desirability of building the bashkir npp

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According to the government approved scheme for siting electric power plants to 2030 the first two power-generat- ing units at the Bashkir NPP are to be commissioned in 2024 and 2027 and at the Tatar NPP in 2025 and 2028. However, the decisions concerning the siting region and the commissioning period are not final and can be made more precise at the pre-design stage of the investment projects, where the siting will be validated, the commissioning period will be made more precise and the number, type and technical and economic performance indicators of the power units will be determined. The first, most important problem at the pre-design stage of an investment project is the preparation of the investment plan,because it is the basis for determining the desirability of investing in the construction of NPP. To confirm the possibil- ity and desirability of building a new NPP when developing an investment plan the first step is a systems energy validation of the desirability of building the plant, including an analysis of its role and place in the energy system (often in neighboring energy systems) and a determination of the prospective markets for the electricity produced under varying external conditions (electricity demand, fuel price, electricity price, capacity and others). In addition, the preferability of the NPP over other sources of electricity is determined. This energy validation is the basis for concluding that the NPP is needed and forming a construction program. Although a systems energy validation of the siting of each new NPP has its own characteristic aspects, irrespective of it a preliminary validation of the siting within the framework of an investment plan must include standard stages [1]. The methodological approach described was used in 2008–2011 during the preparation of the validating materials for investment plans for NPPs to be commissioned to 2030 [2]. The Tatar and Bashkir NPPs were among the plants studied in the course of the investment planning. The study showed that from the systems standpoint further analysis of investment projects for constructing the first phase of the Tatar and Bashkir NPPs is needed: 1) for the assumed electricity demand, power dynamics and commissioning to 2030, both NPPs will be needed; the main market for electricity from the Tatar NPP is directly in the energy system at its location; the market for electricity from the Bashkir NPP is wider and will also include consumers from the Orenburg energy system; 2) the analysis showed that the electricity produced at both NPPs is competitive with the alternative base sources uti- lizing fossil fuels with discount rates 5 and 8%; at 10% with the maximum construction cost the NPP becomes less eco- nomically efficient than a steam-gas power plant; 3) analysis of the commercial efficiency of investment projects also confirmed their desirability: even with a dis- count rate of 10% the pure discounted profit will exceed 500·10 9 rubles in future (running) prices, and the internal rate of return will exceed 14%; and Atomic Energy, Vol. 114, No. 4, August, 2013 (Russian Original Vol. 114, No. 4, April, 2013) UDC 620.9.001.12/18 Translated from Atomnaya Énergiya, Vol. 114, No. 4, pp. 236–239,April, 2013. Original article submitted November 27, 2012. 1063-4258/13/11404-0293 © 2013 Springer Science+Business Media New York 293 T. V. Novikova, 1 L. V. Urvantseva, 1 A. A. Khorshev, 1 V. S. Shulgina, 1 and E. I. Sharov 2 DESIRABILITY OF BUILDING THE BASHKIR NPP 1 Energy Research Institute, Russian Academy of Sciences (INEI RAN), Moscow. 2 Rosenergoatom Concern, Moscow.

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Page 1: Desirability of building the Bashkir NPP

According to the government approved scheme for siting electric power plants to 2030 the first two power-generat-

ing units at the Bashkir NPP are to be commissioned in 2024 and 2027 and at the Tatar NPP in 2025 and 2028. However,

the decisions concerning the siting region and the commissioning period are not final and can be made more precise at the

pre-design stage of the investment projects, where the siting will be validated, the commissioning period will be made more

precise and the number, type and technical and economic performance indicators of the power units will be determined.

The first, most important problem at the pre-design stage of an investment project is the preparation of the investment

plan, because it is the basis for determining the desirability of investing in the construction of NPP. To confirm the possibil-

ity and desirability of building a new NPP when developing an investment plan the first step is a systems energy validation

of the desirability of building the plant, including an analysis of its role and place in the energy system (often in neighboring

energy systems) and a determination of the prospective markets for the electricity produced under varying external conditions

(electricity demand, fuel price, electricity price, capacity and others). In addition, the preferability of the NPP over other

sources of electricity is determined. This energy validation is the basis for concluding that the NPP is needed and forming a

construction program.

Although a systems energy validation of the siting of each new NPP has its own characteristic aspects, irrespective

of it a preliminary validation of the siting within the framework of an investment plan must include standard stages [1]. The

methodological approach described was used in 2008–2011 during the preparation of the validating materials for investment

plans for NPPs to be commissioned to 2030 [2]. The Tatar and Bashkir NPPs were among the plants studied in the course of

the investment planning.

