Experience in NEA Power cooperation development and vision a way forward

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1 Experience in NEA Power cooperation development and vision a way forward Irkutsk,

2 EuroSibEnergo is a source of sustainable power for Russia s commodities feeding global and Asian growth EuroSibEnergo has a strong presence in the Siberian power market #2 Oil producer #1 Aluminum producer #6 Coal producer, #3 coal exporter Russia owns and develops one of the richest natural resource bases globally; significant resources / production facilities are concentrated in Siberia Fast-growing Asian markets and, in particular, China are quickly becoming major consumers of natural resources in global terms Extraction and production of key natural resources (crude oil, natural gas, aluminum, timber, etc.) are very energy-intensive processes #2 Oil consumer #1 Aluminum consumer #1 Coal consumer Oil deposits Natural gas deposits Coal deposits Aluminium smelters EuroSibEnergo HPPs Therefore, reliable supply of Russia s commodities to the global market depends on availability of sustainable and competitive power, such as that provided by EuroSibEnergo Positioned to benefit from long term trends in China and Asia 2

3 Green energy generation Over ¾ of ESE generation portfolio comes from HPPs located on the Siberian rivers. ESE is one of the largest hydropower generation companies in the world and one of the major producers of green energy in Russia aiming at sustainable development ESE operates 19 power plants with total installed capacity of 19.6 GW of which over 15 GW is hydro Low average annual temperature of minus 2 C near HPP impoundments located in Siberia provides ecological advantage in terms of greenhouse gas emissions in comparison with HPPs located in warm climate High load factor of the Angara river enables to generate more carbon neutral energy without use of fossil fuels In December 2015 we diversified our clean energy mix by launching a pilot solar PV power project Abakan SPP with elements of basic equipment produced inhouse. The launch of Abakan SPP reinforced ESE leading position in green energy generation in Russia. 3

4 Этап 1. Исследование вариантов экспорта электроэнергии в Китай, в рамках Рабочей Группы ФСК 2012г. Stages of investigations in NEA power cooperation. Stage 1. Grid infrastructure research on Russia territory (East Siberia) for electricity export to China (2012) Opportunities for delivering electricity from the East Siberian regions of the Russian Federation to China were explored. Grid infrastructure layout on the territory of the Russian Federation ensuring the specified volume of export (~7 GW) was designed and estimated its approximated cost The power export to China took into account:: Large-scale deliveries in the amount of 6.9 GW collected through the network of 500 kv from newly constructed export-oriented power plants of the Russian Federation, and transferred with the bridge DC +-600/800 kv from collection points in the Republic of Buryatia and Zabaykalsky Krai to the Northern China district Beijing; Local small-scale supply of electricity to border areas in amount of 350 МW through the existed power network kv. - Newly constructed power lines 500 kv Collection point 2 DC bridge to China Collection point 1 4

5 KAZAKHSTAN Stages of investigations in NEA power cooperation. Stage 2. Investigation of electricity supply options from Siberia and Far East of Russia to China ( гг.) Research model: Supply options that were analyzed within the research: Ural Siberia RUSSIA The Far East 1. Isolated operation of power systems of Russia and China (used as reference model to compare with other options); 2. Joint operation of power systems of Russia and China in the one-way export of electricity from Russia to China via the interstate electric bridges DC +-600/800 kv: 1) Far East Northeast China - 4 GW 2) Eastern Siberia North China - 6 GW; North-West China North China Central and South China CHINA North-East China 3. Joint operation of power systems of Russia and China in the bilateral transfer of energy regime through the the interstate electric bridges: transmission volumes to be optimized depending on daily, seasonal irregularities of demand and supply, irregularities of renewable energy sources, implementation of systemic effects of the interstate power systems association (effects of scale); 4. Local supply of electricity to border areas. The main conclusions Efficiency of the two sides interconnection increases in the case of bidirectional flows of electricity and realization of integration effects of combining annual and daily load curve, improving the modes of power plants, compensating irregularities production of renewable energy and other systemic effects (option # 3). This is true without possible ecological payments which can change the picture. 5

