Experts discussed problems of power engineering

24 march 2016

The Analytical Center held the roundtable entitled “Power Engineering in Russia: Monitoring Changes”. During the roundtable the experts discussed the current state of manufacture of power generating equipment, the problems of the industry and its development prospects. The experts also considered the changes that have happened in the industry as a result of the measures implemented as part of the industrial policy in Russia, including import substitution plans.

“At the moment the problem of import substitution in power engineering is most serious,” said Elena Medvedeva, Advisor to the Department for operational control and management in the power industry of the Russian Ministry for Energy.” About 50% of the main production equipment currently in use in the industry is imported pieces.” According to the expert, it is a very large percentage that poses a threat to the energy and economic security of the country. 13% of steam turbines currently in operation are foreign made: it is 25% in terms of pieces of equipment and 25% in terms of installed capacity, the expert noted. “As far as gas turbines are concerned, only 37% of them are Russian in terms of quantity and 32% in terms of capacity. And those are primarily low capacity turbines because there are no Russian suppliers of medium and high capacity turbines, they simply do not exist,” Ms. Medvedeva reported. At the moment only 7 foreign made gas turbines currently in operation could potentially be replaced with units made in Russia, the expert explained. Ms. Medvedeva also noted that Russian Ministry for Energy has joined forces with the Ministry for Trade to implement a program to promote import substitution in power engineering.

FINVAL Group’s Vice President for Strategic Development Vladimir Smetana believes the main problem the industry is now faced with is the volatility of the ruble. “The ruble’s exchange rate is constantly fluctuating while industry needs stability. Our investment projects in engineering take 5-7 years to complete so in the current situation there is no way we can plan ahead,” the expert believes. He also noted that there are problems with export potential and most foreign markets are closed to Russian power engineering companies. “In the meantime, demand for power engineering within Russia is extremely weak and we have got no idea how to stimulate it,” the specialist summed up.

The participants noted that if efficiency is to be achieved in power engineering what is needed is a stable ruble, money to invest in export contracts, cheap loans and special conditions for export.

Participants in the round table included representatives of federal and regional executive authorities, energy and engineering companies, expert organizations and the academic community.