Update on the RFE Energy Sector and the RFE LEAP Modelling Effort

Olga DEMINA, Natalia LOMAKINA, Alexey NOVITSKIYEconomic Research Institute, Far Eastern Branch,Russian Academy of Sciences, Khabarovsk, Russia

2010 East Asian Science and Security Project Meeting “Energy Futures and Energy/Minerals Cooperation in the Northeast Asia Region” September 22-24, 2010, Tsinghua University, Beijing, China 1

Outline

1. RFE’s Energy Sector: Current Status, Energy Demand & Supply Trends

2. Recent National and Regional Energy Policy Initiatives and Priorities

3. Large-Scale Energy Projects in the Far East of Russia4. Russia and Far East Nuclear Power Sector5. RFE Team’s LEAP Activities

2

1. RFE’s Current Status, Energy Demand & Supply Trends

3

National Energy Sector: main trends in between the two crisis periods

• Energy sector share in the russian economy (2008): about 25% of GDP, more than 48% of total taxes, more than 68% in total export income and 28% in total investments.

• GDP Energy intensity decline (2000-2008): total GDP growth 65%, extraction and production of energy resources growth - 26%, energy intensity of GDP - 66,9%.

• Positive production growth rates (2000-2008 ): increase in production of major energy resources – coal by 68 mln ton (26,4%), oil by 164 mln ton (50,6%), natural gas by 80 bln cubic m (13,7%).

• Strengthening of external incentives for development (2000-2008): Domestic consumption of energy grew 10%, energy exports volume 1,5 times (from 545,4 mln tce to 813 mln tce).

4

Energy sector of Russian Far East.Characteristics of Energy and Fuel Supply Macro-structure

• Energy consumption is relatively small by size and spread over large territory;

• Increased transaction costs for production and supply of energy;• Independent supply and consumption within many local territories;• Lack of developed transit and distribution infrastructure;• Energy consumption structure is relatively diversified but primarily

based on coal;• Limited choice opportunities for energy consumers;• Prefferability of monopoly structures in the supply sector.

5

Far East energy sector.Major energy production centers

• Sakha republic (Yakutia) (bituminous coal, natural gas)• Sakhalin region (oil, natural gas) • Amursky region (hydro energy)

6

Far East Energy Sector.Major export commodities

• Coking coal and steam coal of South Yakutia• Sakhalin oil• Oil products of Khabarovsky region refinery plants • Amur region electricity supplies to border regions of

China.

7

Energy Supply in the Russian Far East: Current Trends

 Energy Production* 2005 2006 2007 2008

Volumes as of 2008

Electricity 101.2 100.8 98.5 102.9 41.7 trillion kWh

Heat 98.1 101.7 100.2 97.3 67.8 mln Gcal

Crude Oil, including

Condensate 111.5 147.8 231.7 89.4

13.6 mln tones

Natural Gas 97.9 109.0 208.8 121.0 9.8 bln cubic m

Coal 102.6 99.1 99.6 100.9 32.3 mln tones

Oil Refining 115.8 101.3 106.2 102.8 11.3 mln tones

* % to previous year

8

Major energy resources extraction dynamics in the Far East2000-2008

2000 2003 2004 2005 2006 2007 20080

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2000; Coal, th. t; 28,352

2003; Coal, th. t; 30,625

2004; Coal, th. t; 31,757

2005; Coal, th. t; 32,699

2006; Coal, th. t; 32,199

2007; Coal, th. t; 32,032

2008; Coal, th. t; 32,284

2000; Oil, th. T; 3,707

2003; Oil, th. T; 3,573

2004; Oil, th. T; 3,902

2005; Oil, th. T; 4,351

2006; Oil, th. T; 6,539

2007; Oil, th. T; 15,2312008; Oil, th. T;

13,627

2000; Gas, mln CM; 3,496

2003; Gas, mln CM; 3,629

2004; Gas, mln CM; 3,5722005; Gas, mln CM;

3,5122006; Gas, mln CM;

