A Key Problem for Coal Generation in the Domestic Market is Stiff Competition from Natural Gas-Fired Power Plants

25 june 2015 | Peretok.ru

In early June the Cherepetskaya State District Power Plant in the Tula Region put the ninth 225 MW pulverized coal-fired unit into operation. The launch of new coal generation capacity is an exception to the rule as in recent years coal-fired power plants have been lagging behind natural gas and nuclear power plants in terms of performance and efficiency.

Victoria Gimadi
Victoria Gimadi
Department for Fuel and Energy Sector

“A key problem in coal generation in the domestic market is stiff competition from natural gas-fired power plants. One reason why coal-fired power plants cannot compete with NG power plants on a level playing field is because while domestic coal prices are essentially based on global coal prices, natural gas prices in Russia are regulated by the state,” was the way the Head of Department for Fuel and Energy Sector of the Analytical Center Victoria Gimadi explained the situation to peretok.ru

The expert does not believe there are any reasons for fast growth of coal generation in Russia at this point. “We shouldn’t expect significant growth in the share of coal-fired power plants in total energy output in the country, in all probability in the near future their role won’t change much, meaning the share of coal in total fuel consumption by power plants will remain at about 25%,” Ms. Gimadi said. In her opinion, coal-fired power plants are going to be built in Siberia and the Far East because in those regions such power plants can be built in close proximity to sources of coal. One example is the Erkovetskaya TPP export-oriented project involving the construction of a major coal-fired power plant that will use coal from a major coal deposit of the same name. The proposed power plant is expected to sell most of the electricity it generates to China. “There is little chance of coal-fired generation developing elsewhere in Russia (for example in central Russia) because apart from Siberia coal-fired power plants would be very inefficient compared to other types of power plants due to high transportation costs,” Ms. Gimadi presumes