Russian PM Putin issues show of strength against power generators

25 February 2010 - Russian prime minister Vladimir Putin has reprimanded Russian power generators for failing to make investments in the electricity sector, as record demand during the severe winter puts worn-out generation capacity under renewed strain.
According to the Financial Times, Putin singled out Vladimir Potanin, Mikhail Prokhorov, Viktor Vekselberg and Leonid Lebedev, the billionaire owners of several of Russia’s power generation companies, for failing to upgrade capacity despite pledges to do so when the plants were privatised two years ago.
Russia launched a sell-off of its Soviet-era electricity sector in 2007 in an effort to raise investment and boost capacity that had then faced near overload as demand hit record highs.  The urgency of investment eased last year after the financial crisis sent gross domestic product plummeting and demand fell.
Moscow, acting on lobbying from Russia’s cash-strapped oligarchs, agreed to delay investment programmes pledged as part of the privatization schemes.  As Russia begins to recover, however, the severe weather in January and February has driven demand back up to the highs of 2008. Meanwhile, oligarchs’ pockets, many helped by state bail-outs, are filling again as commodity prices recover.
Mr Putin said investment must be boosted or infrastructure constraints would put a brake on economic growth. “During the crisis we did everything we could to support you. The crisis is fading away so I ask you to fulfill your obligations,” he said as he chaired a meeting on the power sector in Siberia.
“We have helped you with credits, and guarantees and moral support. You cannot have failed to notice this. We were counting on a responsible position from the owners. But unfortunately far from all have shown responsibility and have preferred to search for excuses to avoid doing any real work.”
Putin said that, in contrast, state companies operating in the sector, such as Gazprom, and foreign companies that also participated in the sell-off, including Fortum, Enel and Eon had managed to stick to their investment obligations in spite of the crisis.
An explosion last August at the Sayano-Shushenskaya hydro-electric power plant, which killed 75 workers, has highlighted how state companies also face problems stemming from under-investment.  Planned upgrades to the plant, owned by state-controlled RusHydro, took years to get off the drawing board. Prosecutors are investigating shoddy maintenance and whether contracts were handed out to crony companies.
Putin, speaking after overseeing the restart of the plant on 24 February, said only 38 out of 100 power stations planned for construction this year were being built while work had not started at all at 45 power plants.

Sponsored by FLSmidth
Recommend this article Recommend this article () You recommended this article You recommended this article ()
Follow Power Engineering on Twitter

Products Showcase

Dynamic Fluoride Ion cleaning DFIC of industrial natural gas turbines Hi-Tech Furnace Systems

Dynamic Fluoride Ion Cleaning of IGT Parts

The Dynamic Fluoride Ion Cleaning (DFIC) Process from Hi-Tech Furnace Systems is able to clean deep, narrow cracks of oxides by cycling between negative, atmospheric, and positive pressure.

Latest News

Shutterstock coal production trucks

Weekly Coal Production

The Weekly Coal Production shows how much coal is being produced across the U.S.

Federal Reserve Bank of Dallas Weekly Economic Indicators financial business

The Federal Reserve Bank of Dallas' Economic Indicators

The Federal Reserve Bank of Dallas offers a glimpse into how the markets are doing domestical...

Kvaerner awarded contract for gas-fired power plant in Delaware

Kvaerner North American Construction Inc. and its joint venture partner, Parsons Brinckerhoff...

Canadian Solar purchases two solar projects

Canadian Solar Inc. has acquired a majority interest in two utility-scale solar power project...

Operators Restart Unit 2 at PPL Susquehanna

Unit 2 at the PPL Susquehanna nuclear power plant near Berwick, Pa. resumed generating electr...

Settlement agreement limits cost recovery at Edwardsport

The Indiana Utility Regulatory Commission (IURC) on Dec. 27 modified and approved a settlemen...

Toshiba in talks to sell portion of Westinghouse nuclear unit

Toshiba Corp is in talks  to sell up to 16% of its stake in the Westinghouse Electric Co...

Utah nixes nuclear waste storage facility

Plans to park radioactive waste at a storage facility in Utah have been officially called off.

Archived Articles

2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013

Power Engineering Current Issue

Volume 118, Issue 3

Power Industry Wire News

Paradigm Oil & Gas Lands Experienced Oil and Gas CFO

Paradigm Oil & Gas Lands Experienced Oil and Gas CFO

LNG, Hydro Projects Drive Atlantic Canada's $52 Billion in Project Spending, an Industrial Info News Alert

LNG, Hydro Projects Drive Atlantic Canada's $52 Billion in Project Spending, an Industr...

Poplar CO2-EOR Update

Poplar CO2-EOR Update

HyperSolar Sees Market Opportunity for Fuel Cell Vehicles With Toyota FCV

HyperSolar Sees Market Opportunity for Fuel Cell Vehicles With Toyota FCV

Decisiv to Showcase TMT Fleet Maintenance Integration

Decisiv to Showcase TMT Fleet Maintenance Integration

Power Engineering

Article Archives for Power Engineering Magazine

Continuing Education

Professional Development Hours

To access a course listing associated to a specific topic listed below, click on the topic of choice from the list below.

Latest Energy Jobs

View more Job Listings >>