Russian Grid to See Investment of $31 Billion

Russia’s Federal Grid Company (FGC), the operator and manager of Russia’s unified electricity transmission grid system, has announced a programme of investment totalling RUB 952.4bn ($31bn) covering a five year period from 2010 to 2014.

The programme provides for high-scale construction and renovation of the electricity grid, removal of network restrictions, technological connection and providing network capacity for newly built power plants throughout the country.

The new five-year investment programme has already been approved by the Energy Ministry of Russian Federation. It was developed from the previously adopted investment plan for 2010-2012 as part of the Federal Grid’s transition to five-year regulatory period.

Investment programme will include the construction of 73 new substations with wattage of 220-500kW and total capacity of 89,180 MVA and the construction of 123 new high-voltage power lines with wattage of 220-750kW and total length of circa 21,000 km.

Around one thirds of the investment will be aimed at renewing existing transmission assets with the remainder paying for new construction.

Oleg Budargin, Chairman of the Management Board of Federal Grid, commented, “This is a unique and carefully designed investment programme that will help to modernize Russia’s high-voltage electricity grid and bring it in line with the rapidly increasing electricity demand in the growing Russian economy. We aim to cut over half the number of unconnected generating assets, considerably reduce the possibility of system faults, provide transmission capacity for c.23 GW of newly commissioned power generation and remove technological restrictions to power transmission within the system.”

The investment programme will be financed mainly from the company’s own funds and borrowing, as well as a comparatively small contribution from government funding and technological connection fees.

The main elements of the investment programme include the following:

- Renewal of fixed assets
- Development of backbone network in Russian regions
- Network extension and upgrade as part of the federal priority development programmes (including Sochi Olympics)
- Provisioning for the capacity of nuclear, hydro and thermal plants
- Upgrading grid facilities in Moscow, St. Petersburg and Tyumen region