finnode smart grid russia and nw russia heat and power
DESCRIPTION
FinNode project presentation on Russian Smart Grid and NW Heat and Power on ECORussia seminar on 1.11.2012 at FinproTRANSCRIPT
Smart Grids Russia and NW Russia
Heat and Power: FinNode project results
available
Eco-Russia Seminar 1.11.2012
Hannu Kivelä, Leading Consultant
1.11.2012
FinNode
• FinNode is a global network of Finnish innovation organisations.
• Operating via nodes in global innovation activity, FinNode actively
reveals new openings for Finnish business and research
organisations and supports their internationalisation.
• It connects Finnish and international experts and the know-how
required to promote innovation.
• As FinNode represents the Finnish innovation system in the countries
where it operates, foreign partners can engage with Finland’s central
public innovation organisations.
• The FinNode network operates in the United States, China, Russia,
Japan and India.
1/11/2012 3 © Finpro
Introduction
• FinNode published during the spring 2012 two major environment
and energy related projects on Russia:
• Smart Grids Russia
• NW Russia Heat and Power
• These projects were prepared by Finpro Russian offices
• This presentation concentrates on the main findings of the two
reports. The report summaries are available for free on request.
1/11/2012 4 © Finpro
Russian Smart Grids
Energy Consumption in Federal Districts
(FDs) of Russia
1/11/2012 6 © Finpro
Power consumption in the principal economic sectors by Federal districts of the Russian Federation (pie charts
scaling reflects the power consumption by each federal district respectively), %
Southern FD
North-Western FD
Center FD
North-Caucasus
FD
Volga FD Ural FD Siberian FD
Far-Eastern FD
Industry
Communal/Population
Services
Others
Legend:
Unified National (All-Russia) Electric Grid is synchronized with Ukrainian,
Kazakh, Belorussian, Baltic countries Electric Grids
Pricing policy
• Electricity prices for private and public category users offered by the
electricity supplier can not exceed the tariff limits prescribed annually by
the Regional Energy Commission. The latter pricing is based on the
average prices of wholesale market and middle-income of regional
population.
o Currently, two tariffs are used all over the country - day and night
rates (4 times for Moscow).
o In the future, more than two types of tariffs will be applied, such as
day-time tariff range between 10 -18, peak 18 -22, reduced tariff 2 -
5 and the rest time would be charged by night tariff* (*the electricity
provider does not want to use such a gradation because it would reduce his profit
and because electricity consumers cannot change suppliers, only the Government
can set up one or another tariff system)
1/11/2012 7 © Finpro
• This brings up the question how big the share of the regulated market is. According to the slide 8, less than 30% of
all consumed energy is sold at regulated prices. In other words, most sales are carried out in the free market.
• 1 – price zone 1 – European part and Ural
• 2 – price zone 2 – Siberia
• A-1 – 1st non-pricing zone North-West and
Kaliningrad Region
• A-2 – 2nd non-pricing zone Far East
• B – areas in which the price of electricity
is set by regional energy companies,
combining generation, distribution and
sale
• Wholesale market prices
o Price (Cost) estimated Zones
Short Term Contracts based (defined) on demand and supply
Long Term Contracts between Supplier and Consumer
o Non-price Zones
Short and Long term Contracts based on price forecast or the
previous year pricing and costs
Federal Grid Company is responsible
for normal operation, development and
maintenance of the Unified National
Electric Grid (Wide Area Grids). The
Company includes 7 branches, i.e.
Inter-systems electric grids of North-
West (1), Center (2), South (3), Volga
(4), Ural (5), Western Siberia(6),
Siberia (7) and East (8) (U>110 kV)
Structure of Russian Grids
1/11/2012 8 © Finpro
Electricity distribution is realized by
two companies: the first one is the
MRSK holding covering about 60%
of Russian territory and 96% of
population and RAO UES Vostoka
(40% territory and 4% of population).
