SUEK has recently undergone a major structural reform program to separate its coal mining and power generation divisions. Why did the company choose to do this and what benefits are you expecting from the change?
The decision to separate the power business from coal mining division was made due to a number of reasons. First of all, power generation and coal mining are two distinctly different businesses – they use different technologies, markets, and involve different risks. There is no real reason to combine them within a single company.
Secondly, we were not completely satisfied with the energy management structure. OJSC “SUEK”, which owned shares of OJSC “Kuzbassenergo” (TGK-12) and OJSC “Eniseyskaya TGK (TGK-13)”, had the ability to formally influence the decisions of the TGK management through their Boards of Directors and shareholders’ meetings. This situation limited the manageability of the energy business. In the initial stages it worked for us, however with time the situation had to change. Lastly, the new company structure is more attractive to investors and ultimately provides better opportunities to raise funds for new projects.
As a result of these changes, we now have a new company – the Siberian Generating Company (SGK), which manages TGK-12 and TGK-13. SUEK acts as a supplier for SGK and we cooperate just as we would with any other partner.
With renewable energies being promoted as key to future energy sustainability, what long term future does the coal generating sector have?
Green energy has its obvious advantages, but is currently far too expensive for the consumer. The threat of renewables to our business does exist, however whether any significant headway is made will solely depend on its price and whether communities are prepared to pay higher tarrifs.
Today, coal is one of the cheapest energy resources in the world, and technologies mitigating the environmental impact of coal power plants are constantly improving.
If you discount hydropower, the share of renewables in Russia is very small and in the long term we don’t see renewbales taking over a large market share from coal generation.
What scope is there for SGK to grow as a regional power generator in Russia – can you enter new regions?
We are certainly prepared to consider acquisition (or exchange) of power plants in other regions, if we find them interesting and advantageous. Right now, however, there are no specific plans or decisions that I can discuss
Could you see a future where SGK becomes a net energy exporter to foreign countries?
This would only be possible if the import/export operations in the energy market were liberalized. At the present time this is not possible however. If things change in the future, we will review the situation.
What plans do you have regarding the construction of new generation facilities or retrofits to existing plants?
At the end of 2010, TGK-12 and TGK-13 signed electricity delivery agreements. For us, this was a land mark deal that we had been waiting for. The total investment needed to meet these agreements is in the region of 2 billion dollars. For the agreement with TGK-12, we need to facilitate an extra 280MW of new capacity, and modernize and upgrade a further 830MW of existing capacity, of which 100 MW has already been done.
For TGK-13, we have to facilitate an extra 305MW of capacity, and modernize a further 410MW.
In the first quarter 2012, TGK-13 will commission the Krasnoyarsk CHP-3, which is its first PDA project.
The PDA covers our largest projects. There are also some smaller projects that deal with increasing the operational efficiency which we’re also working on.
Coal fired power stations are often perceived to be causing long term environmental damage. How is SGK minimizing its environmental impact and emissions release?
SGK is constantly monitoring our policy on environmental safety at all of our power stations. We have a separate budget for this specific purpose. The underlying philosophy of our company is dynamic growth using an efficient, environmentally friendly approach. Being a responsible user of natural resources, we are seeking to gradually reduce our impact on the environment and we are consistently implementing, among others, the following measures:
» complete compliance with environmental legislation;
» increasing environmental safety of our operations;
» decreasing emissions and discharges of polluting agents, disposal of waste in specially designated areas;
» modernization, reconstruction and replacement of outdated equipment;
» implementation of the best available technologies;
» increasing the efficiency of natural resources and power source usage, energy conservation;
» making management and investment decisions, taking in to consideration of environmental priorities and social factors.
OJSC “Kuzbassenergo” and OJSC “Eniseyskaya TGK (TGK-13)” are both carrying out environmental protection measures in a number of areas, including:
» reducing emissions and mitigating their environmental impact. The Company is consistently implementing measures for the development, installation and reconstruction of gas purification equipment and the improvement of combustion technology, ensuring current maintenance and overhauling of boiler units as well as the reconstruction of other technological equipment.
» Regarding water usage, the company is developing and implementing programs on the design, construction and reconstruction of waste water treatment facilities, repairs to the hydraulic ash disposal systems, taking measurements to ensure correct observance of the sanitary protection zones, taking water protection measures in waste water receivers, ensuring the installation of metering devices for water consumption and discharge control
» in order to decrease the volume of production waste generation (PWG), measures are being taken for technology advancement related to PWG treatment and the development of production control in this area; measures are being planned and implemented to resolve the problems of ash and slag waste (ASW) utilization through the construction of screening and dispatch units which would process ASW into consumable goods and ships it to the buyers.
What new technologies have been recently employed to improve your generation efficiency?
The Reliability Centered Maintenance method is now being implemented at two of our stations – Abakan CHP and Barnaul CHP-3. RCM allows a company to optimize its asset’s maintenance and repairs program. The actual results of implementing this system are better safety for both the staff and for the environment, an improvement in performance (volume of production and its quality), and better motivation for personnel. Using RCM allows fast and efficient phasing of new assets into application and their maintenance at the lowest possible cost.
I also have to mention the upcoming commissioning of the first power unit at Krasnoyarsk CHP-3 in the first quarter this year; this unit had been constructed using the latest available technologies. Thanks to this, a significant increase of energy efficiency at this Cogeneration plant will be achieved. This is the largest project we have fulfilled, and its scale becomes apparent when one mentions the volume of investments – over 13.5 billion rubles. Execution of the project for the construction of the first unit at Krasnoyarsk CHP-3 is a clear indication of how we fulfill our commitments to the government. This experience is not only significant for us as a company, but for the entire Krasnoyarsk region and for the country as a whole. Experience in the construction of coal-powered units is now of utmost importance, and we lead the way in Russia on this issue.
It’s been a pleasure speaking with you; do you have any further comments for our readers?
Today we are going through a very interesting time in our companies development. We are still young, but we have a number of reasons to be proud. We are steadily moving forward by executing our commitments to the Government and we hope that our upgrade and modernization programs, ensuring an increase in efficiency and capacity, will have a positive effect on power generation in the industrial, social and economical growth of Siberia.
