Projects

Analysis of the Russian Energy Agency data on energy production structure at selected regions: fuel utilisation and technical state as well as tentaive evaluation of the finaciability. The project would identify most realistic energy efficiency projects to be modernisized by Finnish companies  in St.Petersurg, Leningrad oblast, Carelia, Vologda and Murmansk regions .Improvement of energy efficiency in Russian economy is ‘ hot ‘ now. A lot of feasibility studies in this field has been made by Finnish companies and  just now thre is a huge interest to provide them in all regions of Russia. Commitment of local authorities is available now.  On the Finnish side, first time there are all Finnish energy actors around the same table, now, as a result of establishment of Finnish Russian Energy Club. The mission of the Club is based on the Finnish-Russian Govenments’ MoU for Energy Efficience Modernization.

The goal of the project  is to produce data to develop efficient working models in for Russian energy sector to support the energy SHOKs. The project is in line with the National innovation strategy and identifies opportunities for the Finnish energy sector knowhow and R&D solutions in the Russian energy sector. The project will identify the most lucrative and promising new business opportunities for the Finnish energy industry and energy technology providers. The project implements the MoU between the Finnish Ministry of  Employment and the Economy and Russian Ministry for Energy and Industry. The results would rank the projects, give an evaluation of the existing business potential, who is the project owner and give a tentative evaluation of financiability of the projects.

Next actions

• Finnish companies should not delay with their  products and services offers to potential customers described in the report.
   
  These projects are only the first of many that must be done to improve the efficiency of the Russian energy sector. Therefore we must carefully monitor the situation on the Russian market, including:
  •Changes in natural gas prices
  •Changes in regional policy, appearance of new rules in financing and new federal programs, mainly leading to  moving the population.
   
  Relations with Regional administrations should be established and constantly kept hot.
   
  Use of renewable energy is a priority. In the first place there is a revival of the peat development and fabrication of fuel on peat basis.
   
  Several long-term recommendations are listed below:
  The segment of the large CHP plants is well structured, the number of potential customers is limited. The main direction of development will be the implementation of combined cycles, and Finnish companies have to offer really unique solutions for these purposes.
  The Sosnovy Bor NPP will be built for several years more, and this project may also be a source of opportunities (Finex? Other companies?).
  •Small CHP plants are and will remain the traditional and the most prospective partners for Finnish companies. Now we can see the trend to use natural gas for heating and technological needs because the timber waste are used for pellets fabrication, but this tendency could be changed if the natural gas price will go up. Such a scenario may require technical solutions for the reconstruction of gas boilers to run on peat or pellets
  •Renovation of boiling houses mainly using RES will remain actual for several years. Actual projects should be identified in co-operation with Regional Administrations.
  •RES means peat mainly.
   
  The most effective multi-stage complex projects can be created jointly by Finnish companies and Federal and Regional authorities, and Finpro can assist in their organization

Key findings

The studied Region - Arkhangelskaya, Vologodskaya and Leningradskaya Oblasts of Russia – can be considered as the potential area of opportunities for Finnish companies operating in power and heat generation sector. Western companies have a positive experience in Russian wholesale power market, segment of small power plants can be in interest for companies experienced in use of renewable energy sources.
 
As a result of the study we have identified short- and long-term opportunities and important trends in power and heat supply sector in Russia.
 
Three segments can be distinguished:
•large power plants,
•small power and heat plants,
•boiling houses for district heating purposes. 
 

Large power plants in the studied Region are running on natural gas, and this situation will hardly be changed in nearest years. Two kind of opportunities can be considered in this segment:
•participation in reconstruction projects in CHP for combined cycle (all three regions), and
•modernization/new construction of CHP plants on renewables in the Vologda and Arkhangelsk
Small heat and power plants are working in many pulp and paper and forest mills. As a general trend we can note the increasing use of natural gas as a fuel and use of timber waste to pellets’ production. We interviewed about 40 of such plants and found 3 scheduled  projects. All of them are rather large (over 10 MEUR), Finnish companies are welcomed for co-operation as contractors or/and investors.
 
The most numerous segment is boiling houses for heat supply. Not less than 30% of them (several hundreds) needs reconstruction. At the moment 3 projects are scheduled and at least 5 more are planned at cost of the municipal budget, details of participation can be clarified depending on profiles of Finnish companies interested in these projects.
 
As the most promising segment we can consider 3 large projects combined the fabrication of fuel based on peat and reconstruction of boiling houses. All of these projects can be attractive for several different Finnish companies.
 
All above presented information is not an official  invitation  to tender participation, there are opportunities  presented as a result of the study. We know that the other Western companies, such as Austrian, Czech, Latvian and Estonian are planning  to make their offers into these projects.

FinNode Russia 1 2011 North West Heat and Power Generation (pdf) (2.9 MB)

Vladimir Skorlygin
Finpro Moscow
+7 906 716 0992
vladimir.skorlygin(a)finpro.fi