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

Related Articles

PG&E discloses more emails with state regulators

California's largest power utility released a dozen more emails Monday that it said showed improper back-channel discussions between the utility and top state regulators.

French power company to pay $772M in bribery case

A French power and transportation company has agreed to pay $772 million to resolve allegations that it bribed high-ranking foreign government officials for lucrative projects, the Justice Department said Monday.

Follow Power Engineering on Twitter

Latest News

American wind power rebounds in 2014, but stable policy still needed

The fourth quarter 2014 wind energy industry report released yesterday by the American Wind E...

Weekly Coal Production Report

The Weekly Coal Production Report has been updated for the week ended January 24, 2015.

Hawaii energy executives tell lawmakers plans for takeover

An official at NextEra Energy told Hawaii lawmakers that his company does not plan to lay off...

Dominion seeks rate freeze against opposition on many fronts

Virginia's biggest electric utility wants to weaken state oversight of its rates, saying the ...

GE to supply turbines for wind power project in China

GE (NYSE: GE) will supply 55 units of its 2.75-120 brilliant wind turbines to Huaneng Corp.’s...
Renewable Roundtable Discussion

Power Engineering Photo of the Day

Company to supply doors to Chernobyl nuclear plant site

Groupe Gorge, through its subsidiary, Baumert, won a new order to supply technical doors to t...

Siemens to maintain California natural gas-fired power plant

Siemens (NYSE: SI) was awarded a long-term service agreement for the 507-MW Blythe Energy Cen...

Power Engineering Current Issue

Volume 118, Issue 3

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.

Archived Articles

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

Power Industry Wire News

Miller Energy Declares Cash Dividends on Its Series B, Series C and Series D Preferred Stock

Miller Energy Declares Cash Dividends on Its Series B, Series C and Series D Preferred ...

ACD Systems Announces Advanced Geographical Information System (GIS) Data Solution

ACD Systems Announces Advanced Geographical Information System (GIS) Data Solution

Scorpio Bulkers Inc. Announces Closing of a Previously Announced Credit Facility

Scorpio Bulkers Inc. Announces Closing of a Previously Announced Credit Facility

Scorpio Tankers Inc. Announces Delivery of a Newbuilding LR2

Scorpio Tankers Inc. Announces Delivery of a Newbuilding LR2

Forbes Magazine Ranks Precision Frac #4

Forbes Magazine Ranks Precision Frac #4

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 >>