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Tuesday, March 13, 2018

Putin forbade the power companies to raise fares above inflation

The election campaign in Russia has not yet announced, but it has already begun. On Tuesday Vladimir Putin has warned of power, so they do not try to shift costs to the modernization of thermal power plants to consumers. To reassure business and the public, FAS proposes to establish a long-term energy tariffs, and to prohibit the governors to adjust them on your own.

photo: kremlin.ru
President explain how to upgrade generating capacities.

Russia is a harsh country. Central heat is not a luxury but a vital necessity. A cold battery can lead to extremely unpleasant for the authorities consequences. Meanwhile, by 2020 the average age of most thermal power plants are approaching 50 years, and some existing boilers and turbines, you can take in museums and landfills today: their lifespan exceeds 60, 70 and even 100 years. Despite the fact that in 2010 Russia’s energy sector is experiencing an investment boom, built from the ground power units provide only 15% of the capacity of the power system. “The problem of aging equipment remains acute,” he admitted at a meeting the Minister of energy Alexander Novak. On large-scale construction project neither time nor money in power engineering, no: not showered system, 60% of generating capacity must be replaced by 2030. Therefore, it was decided to focus on the modernization and reconstruction of existing stations.

— The priorities of the new long-term program — withdrawal from circulation and replacement of outdated and inefficient equipment, implementation of resource-saving technologies and capacity development on the basis of more reliable installations — listed Vladimir Putin.

Modernization projects are cheaper than building from scratch: no need to build infrastructure and capital facilities. According to specialists, the costs of upgrading unit capacity of 100 MW will be about $500, whereas construction of a similar amount — $1000-1800. But easy program in any case will not be: all the work will lead with the running system. In addition, modernization in a period of 10 years shall be 40 GW of capacity — this will result in a huge amount need somewhere to take.

Vladimir Putin has warned that energy do not try to shift their costs to consumers:

— Investment in new generation should lead to lower operating costs. And therefore, I want to emphasize this, the capital cost should not fall on the shoulders of consumers, businesses, citizens, social and state institutions. Must fit into the existing procedure of formation of the electricity tariffs.

According to the head of the Federal Antimonopoly service (FAS) Igor Artemyev, to ensure stability in the modernization will allow the transition to long-term forecasting. “We are ready to establish a ten-year forecast of rates. For example, on a rail by 2025, the rate will be set according to the scheme “inflation minus 0.1%”. The same can be offered to the energy sector,” — said Artemyev. Moreover, the FAS proposes to deprive the regional authorities the right to adjust the electricity tariffs at its own discretion: “And it turns out that the increase set at 4%, and in the regions of you people in payment orders show an increase of 17%, 20% or, as recently in Zabaykalsky Krai, 76%”, — said the head of Antimonopoly Department. According to him, the presidential Administration in August was sent amendments that would put an end to the arbitrariness of the regional authorities to adjust the average level of tariffs they are allowed only with the consent of the Ministry of energy and FAS, and after providing appropriate justification. Artemyev asked Putin to support the bill, which, apparently, was lost in the bowels of the bureaucracy.

After the meeting Alexander Novak told reporters that during the implementation of the program of modernization of the electricity tariffs for consumers will not be above inflation. The Ministry of energy has any ideas on how to attract investors and provide the necessary attachments are not encroaching on the pockets of citizens: they promise a refund within a period of 15 to 20 years and a “reasonable return” in relation to the securities.

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