“The only option is more manual control”

In August, the Government Commission for the Development of the Electric Power Industry approved the scope of work for the modernization of Primorskaya GRES with a capacity of 1.5 GW to supply power to the Eastern Test Site without CAPEX approval. Asset Development Director of the Siberian Generating Company (SGK, part of SUEK) Igor Sorokin told Kommersant when the company will conduct a price audit and whether it will have time to complete the modernization on time.

— Why didn’t you submit the technological and price audit (TPA) of the Primorskaya GRES modernization project to the legal commission?

– Let’s imagine everything. All steps are performed in order, according to the regulatory framework. First, a list of projects for modernization was determined, which included, among other things, Primorskaya GRES. At the last meeting, the commission approved the scope of work for each project. Only after that the government commission will approve the amount of payment for capacity for this scope of work. Now we are finishing the development of project documentation in order to pass the Glavgosexpertiza, in parallel we will make a TPA. I hope that by the end of this year the documents will be ready, we will send them to the government commission.

Don’t you think the logic is broken? There are examples when projects were optimized and changed after the TCA.

– There are no comments on the composition of the work. Objectively, there are not many options. We sent a justification for investments to the Ministry of Energy. An independent expert organization expressed a positive opinion regarding the quality of the project. We have been analyzing the station for more than a year and a half, and have determined the ceiling of its possible loading. If you do not invest in the station, then it can operate in its current state for a maximum of 4.5 thousand hours of using the installed capacity. We are faced with the task of ensuring its operation for 6.5 thousand hours. We also analyzed all possible technological measures for modernization. We left some of the events, some were removed due to the high cost.

— Last year, SGC announced that they had already doubled the estimated CAPEX of the project, up to 28 billion rubles. How much more can the price rise?

Of course the price will change. We made past estimates based on data from the end of 2020. Current prices, even if the volume of physical work remains the same, will be higher.

— The commissioning deadline is the end of 2024. Will you make it?

— Physical terms are feasible. But it all depends on how many blocks are simultaneously brought out for modernization. Of course, we would like to do it faster to improve the efficiency of the project. We are ready to modernize up to four power units at the same time, but the possibility of decommissioning is determined by the balance situation and ensuring the reliability of the operation of the United Energy System of the East. While the “System Operator” (dispatcher of the power system.— “b”) agreed on the commissioning of two units in 2022, and two more in 2023. I think that, taking into account the objective balance situation, a decision will be made to extend the duration of work until the end of 2025.

Why didn’t you propose your project for the construction of a station for Bodaibo?

— We studied and worked out options. We were not satisfied with the parameters of the competition. In the areas where the project needed to be located, we did not have an option that could win the selection and at the same time provide an acceptable return.

— Will generating companies offer to carry out additional indexation of the cost of modernization projects?

– Such a discussion is already underway at the level of the Ministry of Energy. The consumer inflation indexing that was set up in the program formula does not clearly reflect what happened. For some positions, the standard prices recorded in the modernization program were initially insufficient. In particular, electrostatic precipitators and coal-fired boilers. Already in 2020, offers from suppliers were above the standards. Offers of equipment suppliers for projects beyond the horizon of 2024 are no longer tens of percent higher, but one and a half times or more. If we don’t change anything, some of the participants will say: “That’s it, we don’t play this, everything is one-sided here.” I think the consumer does not need it, because it will reduce competition in the selection.

— Did you have any problems with the supply of imported equipment?

– Some suppliers with foreign roots refused to supply us with electrical equipment, in particular for the current projects of Tom-Usinskaya GRES and Krasnoyarsk CHPP-1. I had to buy Russian counterparts. To be honest, I am less worried about the foreign companies that have left, because there will be a replacement for them. The deadlines that are now given to us by domestic manufacturers of the main equipment cause bewilderment.

Are they overloaded?

It’s hard for me to say what the problem is.

— How did the discussion around the construction project of the Krasnoyarsk CHPP-3 block for 23 billion rubles end?

– Approval of the project. When we applied for the first selection in 2019 under the government quota, this project was already included in the comprehensive plan to reduce pollutant emissions in the Krasnoyarsk Territory. Then the government commission supported our application. There was an instruction from the government to conduct a TCA. There were no significant comments either on technological solutions or on price parameters. The project was approved in its original version, there are no changes.

— The main complaint was high costs. Do you disagree?

– In terms of unit costs per 1 MW, the project is one and a half times cheaper than a new NPP unit. If compared with similar coal facilities, then here it turned out to be cheaper. For comparison: the price of our costs in the application was 24% lower than the typical cost of activities, calculated according to the “Lamyer calculator” used in the first CSA program (capacity supply contracts.— “b”).