3,866

2007; Gas, mln CM; 8,055

2008; Gas, mln CM; 9,753

Coal, th. t Oil, th. T Gas, mln CM

9

Structure of installed capacityRussia vs Russian Far East

Type RUSSIA FAR EAST

mln kWt % mln kWt %

Coal TPP 62032 27.5 6763 46.6

Gas TPP 89946 40 1284 8.8

Oil TPP 3102 1.38 1312 9

Nuclear PP 23304 10.3 48 0.3

Hydro PP + RE 47156 21 5115 35

TOTAL 225541 14522

10

Final Energy Consumption structure by type of energy 2000 vs 2008

2000

2008

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00%

2000; Coal; 5.74%

2008; Coal; 4.69%

2000; Oil products; 30.64%

2008; Oil products; 43.84%

2000; Natural gas; 4.44%

2008; Natural gas; 3.58%

2000; Electricity; 16.65%

2008; Electricity; 14.63%

2000; Heat; 41.78%

2008; Heat; 33.33%

Coal Crude Oil Oil products Natural gas Other hard fuels Electricity Heat

11

Power Plant Fuel Consumption structure by type of fuel in 2002, 2007—2008.

Russia Far East

Other

Natural Gas

Fuel Oil

Coal

0% 10% 20% 30% 40% 50% 60% 70% 80%

Other; 2002; 2%

Natural Gas; 2002; 67%

Fuel Oil; 2002; 5%

Coal; 2002; 26%

Other; 2007; 3%

Natural Gas; 2007; 71%

Fuel Oil; 2007; 2%

Coal; 2007; 24%

Other; 2008; 3%

Natural Gas; 2008; 69%

Fuel Oil; 2008; 2%

Coal; 2008; 26%

2008 2007 2002

Other

Natural Gas

Fuel Oil

Coal

0% 10% 20% 30% 40% 50% 60% 70% 80%

Other; 2002; 0%

Natural Gas; 2002; 15%

Fuel Oil; 2002; 11%

Coal; 2002; 74%

Other; 2007; 0%

Natural Gas; 2007; 20%

Fuel Oil; 2007; 10%

Coal; 2007; 70%

Other; 2008; 0%

Natural Gas; 2008; 22%

Fuel Oil; 2008; 9%

Coal; 2008; 69%

2008 2007 2002

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Emissons of pollutants into atmosphere as result of fuel based power and heat production

2008 (thousand ton)

  Total emission

PollutantsHard

particlesSulphur dioxide

CO2 Nitrogen oxides

Сarbohydrates

Russia 5763,6 1615,3 1663,3 1233,1 1221,2 30,7

Far East 724,9 246,7 171,3 206,5 92,9 7,5

Share of Far East in Russia,

%

7,95 15,2 10,2 16,7 7,6 24,4

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Positive trends in the development of Far East Energy Sector(2004-2008)

• New electricity generating capacity added: Bureyskaya HPP, 4th unit of Khabarovsk CHP-3, Mobile gas turbine plant at Vladivostok CHP-2. A network of transmission lines 500 kW.

• Settled structure of strategic companies-operators and baseline terms for operation of the basic regional fuel and energy markets.

• GDP growth does not lead to high demand of energy. The balance of energy output and capacity in the Eastern United Power Grid and local energy systems is satisfactory.

• Improved balance of supply and demand of boiler and furnace fuels

14

Strategic Problems

• Technological and economical isolation of Far East energy systems from the national energy and capacity markets is unchanged. Mechanisms of strategic control over energy sector are at the stage of development.

• Deterioration (wearoff) of energy equipment and facilities (about 70% of equipment is physically and technologically old).

• Unstable operation of community energy services• Isolated energy supply in northern regions of Far East, caused

by geographic and economic conditions, lowers the economic efficiency and technological stability of energy supply.

• Lack of deep consideration of regional development problems during the implementation of large-scale projects, with regard to the pacific direction of energy resources export .

15

Economic crisis impact on FE energy sector

• Electricity consumption decline in Russia – by 4.7%, in Far East – by 1.65% and dynamics was mixed, depending on the region. Recovery since late 2009.

• Production of major energy resources in 2008 compared to 2007: oil – reduced by 11%, gas – increased by 21%, coal – up by 4%.

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2. Recent National and Regional Energy Policy Initiatives and Priorities

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OTHER:– Scheme of the complex development of productive forces, transport and

energy of Republic of Sakha (Yakutia) until 2020 (approved 2007)

The system of official strategic and program documents

1.General social & economic development strategies and programs in the Far East

Strategy for economic & social development of the Far East and Baikal region up to 2025 – approved December, 2009

Federal Program for Social and Economic Development of the Far East and Trans-Baikal area up to 2013 (underway since 2008)

18

General scheme of the gas industry

development until 2030

(under development)

General scheme of electric power

industry installations until

2020(approved!)