6 Stages of investigations in NEA power cooperation. Stage 3. Development of optimal routes of electricity delivery from Russia to China, the Republic of Korea, Japan and DPRK ( ) A joint study was conducted in the framework of cooperation between Salkovo Institute of science and technology (Skoltech), EN+ Group (Eurosibenergo) and Korean KEPCO Corporation A structure of power grids in North-East Asia with the aim of establishing optimal exchanges of electricity between Russia, China, DPRK, ROK, Japan was developed The study confirmed high efficiency in the formation of interstate energy associations due to appearing synergetic effects of optimizing the integrated power systems Perspective power grids structure in North-East Asia Some systemic effects resulting in the formation of Interstate interconnected power systems in the North-East Asia MONGOLIA RUSSIA CHINA NORTH KOREA SOUTH KOREA JAPAN savings of operation expenditures of joint power system (including the costs in electric grid infrastructure) - more than $ 17 billion./year; substitution of new generating capacity by flows from other countries (displaced mostly coal and nuclear generation) - more than 38 GW; savings investments - more than $ 50 billion; savings compensating heating and pumped storage power plants capacity for compensating irregularities of renewable energy up to 16 GW. 6

7 The main present drivers of power cooperation in NEA Trends in national economics in different countries of NEA form the roles of these countries in power cooperation: - Russia power supplier - China power consumer/supplier - Korea power consumer - Japan power consumer - Mongolia power consumer/supplier The Paris climate agreement and carbon emissions reduction form a sustainable growing demand for ecologically clean energy and active reducing polluting power production technologies (coal and oil fired power) 7

8 Opportunities for power supply from Siberia to NEA Option 1. Opportunities for existed power capacity Option 2. Opportunities for new constructed Hydro power plants Siberia power system Far East power system Vitim river hydro power complex - up to 5,5 GW new green power capacity 2-5 GW existed power capacity can be as surplus To Mongolia To North China To Mongolia (Shivee Ovoo) To China (Beijing) Demands making demand-supply balance investigations in Siberia power system Allows to implement joint operation of power systems of Russia and China and Mongolia in bilateral transfer of energy Does not demand new power construction Demands making a feasibility studies of new hydro power plants in Siberia Is suitable for compensating irregularities of wind power Demands new power construction Allows to supply fully clean green energy 8

9 Integration of power supply from Russia in NEA Chita Mogocha Blagoveschensk Shivee-Ovoo Hanhai China HVAC-HVDC grid Weihai Incheon Korea HVAC grid Goseong Matsue In March sides agreement between Softbank (Japan), SGCC (China), KEPCO (Korea) and Rosseti (Russia) was concluded in power cooperation development in North-East Asia. The project of power delivery to Japan up to 2GW by 2020 was the first initiative within the agreement pushed by Softbank. The options of power supply from Siberian regions of Russia to Mongolia and China together with ways of power delivery from Far East of Russia to China can be considered as the fastest opportunity of power supply to Japan by 2020 which doesn t require any new power generation construction (especially coal fired). It could be realized as a joint project within the 4-sides cooperation agreement 9

10 Using wind power within present GEI concept b) Power transmission from Kara sea to Northeast Asia in the medium and long term a) Power transmission plan from Kara sea to Europe in the short and medium term GEI concept mainly considers wind potential of extremely north (polar) regions of Russia due to favor wind conditions of these places The Northeast (polar) regions of Russia are very little populated, difficult for access, doesn t have almost any infrastructure Location GW wind farms in north regions of Russia demands construction of high voltage power lines with long distance of transferring produced power to Asia and Europe Real development the GW wind farms in the Northeast (polar) regions of Russia seems to be possible only for very long time perspectives (more years) 10

11 Potential alternative places for developing GW wind power projects in the frame of GEI initiative Alternative places in Krasnoyarsky, Zabaikalsky, Primorsky regions and Kola Peninsula are located closer to Asian and European power markets, demand significantly less transmittion capacity for collecting and transferring produced power These places can be considered for cooperation in short and medium terms 11

12 Thank you! EuroSibEnergo Group