UPDATE – RusHydro sells power from 3,000-MW Boguchanskaya

Russian hydro utility RusHydro announced it signed a contract with a regional power utility to sell the entire output of the half-built 3,000-MW Boguchanskaya hydroelectric project in Siberia.

At the same time, Russian aluminum giant UC RUSAL appeared to be backing off a plan to postpone its nearby smelter project, which had been planned as the primary power customer of Boguchanskaya.

Interfax news agency previously reported RUSAL wanted to delay completion of Boguchanskaya until after 2010, even though the delay would come at a huge cost for RusHydro, its partner in the venture. RUSAL has been hit by a steep drop in foreign demand, forcing it to postpone the construction of the new smelter until market conditions improve.

Backing up its earlier statement that there would be sufficient electricity demand even without the smelter, RusHydro announced April 16 the sale of Boguchanskaya’s entire output to Krasnoyarsk territorial utility OJSC Krasnoyarskenergosbyt on a phased-in basis as individual hydropower generating units are brought on line.

RusHydro added that the Krasnoyarskenergosbyt contract does not contradict the possibility of direct supply of electricity to large industrial customers in the region.

Meanwwhile, RUSAL proposed reversing an earlier decision and relaunching two Siberian smelter projects, Boguchany and Taishet, to provide an outlet for power from Boguchanskaya. RUSAL spokeswoman Vera Kurochkina said April 16 the proposed relaunch of the projects was closely linked to the development of the Boguchanskaya hydropower station.

“The launching of the two plants provides a guarantee for banks that the energy will be consumed so that they could provide financing for the completion of the power station,” she said.

Russian Prime Minister Vladimir Putin said August 15 that electricity companies must stick by their investment programs despite the economic crisis which is expected to slash Russia’s electricity consumption by nearly 10 percent this year.

RUSAL said it was prepared to supply US$150 million to cover half of the cost of building the Boguchany smelter with reduced capacity on the condition that RusHydro provided an equal sum to finance the other half. RUSAL also said it was prepared to cover the US$300 million cost of building the Taishet smelter if RusHydro agreed to a minimum five-year supply contract with the plant and guaranteed supply even if the Boguchanskaya hydro project is not launched in time.

Russian equipment supplier JSC Power Machines has been installing the first of nine 333-MW turbine-generators at Boguchanskaya. (HNN 8/20/08) Russia’s OMZ Group recently reported it supplied components for the project. (HNN 3/20/09)

The first three units totaling about 1,000 MW are to begin operation in 2010, followed by another three in 2011 and the final three in 2012.

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