New power plants delivering on the investors electricity promise

Italy's Enel Group and Germany's E.On having launched new capacity in central Siberia, say that further investment is on the way for Russia’s dilapidated energy generation sector

4 years after Russia opened up its power generation capacity to international investors, amidst the break and privatisation of the former monopoly RAO Unified Energy Systems, the launch of new capacity at Surgut -2 power station – Russia’s largest and most efficient – and the Sredneuralskaya  power plant in the Central Urals, which provides a major part the energy supply for the region, underlines the reality of what the investors help can provide.Enel Group and E.On became leading investors in Russia's liberalised power market, committing to substantial long term investment.  Last year they added a record 4 gigawatts of capacity – enough to power a quarter of Moscow.   Enel invested about 180 billion roubles in 3 years from 2007 to 2010 and plans to add another 90 billion roubles by 2014, with E. On looking to bring in more than 224 billion roubles over the same period. Enel OGK – 5, General Director Enrico Viale, says the road ahead involves considerably more investment.“Major milestone has already been achieved, the market is liberalised, there´s regulatory framework, there are markets of capacity and energy. What we wish is to progress with this and make it more functioning.” Dmitry Bulgakov, utilities analyst at Deutsche Bank, Russia says the international investors in the power system have invested far more heavily than domestic investors.“Foreigners own 9% of capacity, but they commission 70 – 80% of new units.” Generators are now asking regulators for predictability, after the Russian government limited price rises to 15%, which generators say cost them millions. Prime Minister Putin started the new generators himself – promising foreign investors all the support in return for more gigawatts.