General scheme of development

of the oil industry 2020

(under development)

Eastern Gas Program Program of creation of the unified system of gas production, transport and gas supply in East Siberia and the Far East with potential gas export to the markets of China and other APR countries

(approved 2007)

Program of long-term development of Far East energy sector until 2020

(under development)

Strategy for development of electric power industry in the Far

East until 2020-2025(not yet approved)

ENERGY STRATEGY OF RUSSIA UNTIL 2030 (APPROVED NOVEMBER 13, 2009)

NATIONAL LEVEL

REGIONAL LEVEL involving FAR EAST

National Energy Efficiency Program(waiting

approval)

Corporate Strategies and Programs

The system of official strategic and program documents2. Energy related development strategies and programs

19

Strategy for development of nuclear power

industry of Russia until 2007-2015

(approved 2007)

NATIONAL ENERGY POLICY PRIORITIES MAIN DOCUMENT: ENERGY STRATEGY OF RUSSIA UNTIL 2030

ONE OF MAJOR PRIORITIES: “Eastern orientation”

1) Diversify energy export destinations and commodity structure • Oil export share to APR will rise from 8 to 15% by 2022• Gas export share – from 0% to 16%• New Oil and Gas processing in the Far East (Yakutia, Primorsky region, Sakhalin)

2) International cooperation and strengthening positions of national companies abroad

• Joint exploration, extraction, processing and distribution: ROSNEFT, LUKOIL, GAZPROM & CNPC, SINOPEC, KOGAS, KNOC, etc.

• Asset swapping approach (?)

3) Energy efficiency• Decrease GDP energy intensity by 40% in 2007-2020

4) Increase the share of renewable energy (in the total electricity production from 0.5% to 4.5% by 2030)

5) Switching to export of final energy products rather than raw

20

SUPPLY SIDE EFFICIENCY IMPROVEMENTSCOAL PP 34 38%GAS PP 38 50%NUCLEAR PP 32 34%

Decrease overall tce/kWth 335 300 gCOAL GASIFICATION technologyMore gas turbines with 51-57% efficiencyDecrease Electricity Transmission Loss 13 10%

MAIN DOCUMENT: FEDERAL LAW ON ENERGY EFFICIENCY (NOV 23, 2009)

NATIONAL ENERGY EFFICIENCY PROGRAM UNTIL 2020 (not yet approved)

ENERGY EFFICIENCY as a national priority

REGIONAL ENERGY EFFICIENCY PROGRAMS in regions of FAR EAST are under development!

21

22

ENERGY SECTOR;

Energy Ef -ficiency

Potential; 0.36; 37%

HOUSE-HOLDS; En-

ergy Effi-ciency Po-

tential; 0.18; 18%

INDUSTRY; Energy Ef -

ficiency Potential; 0.14; 14%

TRANS-PORT; Energy

Efficiency Potential; 0.13; 13%

CON-STRUCTION

& SER-VICES; En-ergy Effi-

ciency Po-tential;

0.09; 9%

FEDERAL PROPERTY; Energy Effi-ciency Po-

tential; 0.05; 5%

AGRICUL-TURE SEC-

TOR; Energy Efficiency Potential; 0.035; 4%

Energy Saving Potential - 420 million tce

ENERGY SECTORHOUSEHOLDSINDUSTRYTRANSPORTCONSTRUCTION & SERVICESFEDERAL PROPERTYAGRICULTURE SECTOR

23

World av

erage

Italy

Great Brit

ainJap

an

German

y

Sweden US

Finlan

d

Canad

aRussi

a

Ukraine

Kazakh

stan

0

0.1

0.2

0.3

0.4

0.5

0.6

GDP energy intensity, toe/$1000Target: decrease by 40% in 2008-2020

Far East Energy Demand: prospective changesExpected new large-scale projects

Amur region• National space port• Ore Mining and Smelting Plant• Oil Refinery• Aluminium plant• Olekmin hydrometallurgical processing plant• ESPO expansion (including branch to China)• Kuranah iron ore deposit• Cement plant

Jewish Autonomous region• Kimkan-Sutar iron ore deposit• Bridge over Amur river• Timber processing facilities