U = 0.4 … 110 kV
System Operator of the
Centralized Dispatching
Administration
• Real-time monitoring and control of
all components of the Unified
National Electric Grid;
• Frequency and voltage (power)
control;
• Relay protection;
• Dispatching of generation and
consumption
1 2
3
4 5 6 7 8
MRSK
RAO UES
Vostoka
Analyzing the application of Smart Grids Concept in Russia, the following will be taken into account: structure
of energy transmission and structure of ownership of three main players
State Company
State Company
Set of JSCs
Set of JSCs
After the reform of Russian UES, power grids were divided into two categories – main grids (wide area grids) and
distribution grids.
Russian Grids – Challenges and Problems
1/11/2012 9 © Finpro
According to the most pessimistic
estimates, both generation and
consumption 50% growth in Russia is
expected by 2030* Average losses in electric networks in Russia are about 14% compared
with the usual 4-9% in Europe***
Operation time**
Above
permitted
standards (25
years)
Stand-by (more 35 years
for substations and 40
years for overheads)
Substations 47% 17%
Overhead lines 67% 26%
*Taras Kupchikov, 2009 , **Yuri Dementyev, Federal Grid Company, 2010*** Elena Petrova, Russian Business Newspaper 03-2011
Electrical grids as a “bottleneck” between
supplier and consumer
Equipment** Domestic Western
Gas Insulated
Switchgears
Obsolete design of
actuators, large
dimensions and
weight,
Dimensions and weight
are 20-30% lower, cost of
maintenance is 20% less
Transformers,
shunt-reactors
Low quality of
magnetic cores, oil
leakages, high
vibrations and
corrosions of tanks
Magnetic losses are 20%
lower, good gaskets and
seals no leakages,
galvanized tanks
Map of the Smart Grids projects
1/11/2012 10 © Finpro
Intellectual Grid
of the East
Intellectual Grid
of the West
Saint Petersburg’s Energy
Clusters: the Small Ring
(2012) and the BigRing (2014)
“Kola” Energy
Cluster (2013)
“Komi” Energy
Cluster (2014)
“Elga Ugol”
Energy Cluster
(2012)
“Vanino”
Energy Cluster
(2013)
“Vanino”
Energy Cluster
(2013) Goals of North-Western Projects
• Increased reliability of power
supply to Megalopolis
• Improvement of power
transmission system
Goals of Eastern Projects
• Increased energy supply quality
for new mineral deposits
• Reservation
• Reliable power supply for South
and Vladivostok Intellectual Grid of
the Russkiy Island
New equipment and software based on
the Smart Grid Platform (digital
substations, reactive power control)
allow to increase reliability and capacity
of grids
By: Oleg Budargin, FSK UES Chairman, 16.06.2011
Smart Grids for “East” interconnected
power system – the integrated pilot project
1/11/2012 © Finpro 11
The “Eastern” project includes several separate smart grids projects to test hard-and
software for large projects in all-Russian dimensions
Pilot Projects for the North-Western Energy
Clusters
1/11/2012 12 © Finpro
The Western Smart Grids Projects includes organization of 3 energy clusters
Potential customers for Finnish companies
• The most attractive customers for Finnish (and other foreign)
companies are the two largest players in the Russian market:
• FGC UES
• MRSK Holding.
• Federal authorities with a strong link to Smart Grid
o Commission for Modernization under the President of Russia
o Ministry of Regional Development and
o Ministry of Energy
However, the Federal authorities are much more difficult to do business
with.
1/11/2012 13 © Finpro
Main differences compared to the
development in the West
oThe unified energy system of Russia covers 8 time zones and unites
approximately 230 GW of generating capacity
oThe share of renewable electricity is less than 0.5% and even in 2020 it
won’t exceed 4%.
oConsumption of electricity by population – one of the key target groups
of smart grids programs is on average only 14% of total consumption -
much lower than in the western countries.
oRussian legislation on energy is controversial and disconnected.
oExisting Russian laws side-step an issue of obligatory connection of
generating capacities (facilities) to grids. However, in reality a private
power plant can connect to the grids of the Unified Energy System (and
sell electricity) only upon agreement with the System Operator. The
minimum capacity where such an agreement is not necessary is only 5
MW.
1/11/2012 14 © Finpro
Opportunities in Russian Smart
Grid
We can certainly conclude that elements of smart grids technology
will be actively used in Russia.
