TGC 1 has a diverse portfolio of both hydro and cogeneration facilities – which of these sectors is a current strategic priority for you?
The very strength at the core of TGC-1 is our ability to use the advantages of both our hydro power and cogeneration facilities.
Concerning cogeneration, we are currently changing our thermal power generation to combined cycle thermal and gas plants. In terms of our ongoing investment program in St Petersburg, we have recently finished construction on TGC-1’s first combined cycle gas turbine units at the Yuzhnaya and Pervomayskaya CHP’s.
The new unit at the Yuzhnaya CHP passed pre-commissioning testing in February 2011, and the pilot 180MW CCGT-unit at the Pervomayskaya CHP passed pre-commissioning performance tests in October, 2010. On March 1, 2011 it started operation according to the agreement signed on the submission of capacity.
In terms of hydro power plants, modernization and automation is strategically important for us. We are currently refurbishing the Vuoksa HPP and in the Kola region TGC-1 has started modernization of the Iovskaya HPP.
In 2011 we are increasing our total output by 3.5 bln KWh. Our output will grow in the future because we have hydrogenation which is always demanded and we set new effective capacities. Moreover, the quantity of consumable electricity and heating is increasing step by step.
What impact has deregulation had on the market and to TGC 1 specifically?
Market deregulation in Russia, as well as plans for long term capacity security will have a positive impact on our business. During 2010, we received an adequate tariff on capacity agreements which will compensate costs put in by investors for modernization. And, of course, they give some priority in the market.
TGC 1 is the leading supplier of electricity and heat to the North West of Russia, but also exports capacity to Finland and Norway – do you have plans to increase your exports?
Yes, today our total export is less than 5 % of output and more than 5 % in terms company revenue. We are expecting a growth in our export – especially after full refurbishment of the Vuoksa HPPs Cascade is completed in 2013.
Russia has the world’s oldest district heating sector, but many agree it is in need of modernization. Cogeneration is a big sector for TGC 1, but what are you doing to ensure maximum energy efficiency?
We agree with this and are heading in the right direction! As I have already said we are changing our capacities in the district heating sector from thermal to gas cycle. This means not only higher efficiency – but also better technology and less environmental impact. So, improving our plants and making them more energy efficient will benefit all concerned. We also replacing much old equipment that was installed at the beginning of the 20th century.
We have just closed the CHP-5, Red October (Krasny Octyabr) which has been operating since 1922 and replaced it with the new Pravoberezhnaya CHP. For Russia, this is a first and is very unique.
We are also planning something similar with the Pervomayskaya CHP. Here, we are building two new 180MW CCGT-units to replace the old ones. On January 1, 2011 the first new unit was put into operation, with the old turbine being discarded. At the plant, we have used many new technologies for the first time in Russia. Many years ago, it was seen as the least efficient in the region; however today, it is seen as the most efficient, and environmentally friendly. As an example, used water is no longer being dumped in to the Finnish gulf.
The new units have a closed system of refrigeration and water-cooling, and we even aim to use rain water for turbine cooling. The amount of pollution is one third less than the old combined thermal cycle units produced. Indeed, I’m sure that combined cycle gas technologies are the safest of all co-generating technologies available today.
We also have another project happening at the Yuzhnaya CHP. We are improving the existing capacities from 750 MW to 1200 MW, which helps us to cover the shortage of electricity supplies in St. Petersburg and Leningradskaya Oblast, and also gives a boost to infrastructure development in the city.
The Yuzhnaya CHP has already received ISO 14001:2004 for it’s Ecological Management System (EMS). It definitely shows that the materials and technologies we use meet international ecological standards.
In the soviet times, Russia was a leading player in hydropower, but today its hydro output accounts for no more than 20% of the countries total energy output. Do you have any plans at TGC 1 to increase your hydropower capacity, and if so, will this be in plant modernization or new build?
Our total hydro generation output is 46%, and we are constantly upgrading our installations.
I’ve described some of them above – the Vuoksa HPPs Cascade refurbishment with the growth of capacity by 50 MW and the complex renovation of Lovskaya HPP. We have also put a lot effort into the reconstruction of small HPPs in Karelia.
Environmental compliance is often mentioned as key to corporate policy – what is TGC 1 doing on the ground to ensure worker, plant and environmental safety?
Our entire investments programmes aim to ensure the safety of our workforce and the environmental. We embed projects of EMS in plants and cascades and year by year we cooperate with the region’s leading scientific research institutes, supporting the operation of the power industry.
And finally, do you see any significant changes within the industry over the next 5-10 years?
I’m sure that the main thing in the near future will be a significant increase in the efficiency of both hydro and cogeneration facilities in Russia. The potential is huge, and this is a good reason for moving forward in this way. It is very difficult for every company to have an equal share of the profits available; however it is true that the more efficiently you work, the more money you make.
In my view, the electricity market and industry has to move forward from this position. It also has to stimulate the development new capacity, and the modernization of the old ones.
In summary, it is job for the government, generating companies and market regulators to put together all the conditions and allow the Russian energy sector to be as efficient as possible and compete with other countries who work under the same regulatory climate and conditions.