Magadan region• Natalka,Degdekan, Pavlik, Igumen deposits• Yano-Kolim gold mining area• Several mining facilities

Sakhalin island

• Cement plant• Metal processing facilities• Oil and Gas Processing facilities

Primorsky region

• Russkiy island projects• Oil refinery (Nakhodka city area)• ESPO - 2nd part• Kozmino oil port facilities

Yakutia• Oil and Gas deposits (Talakan, Chayanda)• Elga coal deposit• Elkon Uranium deposit• Kuranah and other iron ore deposits

Khabarovsky region• Khabarovsk and Komsomolsk oil refinery expansion • Oil processing facilities• Coal enrichment plant• Ore enrichment facilities • Cellulose plant

24

RFE Energy Cooperation with ChinaOIL ROSNEFT-CNPC 48.4 mln t contract for 2006-2011

+LUKOIL-SINOPEC 3mln t contract for 2009-10+export of oil products: fuel oil

2011-2031 ROSNEFT-CNPC 15 mln t/y (may be increased to 30 mln t/y)Transported by ESPO pipeline via branch “Skovorodino-China”

GAS Price negotiations to finish in 2010-2011Possible start of export via “eastern” route – by 2015Via “western” route– by 2018 Source - Yakutia gas deposit

COAL 2008 – 0.76 mln ton exported, 2009 – 12 mln ton exportedMay increase after 2013 due to ELGA coal project (up to 27 mln t/y)Main supplier – MECHEL

ELEC-TRICITY

2009 – 0.8 bln kWth exported2010 forecast – 1 bln kWthFrom 2013– 4-5 billion, By 2020 – up to 60 billion kWth

OTHER 13 mln t Joint Refinery in Tianjin, China + 500 petrol stations ($5 bln)10 mln t Joint Refinery in Primorsky region, Russia – UNDECIDEDJOINT EXPLORATION: Veninsky block (ROSNEFT+SINOPEC)

RFE Energy Cooperation with JapanOIL Exported from Sakhalin-1 since 2006 and Sakhalin-2 since 1999

Total export in 2009 – 5.3 mln tSince 2010: start of export from ESPO pipeline

GAS Since 2009 - Sakhalin-2 (LNG) long-term contract for about 6 mln ton/y

COAL In 2009 - about 2mln ton exportedPossible expansion after 2013 (ELGA coal deposit)

ELEC-TRICITY

NA

OTHER Joint explorationLPG WIND PP (Russky island)

26

RFE Energy Cooperation with ROKOIL From Sakhalin-2 since 1999, From Sakhalin-1 since 2006

Possibly ESPO and/or oil products after 2014

GAS In 2009 – 0.6 mln ton LNG, Since 2010 – 1.5 mln ton/y LNGSource: Sakhalin-2

Prospective: Vladivostok-South Korea gas pipeline - since 2014 up to 10 BCM

COAL Since 1996 small volumes from EREL depositSince 2010 – 5 year contract 0,3 mln ton/ySince 2010 – 5 year contract 1,3 mln ton (HYNDAY+POSCO)Possible expansion after 2013 with ELGA coal deposit

ELEC-TRICITY

Primorsky region-Korean Peninsula power exports project – JSC “INTER RAO UES” + KEPCO*stopped since 2009 due to DPRK issues

OTHER Joint exploration of West Kamchatka ShelfJoint development of South Yakutia coal mines (Kolmar – LG)

27

3. Major Large-Scale Energy Projects in the East of Russia

1. Sakhalin projects2. ESPO pipeline

- Taishet-Skovorodino (stage 1) – complete!- Skovorodino-Kozmino (stage 2) – under construction- Skovorodino-China border – complete!

3. Eastern Gas Program in the Far East - 2 major gas pipelines• Sakhalin-Khabarovsk-Vladivostok• Yakutia – Khabarovsk• Vladivostok-Korean Peninsula – ???

