TPPs are not built immediately – Newspaper Kommersant No. 228 (7429) dated 12/08/2022

According to Kommersant, generating companies may delay the implementation of 20% of the program for the modernization of old thermal power plants – 26 projects with a total capacity of almost 6 GW and a cost of 76 billion rubles. Most companies asked for a one-year delay, while Inter RAO and TGC-2 asked for a year and a half. Inter RAO explains the delay by the failure to deliver turbines from Power Machines, TGC-2 complains about the increase in the cost of equipment. Regulators expect that the delays will not affect the reliability of the power system, and consider them justified. But industrial consumers and a number of experts call the power industry’s arguments “unconvincing.”

The generating companies, according to Kommersant’s information, exercised their right to defer the commissioning of 26 thermal power plant modernization projects with a total capacity of 5.8 GW. The total CAPEX of projects, according to Kommersant, is 76.3 billion rubles. Among the shifted projects are the facilities of Gazprom Energoholding, Inter RAO, TGC-14, En + and the Siberian Generating Company.

After the outbreak of hostilities in Ukraine, the government, as part of support measures, granted power engineers the right to postpone the launch of projects for the modernization of old thermal power plants without explaining the reasons (see “Kommersant” dated April 28). This opportunity remains until the end of this year. The company can delay the launch by up to 12 months, but the government has the right to extend the delay. This has already been asked by Inter RAO and TGC-2. The issue was discussed on December 7 at the government commission for the development of the electric power industry, Kommersant’s sources say. The Ministry of Energy did not respond to a request.

Inter RAO wants to postpone the launch of two power units of the Nizhnevartovskaya GRES for 17 months, until February 2025 and May 2026, follows from the draft protocol of the government commission, which Kommersant has read.

Representatives of the energy holding, according to Kommersant’s information, at the meeting referred to problems with the supply of turbines from Power Machines. Inter RAO did not provide any comments.

Power Machines explained to Kommersant that the delay in production was due to “the high load on Russian suppliers of cast and forged billets of cylinders and turbine rotors.” Suppliers are shifting deliveries of long-cycle billets to a later date, which leads to a delay in the production of generating equipment, the company says: “Despite the difficulties associated with the development of new nomenclature by suppliers, we consider it important to support the development of our domestic enterprises in this way.”

TGC-2 asks to postpone the launch of the Kostroma CHPP-2 unit by 18 months until July 2027, and the Yaroslavskaya CHPP-3 and Yaroslavskaya CHPP-2 units by 17 months, until May 2026 and May 2027, respectively.

According to the interlocutors of Kommersant, TGK-2 did not provide evidence of problems with the supply of equipment, but pointed to an increase in their price by almost half, which will cause difficulties with the payback of facilities. TGK-2 did not answer “Kommersant”.

The Market Council (energy market regulator) told Kommersant that 26 facilities make up about 20% of all selected CHP modernization projects and this is “quite adequate to the current situation.” Regarding the request of Inter RAO and TGC-2, the Market Council said that such a “temporary anti-crisis mechanism” is provided for by the current rules. The companies provided the commission with supporting documents, the regulator added. “As for the risks of reducing the reliability of power supply due to such transfers, they can only be accurately assessed by the System Operator or the Ministry of Energy, but given the significant reserves in the energy system, they are unlikely to be significant,” they say.

The Community of Energy Consumers told Kommersant that references to the problems of machine builders and other external causes with such significant delays in the implementation of projects “look unconvincing and look more like an attempt by generating companies to avoid responsibility for their own miscalculations.”

Independent analyst Yuri Melnikov believes that problems with the supply of equipment “were expected.” The program is unprecedented in recent decades in terms of the number of projects, the range of upgraded steam turbines and the deadlines for execution, the expert notes: “Building supply chains and quality management on such a scale have become serious challenges for turbine building companies, and sanctions restrictions have only made the task more difficult.”

Oleg Dudikhin from Kept adds that the failure of projects to pay back due to the increased budget is an investor’s risk, and it should be included in the performance indicators due to which he won the selection. These reasons, according to the expert, “can hardly be called a good reason for postponing the commissioning date.”

Polina Smertina