Until the 1990’s, Russia was always at the forefront of the world’s hydropower sector. What is Russia’s position today in terms of hydropower, both domestically and on a global scale?
Today, I think that the Russian Hydro Power industry has not only been restored to its former state, but has also been able to create significant added value to its Soviet heritage. RusHydro does not only use existing assets efficiently, but we are also creating new capacity and putting an emphasis on research and development. It can’t be denied that in this day and age, development is impossible without an exchange of experience and technology. This is why RusHydro cooperates with the foreign industry majors to achieve its goals.
Do Russian Hydro Power companies have ambitions to export their expertise to the international markets?
This process has long been underway. Many Russian companies have already established strong positions in the international market. Unfortunately, many Russian companies these days are acting mostly as energy suppliers. At the same time however, I am convinced that our potential is not limited to this.
I believe that Platts recently ranked RusHydro as the fastest growing energy company in Russia. This is exciting news, but how will you sustain this growth in the coming years?
This fact creates a great opportunity for us. Currently, the level of development of water resources in Russia is only about 20%. Our potential however is not limited to the construction of HPPs in Russia. Over the next few years, we are planning to significantly raise our capitalization, through asset acquisition and management both domestically and abroad. In particular, substantial growth will be achieved by the acquisition of a 40% stake in IrkutsEnergo. Last year we also acquired “RAO ES of the East”, the Sevan-Hrazdan cascade in Armenia and a blocking stake in Krasnoyarskaya HPP.
With a lot of equipment out of date and obsolete in the regions HPP sector, it is clear that technology investment is key to the upgrading of existing hydro facilities. What investment programs are planned for the regions HPP sector?
The reliability and safe operation of Russian HPPs are the main priorities for RusHydro. This is why we are constantly investing in the renovation of our equipment. This modernization does not only allow us to provide uninterrupted operation of all our facilities but also increases their efficiency due to the implementation of advanced technology. Through this, we plan to reduce the wear rate from the current 40-45% to 10-15% by 2020.
What new HPP construction plans do you have at RusHydro?
At the present time, the company is implementing a number of large projects. Among others we have: Boguchan HPP (3000 MW), Zagorsk PSHPP-2 (840 MW), Ust-Srednekan HPP (570 MW), Irganai HPP (400 MW), Zaramag HPP (342 MW) and Nizhne-Burey HPP (320 MW). Also, by 2014 we plan to complete the restoration of Sayano-Shushenskaya HPP.
With many international technology companies currently working in and looking to enter the Russian sector – how do you see integration between Russian and Western technology?
Today, we should take full advantage of the opportunities that the global economy grants us. Through collaboration with our western colleagues, we have an opportunity to exchange best practices, implement progressive innovations and sustain the qualification of our research and development divisions at the highest level. A good example of such hi-tech collaboration is a joint venture between RusHyrdo and Alstom, which has been manufacturing energy equipment for HPPs since 2010. In the summer of 2011 we also signed a number of agreements with Voith Hydro.
Hydropower is an efficient and clean form of power generation but its competing for funding with other generation sectors such as nuclear. Is this affecting the pace of development of the Hydro sector?
When comparing cost levels between the nuclear and hydropower sectors, the latter appears to be more profitable. It should be noted however that apart from the significant investment required at the initial design and construction stages, for which the level of costs is comparable in both sectors, there is also an issue of operating costs. And whereas for HPPs these are limited to sustaining the reliability and efficiency of a plant, the nuclear power engineers are compelled to budget immense funding for the purchases of nuclear fuel. When we also include the fact that generation from Hydro Power is among the lowest of all forms of power generation, it becomes apparent that we have a serious advantage.
Following the Fukishima tragedy last year and the bad press received by the Nuclear industry, do you foresee positive knock on effects for the Hydro Power industry?
We wouldn’t like to see the tragedy at Fukusima as an opportunity to further our cause. Humanity won’t be able to abandon nuclear power in the foreseeable future. The objective for today’s energy industry on a global scale is not to find a substitution for Nuclear Power, but to use it in the safest and most efficient manner. As for the efficient operation of nuclear power plants, hydropower engineers do have a number of interesting solutions. For example, it is known that NPP’s, due to their technological features, are not able to promptly respond to alterations in power consumption. A solution for this is to use pumped storage plants (PSHPP), which allow you to cover load peaks in the energy system.
With environmental awareness key to new project development, how does Hydropower fit in and compare with other power generation options?
Hydropower is first and foremost a clean form power generation. HPPs do not use fuel, which means no harmful emissions into the atmosphere. Water reservoirs built for HPPs provide safety from flooding for large territories while on the flip side, arid zones are provided with irrigation. HPP reservoirs also provide a water supply solution for the local communities.
It has been a pleasure to talk with you today; do you have any further comments for our readers?
In Russia today, there is probably not one single industry sector that provides as many opportunities as hydro power. The Russian Federation is the largest energy market in the world, and we have only scratched the surface of our Hydro Power potential. Our industry receives strong support from the Government and does not have any limitations for attracting foreign investment. At RusHydro, we are creating the future of energy, and are prepared to do this in cooperation with all our partners.