4. Gas processing, gas liquidation and chemical processing facilities (Yakutia, Primorye)

5. “Elga” large coal deposit (Yakutia)6. Electricity exports to China

28

Sakhalin-1• Deposits: Chaivo, Odoptu, Arkutun-Dagi (oil - 300 mln tons, gas –

485 bln cub m)• Participants: ExxonMobil (30 %), ROSNEFT, ONGC (20 %), SODECO

(30 %)• Chaivo oil and gas production started in October 2005; oil exports –

since October 2006• Since 2007 – oil production at full capacity• Currently: Oil exported to Japan, South Korea; Gas supplied to

Khabarovsky region• 2009: total produced oil 8,2 mln ton, gas 9,4 bln cub m;

Target for 2010 – 7,5 mln ton• Expectations: Odoptu start of oil production – end of 2010 (up to

1.5 mln t/y); Arkutun-Dagi – since 2014.

29

Sakhalin-2

30

• Deposits: Piltun-Astohsky and Lunsky oil & gas fields (oil - 176 mln tons, gas - 618 BCM)

• Shareholders: Gasprom (50%+1), Royal Dutch Shell (27.5% minus 1), Mitsui (12.5%), Mitsubishi (10%)

• Since December 2008 - oil extraction is year-round; for 2010 target ~7 mln ton

• Feb 2009 – first LNG production line was launched, May 2009 – second line was launched, current LNG capacity 9,6 mln t/y

• Since March 2009 – LNG is exported (long-term contracts ~25 years) mainly to Japan (~60%), ROK, but also to China, India, Kuwait, Taiwan

• 3rd production line or 2nd LNG plant are under consideration

Other Sakhalin offshore• Sakhalin-3

– Veninsky block - currently: exploration (ROSNEFT + SINOPEC) - 165 mln t and 313 BCM– Kirinsky gas deposit – geological exploration by Gazprom, start of gas production in 2011

• Sakhalin-4 (West-Shmidtovsky block)– In March 2009 ROSNEFT & BP returned license after unsuccessful drilling - deposits not

discovered yet

• Sakhalin-5 (Kaigano-vasyukansky & East-Shmidtovsky)– East-Shmidtovsky: In 2009 after conducting geological analysis ROSNEFT & BP returned

license without drilling – deposits not discovered yet– Kaigano-vasyukansky: geological exploration (ROSNEFT & BP) – 56 mln ton of oil and 30

BCM of gas discovered so far – not enough for commercial extraction

• Sakhalin-6 (Pogranichny block)• Western shelf of Kamchatka peninsula (ROSNEFT & KNOC)

• In 2009 licenses for exploration granted to Gazprom – Sakhalin-3 (Kirinsky, Ayashsky, West-Odoptinsky blocks)

31

Far East Offshore Oil & Gas Projects

Sea of Okhotsk

Kamchatka offshore area

Kamchatskaya Oblast’

Magadanskaya Oblast’

SAKHALIN-6

SAKHALIN-5 Kaigansko-

Vasyukanskiy

Ayashskiy

Vostochno-Odoptinskiy

Veninskiy

Kirinskiy

SAKHALIN-5 Vostochno-

ShmidtovskiySAKHALIN-3

Хабаровскийкрай

Magadan offshore area

Western Kamchatka place

Khabarovsk offsh

ore area

Sakh

alin

SAKH

ALIN

-1

Chaivo

Arkutun-Dagi

Odoptu

SAKHALIN-4 Zapadno-

Shmidtovskiy

Khabarovskiy Krai

PACIF

IC O

CEANPil’tun-

Astokhskoe

SAKH

ALIN

-2

Lunskoe

- Page 32

Eastern Siberia – Pacific Ocean Oil Pipeline (ESPO)

1st STAGE – completed in 2009• Route: Taishet (Irkutsky region) – Skovorodino (Amursky region)• Capacity is 30 mln ton/y• Current operating capacity – 15 mln ton/y• Currently transported to Kozmino by RAIL for export to Japan, Korea.

2nd STAGE – will be completed by 2014 (till then – by RAIL)• Route: Skovorodino (Amursky region) – Kozmino Oil Port (Primorsky krai) – 2100km• Overall ESPO capacity is 30 mln t/y, possibly up to 50• Expansion of Kozmino Oil Port

Branch to China• In 2009 oil export contract signed for 15 mln /t for 20 years since 2011• Skovorodino-China Border - complete in August 2010• Daqing (China) -China Border – will complete in October 2010• Start of operation – November 2010

33

Eastern Siberia – Pacific Ocean Pipeline

34

Eastern Gas Program

Underway since September 2007

4 centers of gas extraction: Northern Sakhalin, South-Western Yakutia, Irkutsk area and Krasnoyarsk area