As estimated by the Institute for Energy Strategy, consumption of
electric energy in Russia will increase about 2.5 times by 2050.
FGC UES is implementing the concept of active and adaptive grids.
The company interest lies in:
• Application of equipment on modern technological principles e.g.
FACTS (Flexible AC Transmission System)
• Automatics
• Software
MRSK is actively developing projects connected with introduction of
Smart Metering concept and with the possibility to widen equipment
functions
• Intellectual metering = equipment and technologies
1/11/2012 15 © Finpro
Power and Heat in Russia
Power generation in the North-Western
Federal District
• Power plants over 25 MW can sell energy on the
wholesale market. All other can sell electricity only
for retail contracts.
1/11/2012 © Finpro 17
F I N L A N D
Nuclear Power Plants
CHP plants
State District Power Station
Hydropower plants
Small CHP-plants
Small Hydro-power plants
2
1
i 1
2 6
Territorial Generation Company TGK-1
Territorial Generation Company TGK-2
InterRAO UES
Wholesale Generation Companies OGK-2, OGK-6
1
2
6
i
2
2
• The market of high power is well structured. In the
study area are working
• two Territorial Generation Company - TGC-1
and 2,
• Electricity company InterRAO UES
• Wholesale generating companies OGK-2,
OGK-6
• and one nuclear power station owned by state
company Rosatom.
• All other power plant (less than 25 MW) are owned
by companies that use electricity produced mainly
to meet their own needs.
• The market (wholesale) price of electricity is based
on the equilibrium of supply and demand. However,
the Arkhangelsk region is an exception because the
existing electrical grids can not provide the free
flowing of energy to the consumers of the
Arkhangelsk region from other ones,
1
2
i
2
6
Companies
Small CHP in the study area
The investigated region is very heterogeneous in industrial
capacity and population. The map shows that the main power
plants and power stations are grouped into industrial zones.
The most developed region is Leningradskaya Oblast with
19 small CHP plants between 5 – 55 MW of installed power.
The main consumer of electricity is St. Petersburg city. Other
industrial centers are Pikalyovo, Boksitogorsk, Volkhov,
Tikhvin and Vyborg.
In the Vologodskaya Oblast there are 17 small CHP plants
with installed power from 0,5 – 10 MWh. In Vologodskaya
region there are three mani industrial areas - Cherepovets,
Vologda and Sokol . The Severstal in the town of
Cherepovets generates a prevalent share of the Oblast’s
economy.
The least amount of power sources is in the Arkhangelskaya
Oblast with 6 small CHP varying from 6 – 353 MW. These
include two large CHP boilers, one in Arkhangelsk PPM /
Severodvinsk and another in Kotlas PPM / Korjazhma.
The total number of stations operating in the wholesale market is
20; number of block stations is 42, some of them have rather large
power capacity.
Most of the power plants use other fuels than fuel oil (mazut) as
the main fuel. 1/11/2012 18 © Finpro
Statistical base of the study – heat
boilers
1/11/2012 19 © Finpro
• 3 initial data sources were in use:
• An official State Statistics
information ;
• Industrial directories
• Results of previous studies carried
out by Finpro and special agencies
• Data from different sources is a bit
contradictory. However, it gives clear
indication of the number and level of heat
generation capacity
• Total 1959 companies in 3 studied oblasts
were found
• Interviewing them we got information from
528 companies with about 1551 boiling
houses (66.5% of the official data)
F i n
l a
n d
Thus, we have received quite a representative sample for the search for the most
attractive projects
Oblast
Number of studied
companies
Number of companies got info about BHs
Number of boiling houses according to
replies
Total number of boilers (replies)
Arkhangelskaya 380 149 381 1231
Vologodskaya 768 180 388 1178
Leningradskaya 811 199 782 2149
Total 1959 528 1551 4558
Fuel mix in heating
1/11/2012 20 © Finpro
Oblast
Total number of companies
(boilers’ operators)
Number of companies using boilers running on:
Gas Diesel/ Fuel Oil
