the main equipment, which, according to his data, can supply two GTE-170.2 machines for new generation in the south in the fourth quarter of 2026 and up to six GTE-170.2 in 2027.

Rostec, the Ministry of Industry and Trade, Power Machines and the Ministry of Energy did not respond to Kommersant’s request. As a Kommersant source familiar with the situation reported, TPE is now working on design solutions with the maximum use of domestic main equipment, that is, GTD-110M and GTE-170.

According to Kommersant’s interlocutors in the industry, the total capital costs for the construction of 1 GW of new capacity in the south of the Russian Federation could amount to 225–263 billion rubles, including 56.3–65.6 billion rubles for 250 MW in Crimea and 168, 8–197 billion rubles—750 MW for Taman. The total payment of the energy market over 20 years (according to the terms of KOM NG) could be about 0.900–1.05 trillion rubles, including 225–263 billion rubles. for generation in Crimea and 675–788 billion rubles. for Taman.

Independent expert Yuri Melnikov notes that the Russian Federation does not yet have experience in the commercial use of either Iranian turbines, or GTD-110M, or GTE-170 and power units based on them. “Regardless of the chosen option, we will be talking about pilot operation with increased risks of unreliable operation and difficulties in service – at least for several months or even years from the moment of launch,” he says. The advantage of the option with GTD-110M during the construction of new power units, in his opinion, may be the concentration of responsibility with Rostec as the owner and supplier of both the turbine and the station itself.

Tatiana Dyatel