September 6, 2019. Vladivostok, Russia. PJSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces signing a number of agreements at the fifth Eastern Economic Forum in Vladivostok.
RusHydro and the Government of Sakha (Yakutia) Republic signed an agreement on development of Yakutsk heat supply system.
PJSC Yakutsenergo, RusHydro’s subsidiary, and municipal company JSC Teploenergia will form a joint venture, acting as heat network organization with status of single regional heat supplier. Tariffs of the joint venture will include investment component aimed at increasing heat supply efficiency.
The agreement also provides for transition of Yakutsk into non-price zone of wholesale market of electricity starting from September 1, 2020, with heat tariffs to be set on basis of alternative boiler method. The method assumes determining heat tariffs via agreements between customers and heat supplier, as opposed to the government setting the tariffs directly. The tariffs are set within certain limits based on cost comparison of heat supplied by centralized network and alternative independent boiler.
The parties also agreed to cooperate on construction of the second phase of Yakutskaya GRES-2, including guarantees for heat offtake from the plant. The new plant with electric capacity of 157.4 MW and heat capacity of 200 Gcal/h is scheduled to enter service in 2025, will be located at the site of Yakutskaya HPP, to be retired. In July 2019, the plant was included in the list of thermal power plants to be built in non-price zones of the wholesale electricity and capacity market.
RusHydro and the Government of Magadan Region signed an agreement on cooperation for energy supply of the second phase of Pavlik Mining Project.
The cooperation relates to construction of the second phase of Pavlik gold mine with expansion of processing capacity to 10 mn tonnes of ore per year and organization of electricity supply of 65 MW. JSC Pavlik is planning to implement the project with off-budget financing by raising subsidies for infrastructure development, including grid construction. The estimated cost of the project is USD 300 mn.
The Ministry Development of the Russian Far East will support development of engineering infrastructure, including electric facilities. The Government of the Magadan Region is interested in support of gold mining in the region. Gazprombank will participate in financing expansion of the mine. RusHydro confirmed readiness to support Pavlik in connection of facilities under construction to Magadanenergo grid.
RusHydro and Osnova Holding signed an agreement on cooperation in ash and slag waste processing.
The cooperation aims at mitigation of environmental footprint of ash and slag waste of coal-fired power plants and reduction of costs, associated with it. The parties will consider establishment of facilities for production of construction materials based on ash and slag waste sourced from RusHydro Group’s coal-fired plants in the Far East Federal District.
Utilization of ash and slag waste has a number of advantages, including cleaner environmental, energy efficiency and conservation of heat and natural raw materials.
Osnova Holding Company has practical experience in implementation of turnkey projects of construction materials production from ash and slag waste. Osnova Holding will provide RusHydro support in technological issues and develop industrial scale facilities for production of construction materials, while RusHydro will supply required volume of ash and slag waste to these facilities.
Both parties express intent to participate in Association for support of industrial cluster for utilization and processing of ash and slag waste of coal-fired power plants and support regulatory initiatives in the sphere.
RusHydro and the Government of Primorsky Krai signed an agreement on cooperation in modernization of Vladivostokskaya CHP-2 and construction of Artyomovskaya CHP-2.
Both projects will be implemented within the framework of the governmental program for modernization of thermal generation capacity.
Vladivostokskaya CHP-2 with electric capacity of 497 MW has 6 turbines and 14 boilers, most of them gas-fired. Modernization of the facility will include replacement of the oldest turbines, installed in 1970-1972, as well as replacement of power transformers and upgrade of the automated control system. New turbines, manufactured in Russia, will have electric and heat capacity of 360 MW and 570 GCal/h respectively compared to current 283 MW and 506 GCal/h. Following modernization, the plant’s capacity will increase from current 497 MW of electric capacity and 1,051 GCal/h of heat capacity to 574 MW and 1,100 GCal/h, respectively. The new equipment will be installed stage–by-stage over the period of 2022-2025. Administration of the region will facilitate obtaining necessary permits and will provide for the load of the new equipment in the updated scheme of the heat supply of the city.
Artyomovskaya CHP-2 will replace Artyomovskaya CHP built in 1936. The new plant with electric capacity of 420 MW and heat capacity of 483 GCal/h will use coal from local mines. The greenfield project will be located several kilometers away from Artyomovskaya CHP. The project will be included in RusHydro’s investment program with the planned commissioning in 2026. Primorky Krai administration will help obtaining necessary permits and the city of Artyom administration will ensure heat offtake from the plant at a level no lower than the current load of Artyomovskaya CHP.
Oleg Kozhemyako, Governor of Primorsky Krai, underlined that modernization of Vladivostokskaya CHP-2 and construction of Artyomovskaya CHP are very important for reliable supply of electricity and heat to customers in the region.
Nikolay Shulginov, Chairman of the Management Board – General Director: “Development of energy infrastructure in Primorsky Krai and the Far East in general is a high priority goal for RusHydro. In 2018, we commissioned state-of-the-art Vostochnaya CHP in Vladivostok. Two of RusHydro’s four projects, Vladivostokskaya CHP-2 and Artyomovskaya CHP-2, for modernization and construction of thermal plants are located in Primorsky Krai. Both projects will use modern, efficient and environmentally-friendly equipment made in Russia. Implementation of these projects will ensure reliable supply of electricity and heat to customers and will foster conditions for further social and economic development of the region”.
RusHydro and the Government of Primorsky Krai signed an agreement on cooperation in development of electric transportation.
The fleet of electric vehicles (EV) is growing rapidly in Primorsky Krai, where one third of the entire Russian fleet of electric vehicles is concentrated. RusHydro and administration of Primorsky Krai will jointly implement a plan aimed at development of electric transportation, including public transportation such as electric buses.
The program will leverage experience of running a chain of charging stations, launched by RusHydro in Primorsky Krai on the eve of Eastern Economic Forum. The project was launched after market research confirmed high need in electric charging stations in the region. Opening of the first chain of charging stations in the Far East will not only cater to the existing demand for the service in Primorsky Krai, but establishes groundwork for future development of electric transportation in the Far East Federal District.
Ten charging stations have been installed in Vladivostok, Ussuriysk and Artyom. For convenience of car owners they are located near large shopping malls or traditional gas stations. The stations, installed by RusHydro, have the advantage of supporting fast charging regime, providing for top-up of the battery in a few minutes and full charge in less than half an hour. The stations also support a range of charging connectors, including: Japanese standard (DC) 50 kW, European standard (DC) 50 kW, connector Type 1/Type 2 (AC), 22 kW.
Decision on further development of charging stations chain in the region will depend on pilot operations of RusHydro’s charging stations in Primorksy Krai. RusHydro will consider opportunity to act as organizer of research to lay basis for roadmap of development of charging stations infrastructure in the region.
RusHydro and the Government of Amur Region signed agreement on cooperation
The Government of Amur Region will support RusHydro’s investment projects and current operations, including in the process of obtaining necessary permits in the spheres of urban development and utilization of natural resources.
The Government of Amur region will also provide support to the Company in implementation of long-term tariff policy, aimed at modernization and development of grid infrastructure. RusHydro’s proposals will be reflected in actualization of the Scheme and program of Amur region development for five-year period.
The Government of Amur region intends to assist RusHydro in increase of the heat offtake from Blagoveschenskaya CHP.
RusHydro will also consider participation in social projects in the region.
The information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of RusHydro. You can identify forward looking statements by terms such as the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially from these statements. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to RusHydro and its operations.