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Russia’s government approved on Thursday a ten-year modernization program for Russian power plants, expected to attract US$28.8 billion (1.9 trillion Russian rubles) in private investments in the sector, Energy Minister Alexander Novak said.
The government approved today a plan by the Russian Energy Ministry to upgrade nearly 40 gigawatts (GW) of installed capacity, which accounts for around 16 percent of Russia’s total installed generation capacity, Prime Minister Dmitry Medvedev said. The project will run through 2031, Medvedev added, noting that Moscow plans to have long-term predictability in electricity prices to provide businesses with long-term predictability of energy costs.
Novak, for his part, said that the program will run between 2022 and 2031. The first competitive selection will be held for 11 GW in April or May, with power supply expected to start in 2022-2024.
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Russia’s key selection criteria for equipment will be the low cost per kWh, Novak noted. The modernization program will also aim to have as much domestic equipment and engineering as possible, the energy minister added.
According to the BP Energy Outlook 2018, natural gas will stay the leading fuel in Russia’s power generation through 2040. The share of natural gas, however, will drop slightly from 54 percent in 2016 to 53 percent in 2040. The share of nuclear power in Russia’s power mix is expected to grow to 19 percent by 2040 from 15 percent now, and the share of hydropower generation is seen flat at 15 percent. The share of coal in Russia’s power generation will drop from 14 percent to 8 percent in 2040, according to BP. Despite the fact that renewables will soar by more than 7,500 percent by 2040, renewable energy will contribute just 2 percent to Russia’s primary energy demand in 2040, compared with 17 percent on average among the other BRIC nations (Brazil, India, China).
Russia will also remain one of the leading fossil fuels producers in the world through 2040, with a share of 14 percent of both global oil and gas production, BP says.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.