Rosseti wants to build grid infrastructure at expense of energy market - paper

MOSCOW. June 9 (Interfax) - Russian power grid monopoly Rosseti has proposed to build new grid infrastructure under the General Scheme for Deployment of Electricity Facilities to 2042 at the expense of the energy market, national daily Kommersant reported on Monday, citing instructions issued after a government strategic session held on May 31.

The company is supposed to carry out 27 construction projects at a cost of 1.064 trillion rubles (with VAT), but it has not yet included these projects in its investment program amid a lack of financing sources, the paper said.

Rosseti is proposing to finance the new projects in a way similar to how new generating facilities are being financed, at the market's expense. This could involve introducing an investment component for developing backbone grids, possibly with a 15-year recoupment period and a 12%-15% rate of return, the paper reported sources as saying.

Construction of new grids could also be paid for by signing contracts with suppliers for provision of services to develop backbone grids.

Kommersant reported that the Energy Ministry said it supports the initiative and that "this refers to financing of backbone grids that are alternatives to construction of new generation akin to the KOM NGO [Competitive Capacity Selection of New Generating Facilities] mechanism."

Rosseti now finances the construction of its infrastructure with the transmission rate. Rosseti head Andrei Ryumin said on Friday that the company sees a need to additionally raise rates to fulfill the objectives of technological independence by 2030.

"Our only source of investment is the rate. Other sources are not currently accessible to us to solve these issues," Ryumin said.

Documents on the development of Russia's energy system included the idea of building direct current lines. For example, in order to tackle shortages in the energy system of Moscow and Moscow Region, there was a proposal to build DC lines from the Novovoronezh Nuclear Power Plant to the southern part of the region's energy system, in addition to building guaranteed generating capacity of 150 MW in 2032-2036. Such lines might also be needed to cover energy shortages in Siberia.