Russia’s government approved on Thursday a ten-year modernization program for Russian power plants, expected to attract $28.8 billion in private investments in the sector, Energy Minister Alexander Novak said.
"The government approved today a plan to upgrade nearly 40 gigawatts of installed capacity, which accounts for around 16% of Russia’s total installed generation capacity," Prime Minister Dmitry Medvedev said on Thursday, Oil Price reported.
The project will run through 2031, Medvedev added, noting that Moscow plans to have long-term predictability in electricity prices to provide businesses with long-term predictability of energy costs.
Novak said that the program will run between 2022 and 2031. The first competitive selection will be held for 11 GW in April or May, with power supply expected to start in 2022-2024.
Russia’s key selection criteria for equipment will be the low cost per kWh, Novak noted. The modernization program will also aim to have as much domestic equipment and engineering as possible, the energy minister added.
According to BP Energy Outlook 2018, natural gas will stay the leading fuel in Russia’s power generation through 2040. The share of natural gas, however, will drop slightly from 54% in 2016 to 53% in 2040.
The share of nuclear power in Russia’s power mix is expected to grow to 19% by 2040 from 15% now, and the share of hydropower generation is seen flat at 15%.
The share of coal in Russia’s power generation will drop from 14% to 8% in 2040, according to BP. Despite the fact that renewables will soar by more than 7,500% by 2040, renewable energy will contribute just 2% to Russia’s primary energy demand in 2040, compared with 17% on average among the other BRIC nations (Brazil, India and China).