In the Far East - 2 major pipelines

Gasification of Far East territory (local gas pipeline networks)

Gas Liquidation and Processing Centers (Yakutia, Sakhalin, Primorsky region)

Large expansion of gas exports eastwards

Creation of integrated system for producing and transporting gas in East Siberia and Russia's Far East with the possibility of exporting gas to China and other Asia-Pacific countries

35

Eastern Gas Program (underway since 2007)

Ultimately - export of ~50 BCM of natural gas to China and Republic of Korea

36

1. Sakhalin-Khabarovsk-Vladivostok• Construction started in July 2009• Will start operation in Q3 2011 , Capacity - 6 BCM m3• Full expected capacity – 35 BCM by 2016• Primary Source: Sakhalin-3 (Kirinsky block, Gazprom) – since

2014• Primarily for domestic demand of Far East

2. Yakutia-Khabarovsk• Will be constructed in 2012-2016 and joined with Sakhalin-

Khabarovsk-Vladivostok pipeline• Capacity: up to 25 BCM• Primary Source: Chayanda gas deposit in Yakutia, start supply

in 2016• Gas supply primarily for exports

Eastern Gas Program: Planned Gas Pipelines

*Vladivostok-Korea Peninsula pipeline project (Gazprom & Kogas signed agreement in 2009, route research is underway) 37

“Elga” Coal Deposit

• Coking coal deposit of 2 billion ton• License granted to “Mechel”• By 2011 “Mechel” will complete the construction of

railroad access – 315 km, $1.3 bln• Production will start in late 2010• Target for 2011 – 1 mln ton, since 2013 – 9 mln ton• By 2018 will reach final output target of 27 mln t/y

38

Prospective Electricity Exports

CHINA• In 2006 – 523 million kWth, then paused from Feb 2007-March 2009• In 2009 - 800 million kWth exported• In 2010 forecast – 1 billion kWth• From 2013 – 4-5 billion kWth• By 2020 – up to 60 billion kWth

OTHER• PRIMORSKY REGION - KOREAN PENINSULA• SAKHALIN- JAPAN

Gas Turbine Power Plant, export via cable under sea

39

LARGE-SCALE ELECTRICITY EXPORT TO CHINA

Possible export volume – 60-70 billion kWh in 2020

40

4. Russia and Far East Nuclear Power Sector

41

Russia’s Nuclear Power Sector Bilibinskaya NPP

(2008)Russia: 10 NPPs, 31 power units with total capacity of 23,3 GW (10.3% that of Russia), electricity production of 163.1 bln kWh (15.7% that of Russia)

– 15 Pressurized water reactors (9 VVER-1000 & 6 VVER-440)– 15 Boiling Water Reactors (Channel type, 11 RMBK-1000 & 4 EGP-6) – 1 Fast Breeder Reactor BN-600

42

Bilibinskaya NPP – CHP • Single small Russia’s NPP of public

utility • Provides ~30% of electricity & heat

supplies in Chukotka, ~0.4 % of those in the RFE

• Actual Capacity Factor 39.1%, • 4 EGP-12 reactors (G-I) were

commissioned over 1974-1976

Lifetime period of the units as designed had to be completed in 2004-2006 After auditing the lifetime period was prolonged up to 2019-2021 (subject to

unit) Based on the Federal Program on Nuclear Energy Sector Development up to 2015

it is scheduled to decommission BNPP over 2019-2021

43

Nuclear Energy Development in the RFE

• Based on General Plan for Electric Power Industry up to 2020 it is planned to construct two NPPs in the RFE over 2016-2020– Pevekskaya Floating NPP with 70 MW (KLT-40S) to replace Bilibinskaya NPP

in Chukotskiy Autonomous Okrug– Primorskaya NPP with 600 MW (2 x VBER-300) to meet the increase in

domestic power & electricity demand • Primorskaya NPP could be constructed by IPP to supply New

aluminum plant planned in Primorskiy Krai • Up to 2016 in Russia it is planned to produce 7 KLT floating

reactors.

