One of Gazprom’s largest power assets, Mosenergo, has launched a new gas-fired plant that will provide 450 megawatts for the Moscow region. It cost Gazprom half a billion dollars and is just the beginning, according to Gazprom CEO Aleksey Miller.

Speaking at the launch of the new power generator, he said: “This is the first step of our investment programme. We plan to commission 3,500 megawatts of new capacity in the Moscow region.”

Although Gazprom’s new plants in Moscow are gas-fired, the company plans to switch its other generators like OGK-2 and OGK-6 to a much cheaper fuel – coal.

The planned shift to coal was the prime motive for the proposed merger of Gazprom's generation subsidiary with coal producer SUEK.

The gas monopoly has stuck to that decision, even though Gazprom and SUEK will now just co-operate as separate companies.

Gazprom spokesperson Sergey Kupriyanov said: “We will co-operate with SUEK in the sphere of technology and also in transferring some of Gazprom’s power assets to coal. But we will fulfill these projects in accordance with market principles.”
 
The merger could have enabled Gazprom to buy coal at a cheaper price but even without this incentive, SUEK will remain Gazprom’s main coal supplier as its fields are located close to Gazprom’s generating assets.

And as coal prices grow, SUEK will benefit far more from selling fuel to Gazprom at market prices, rather than a mere source of subsidised fuel to Russia's gas monopoly.