Of course, modernization is cheaper than building a new unit. But in Krasnoyarsk we are also modernizing facilities. And sometimes we hear criticism from two sides: we are modernizing, they say that we change one locomotive for another; we build a new one – it’s not necessary, it’s expensive. In fact, the project has a significant renovation of equipment, and the economy, and the environmental effect. With the second unit of the Krasnoyarsk CHPP-3, we are replacing part of the old capacity of the Krasnoyarsk CHPP-1, that is, this is a comprehensive project for the modernization of two plants at once. In addition, there is a backlog there: at the site of the Krasnoyarsk CHPP-3, one new unit has already been launched under the first program, a lot of infrastructure has been built. The government’s quota of 15% was just laid down for cases that required separate decisions.

– The quota has been cancelled. What are your suggestions for changing the rules of the modernization program?

— It would be reasonable to return the government quota. In the first selection, there was fair criticism due to non-transparent selection criteria within the quota. But instead of improving the system, the quota was simply cancelled. Now there are proposals to make a special selection for CHPPs. But the problem will not be solved: CHP plants with larger turbines with a capacity of about 200 MW will still win for several years. Part of the problem could be solved through a special quota for CCGTs powered by innovative gas turbines. We are also considering innovative cogeneration supercritical coal blocks for 200 MW at a pressure of 240 atmospheres for Siberia. There are no such blocks in Russia now.

– Do you propose to make a special selection for coal blocks similar to the selection of CCGT?

– Yes. Such a discussion already began in 2019, but did not end with anything.

— In the spring of 2021, production from the Barnaul CHPP-2 stopped at 75 MW. What happened?

Chimney #2 partially collapsed. It was built as part of the first stages of the Barnaul CHPP-2 in the 1950s. No harm done. This did not affect consumers, as we raised other reserve capacities for electricity and heat.

— There are PDM blocks at the station. Did you turn them off?

— No, they work. Under the CSA program, we carried out modernization, and did not build new facilities. We have replaced two turbines, two generators, two block transformers, modernized three boilers in the old building. The equipment that we introduced under the CSA has been working properly and continues to work. Over the summer, we switched the boilers to the neighboring chimney No. 1. We did not restore the collapsed pipe. The station has three more turbines and several boilers that we have not upgraded yet. We prepared them for submission to the selection within the government quota.

– Will you submit them to the general competition?

– It makes no sense. The general competition will not save the Barnaul CHPP-2. Reconstruction or construction of a new building is required. Just for such cases, the quota of the government commission was needed. If we declare individual turbines of Barnaulskaya CHPP-2 in the modernization program, then for another 25 years we will subscribe to the fact that the building will also stand. But he is clearly not in that condition. Therefore, we unequivocally stand for special attention and attitude to such complex and at the same time strategically important facilities.

— Can you close PDM blocks?

— 25 years after the commissioning of the CSA, we have the right to decommission power. Somewhere in 2038 we can bring it out.

— What is the average CIUM of your DPM blocks?

— For eight months of the current year, CIUM — 48%.

– But this year is successful – there is little water in Siberia.

— Yes, the year is scarce. But the indicator of 48% is still very high, taking into account summer repairs and a decrease in CHP load in the summer months. Consumers criticize us for our low capacity factor. Yes, on one block the indicator may be low, but on the other – high. It all depends on the variable costs of different capacities: in the day-ahead market, not only base capacities are needed, but also semi-peak and peak ones.

— Why, for example, does your Novokuznetskaya gas GTPP have an ICF of less than 1%?

— There is a special situation at this station. It was originally planned as a peak station, which in certain regime situations should quickly increase the load and provide consumption in the Southern Kuzbass. That is why it was made as a simple cycle gas turbine with the fastest possible load rise. There is a demand for it: in 2022, two gas turbines were started 176 times from a cold state, that is, 11 times a month. We can start them in the base load, but this is not economically feasible: they have a high fuel component. In Siberia, gas is more expensive than coal.

— Whose turbines are at the station?

— GTE-160 manufactured by Siemens Gas Turbine Technology. Siemens localized turbine.

– Are there any problems with the maintenance of turbines?

“As long as there is a resource, everything is fine, we are going through maintenance. Closer to the overhaul will be clear.

— Was the launch of the modernization program to replace the DPM the right decision for the market?

— This is our way: in fact, through a long-term tariff, through regulation. Because we cannot renew the energy sector through profit from the market, it simply does not exist in the required volumes. For the construction of new capacities, the price of electricity for a generator should be several times higher than we currently have. For example, in the EU, electricity is currently ten times more expensive, so the construction of generation is starting to pay off in a lot of fun. Though hydroelectric power station, even nuclear power plant, even windmills. We do not have this, so for us the only option is some kind of more manual control. First, the PDM was invented, and now the modernization program. On the one hand, it is necessary to develop the industry and modernize equipment. On the other hand, this should not be done too actively, so as not to overload consumers with payments. There is a final tariff for the consumer, which cannot be increased above inflation. Such a preservation of the status quo. There is a logic in this that is clear to everyone: maintaining a balance between consumers and producers.

Interviewed by Polina Smertina