44

Pevek and Chersky Floating NPPs

• Capacity 70 MW ×4• Expected period of

construction 2016-2020

45

Floating NPP

46

• Length: 140, Width: 30, Height: 10• Construction period: 4 years• Capacity: 70 MWt (power), 50 MWt (heat)• Power Output: 455 mln kWt/y• Heat Output: 350 000 Gcal/y

YakutiaThe investment plans of placing Floating NPP at 4 sites:-Tiksi;-Ust-Kuiga;-Chersky;-Yurung-Khaya

47

Floating NPP comparative efficiency

Floating NPPefficiency

Comparative costs of electricity and heat production

Ratio of costs based on fossil fuel to those of Floating NPP

Electricity Heat

Tiksi 3,54 2,53Ust-Kuiga 6,2 3,6Yurung-Khaya 5 2,9Chersky 7,13 4,3

Production costsNPP unit 12 MW 2,64 rub/kWth 936 rub/GcalNPP unit 70 MW 1,85 rub/kWth 936 rub/Gcal

48

Elkon uranium ore deposit•Estimated capacity up to 5,000 tons of uranium per year.•Investment in the project are estimated at 90.5 billion rubles• Construction on the field will start in late 2010 - early 2011.

49

5. RFE Team’s LEAP Activities

50

RFE’s Team Modeling Activities

Goals set in 2007 To complete properly of conversion

dataset used from LEAP2004 to LEAP2008

To move to new base year (2002 2006)

To integrate possible nuclear energy facilities into “Nuclear Max” Energy Path

To model final energy demand in the context of large-scale energy-intensive projects (the problem of incorporation)

LEAP modeling in 2010 Transforming LEAP2004 dataset to

LEAP2008 New base year 2008 Partially disaggregate final demand

by industries Changes to Transformation Considered three alternative

scenarios: Reference ScenarioResource-transit ScenarioEnergy Efficient Scenario

51

RFE Energy Supply

• Adjustments to the supply (transformation) structure- RFE divided into: North, South and Sakhalin

• Updating to 2008 base year• Addition/correction of large-scale energy supply projects• Addition/correction for exports

52

RFE Energy Demand

Sectors: manufacturing, population, transport, public sector, service sector.

Manufacturing, transport, service sector: with fuel demand for subindustries.

Population and public sector : with fuel demand by geographic area for heat and electricity.

53

RFE Final Energy Consumption (2008)manufacturing;

Series1; 955954.10599999

9; 8%

population; Se-ries1;

5207462.362912; 44%

transport; Series1; 3666755.0937668

9; 31%

public sector; Se-ries1;

1784217.606036; 15%

service sector; Series1;

107662.471; 1%other; Series1; 41947.535; 0%

manufacturing population transportpublic sector service sector other

54

LEAP modeling: Reference Scenario

• Moderate economic growth (4-5%)• Slowing of population decrease• Average annual growth rate of energy

consumption – 2.8%

55

LEAP modeling: Resource-Transit Scenario

• Active economic growth (7-8%)• Stabilization of population• Implementation of all large export projects currently

planned• Significant growth of extraction and processing of regional

natural resources (petroleum, gas, coal, ores, metals, forestry, fisheries).

• Stronger cooperation between Far East and APR countries• Average annual growth rate of energy consumption - 4,2%

56

RFE new added power capacity by 2020, MWt

REFERENCE RESOURCE-TRANSITRFE NORTH

HYDRO +2670 +1500NUCLEAR +70 +176

RFE SOUTH (UES VOSTOK)COAL PPs +3600 +2640HYDRO +621 +200NUCLEAR +600

SAKHALIN REGIONCOAL PPs +900GAS PPs +800

TOTAL +7561 +6216

57

RFE Prospective Energy Supply

2008 (fact) by 2020-2022 2030

OIL PRODUCTION,

mln ton

13.8 30-31 32-33

GAS PRODUCTION,

BCM

9(incl. Sakhalin -7)

65-67(36-37)

85-87(50-51)

COAL PRODUCTION,

mln ton

32 39-46 44-57

58

Energy-efficient scenario• Key social & economic indicators are similar with that of

Resource-Transit Scenario.

• Supply side:– Higher efficiency of PPs – new construction & replacement (coal

44%, gas 50%, nuclear 34%)– Decrease electricity transmission loss to 10%– Maximum renewable energy (possibly up to 4.5%)– Maximum nuclear energy

• Demand side:– Decline in energy intensity in ALL sectors according to targets set in

the National Energy Saving Program until 2020– The impacted sectors are: Industry, Households, Transport, Public

Sector, Service Sector 59

Thank you for attention

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