Coal Firewood,
chips Other
Arkhangelskaya 149 16 6 23 54 10
Vologodskaya 180 32 3 19 63 1
Leningradskaya 199 105 39 32 11 13
Total 528 153 48 74 128 24
Gas 36%
Diesel/fuel oil
11% Coal 17%
Wood/chips 30%
Other 6%
Share of companies using boilers on different types of fuel
Fuel mix is different in the studied areas: for Vologodskaya and Arkhangelskaya Oblasts leading position has
wood/chips, for Leningradskaya Oblast the leader is gas
Consolidated data
Gas 15%
Diesel/Fuel Oil
5%
Coal 21% Wood/
Chips 50%
Other 9%
Arkhangelskaya Oblast
Gas 27%
Diesel/Fuel Oil
3%
Coal 16%
Wood/Chips 53%
Other 1%
Vologodskaya Oblast
Gas 52%
Diesel/Fuel Oil 19%
Coal 16%
Wood/Chips 6%
Other 7%
Leningradskaya Oblast
Companies planning boiler investments
1/11/2012 21 © Finpro
Oblast Replacem
ent Further
operation Repair Total
Replacement
Further operation
Repair
Arkhangelskaya 34 29 10 73 47% 40% 14%
Vologodskaya 33 33 16 82 40% 40% 20%
Leningradskaya 44 42 50 136 32% 31% 37%
Total 111 104 76 291 38% 36% 26%
0%
10%
20%
30%
40%
50%
Replacement Further operation Repair
Arkhangelskaya Vologodskaya Leningradskaya
• Share of companies that are planning to replace
existing boilers is rather big (about 40%).
• These companies are candidates for the opportunities
study
0%
10%
20%
30%
40%
50%
Replacement Furtheroperation
Repair
Total
Further operations in existing boiler houses (based on the processing of interviews’ memos)
Search for opportunities – potential
companies planning investments
3 groups of potential end-users that are in interest to improve existing power/heat supply system and
could be the customers of Finnish products and services in power and heat supply.
1/11/2012 22 © Finpro
Group 1 – owners of CHP
plants, both large and small
They need to decrease cost of
power/heat
All of them were identified above
• We carried out the desk-study
• Excluded companies having
boilers running on natural gas
• Interviewed to identify interest
to Finnish technologies or
services
Group 2 – owners of boiling
houses
They need to decrease cost of
supplied heat
• All of them should be identified and
prioritized during desk-study and
interviews
• Then the most interesting
companies should be interviewed
in details to identify interest to
Finnish technologies or services
and financial resources
Group 3 – Regional and
municipal authorities
• They are responsible for
reliable heat supply to the
voters and Federal Government
• They have to spend budgets for
subsidies for heating
• They are actual owners of
hundreds of municipal boilers
• Responsible persons were
identified and interviewed
during field study
Summary of identified opportunities
The study focused to identify projects which substitutes oil with wood and peat,
reconstruction of old wood and peat plants as well as building of new wood and
peat firing plants in NW Russia
The study identified and described the following projects:
• 5 projects with existing financing to be realised in 2012 – 2014
• 12 projects, which should be financed during 2012
• 3 case studies
• Upgrade of district heating of the City of Arkhangelsk
• Upgrade of district heating system in several districts of the
Arkhangelskaya region
• Building of a new peat power plant and reconstruction of boiling houses in
the Chadoga district
• The opportunities are described in detail in the report, which is available on
request
1/11/2012 23 © Finpro
Conclusions
• The NW Russian heating facilities are obsolete and in need for major
investments.
• The heat reform has not been finished and, thus, the applicable heat
tariff levels do not yet support wide scale commercial investments to
the municipal sector
• Thus, still the most lucrative clients for Finnish technology are the
private companies, sawmills, pulp and paper mills and other industrial
producers
• However, the municipal sector represents huge potential with
hundreds of boiler houses and DH networks in desperate need for
replacement and / or renovation
1/11/2012 24 © Finpro
Hannu Kivelä
Leading Consultant,
Energy, Environment and Forestry
Porkkalankatu 1, FI-00180 Helsinki
Mobile: +358 40 343 3354
www.finpro.fi
Contact:
Thank you!