The study showed that from the systems standpoint further analysis of investment projects for constructing the first

phase of the Tatar and Bashkir NPPs is needed:

1) for the assumed electricity demand, power dynamics and commissioning to 2030, both NPPs will be needed;

the main market for electricity from the Tatar NPP is directly in the energy system at its location; the market for electricity

from the Bashkir NPP is wider and will also include consumers from the Orenburg energy system;

2) the analysis showed that the electricity produced at both NPPs is competitive with the alternative base sources uti-

lizing fossil fuels with discount rates 5 and 8%; at 10% with the maximum construction cost the NPP becomes less eco-

nomically efficient than a steam-gas power plant;

3) analysis of the commercial efficiency of investment projects also confirmed their desirability: even with a dis-

count rate of 10% the pure discounted profit will exceed 500·109 rubles in future (running) prices, and the internal rate of

return will exceed 14%; and

Atomic Energy, Vol. 114, No. 4, August, 2013 (Russian Original Vol. 114, No. 4, April, 2013)

UDC 620.9.001.12/18

Translated from Atomnaya Énergiya, Vol. 114, No. 4, pp. 236–239, April, 2013. Original article submitted November 27, 2012.

1063-4258/13/11404-0293 ©2013 Springer Science+Business Media New York 293

T. V. Novikova,1 L. V. Urvantseva,1

A. A. Khorshev,1 V. S. Shulgina,1

and E. I. Sharov2

DESIRABILITY OF BUILDING THE BASHKIR NPP

1 Energy Research Institute, Russian Academy of Sciences (INEI RAN), Moscow.2 Rosenergoatom Concern, Moscow.

Page 2: Desirability of building the Bashkir NPP

4) analysis of the sensitivity of the implementation of the plans to a change of the main components of the initial

information (the wholesale price of the base electricity, specific capital investment in the NPP, the number of hours of

installed capacity utilization) showed that both investment projects possess adequate margins of economic efficiency – when

the main components of the initial information are varied in the a wide range (±20%) the internal rate of return is much greater

than 10%.

However, subsequent detailed analysis of the investment projects showed that the realizability of the investment

decisions depends on local factors: geological, environmental, technogenic, infrastructural, social and others. For example,

even though construction is desirable and efficient the Tatar NPP project will probably not be implemented because the infras-

tructure built on site is decayed or is not used as intended. In this connection, the possibility of replacing the construction of

the Tatar NPP by timely commissioning of four power units at the Bashkir NPP, including for electricity and capacity supply

in the Republic of Tatarstan, is under consideration.

We shall examine the desirability and efficacy of such a decision using the approach proposed above and the results

of investment planning for the Tatar and Bashkir NPPs.

It was assumed that both NPPs placed on developed sites in order to minimize capital investments by using (restor-

ing) preserved objects and infrastructure. However, the Bashkir NPP site is best prepared for the resumption of construction.

The construction and engineering groundwork makes it possible to resume the investment project and complete the first phase

before 2025.

Analysis of Table 1 shows that at present the united power systems of the Urals and the Mid-Volga Region as well

as the power systems using power from the Bashkir and Tatar NPPs have excess installed capacity. The excess power

0.29 GW from the Bashkir power system is transmitted into the Chelyabinsk power system; the excess power 0.87 GW from

united power system of the Mid-Volga Region is transmitted through the Tatarstan power system into the Orenburg system

(0.47 GW) and the rest flows into the Urals power system (0.4 GW). In accordance with the maximal variant of electricity

consumption the predicted demand for new base power in Bashkortostan and Tatarstan will be 0.35 and 0.43 GW, respec-

tively, in 2020, 1.24 and 2.13 GW in 2025, and 1.24 and 4.11 GW in 2030. In the base variant, this is approximately 20%

less – totaling about 4.3 GW. Thus, the construction and commissioning of the first phase of the Bashkir NPP in 2021–2025

and the second phase in 2026–2030 are desirable; this power will be needed.

In developing validating information for investments planning for building these NPPs, many calculations were per-

formed to obtain consistent conclusions concerning their public efficacy as compared to that of alternative base technologies

and commercial efficiency. It is evident from Table 2 that because of their close siting the Tatar and Bashkir NPPs have essen-

tially identical performance indicators. However, the advantages of building the Bashkir NPP are obvious:

1) in view of the fact that the specific capital investments in the construction project are 4% lower because of site prepa-

ration the specific discounting of the expenditures is approximately 3.5% lower than for the alternative investment project;

2) the competitiveness compared with other base sources of electricity production (coal-burning steam-turbine con-

densation power plant and steam-gas power plant) is somewhat higher than for the Tatar NPP; and

United power system Installed capacity Actual loadMaximum load

of own usersInstalled capacity

excessTransmitted installed

capacity excess

Urals, including 42.7 35.8 35.2 6.9 0.6

Bashkir 5.1 4 3.7 1.1 0.3

Orenburg 3.7 2.7 2.3 1 0.4

Mid-Volga Region, including 26.4 18 17.4 8.4 1.6

Tatarstan 6.8 4.1 4 2.4 0.9

294

TABLE 1. Power Balance of the United Power Systems of the Urals and Mid-Volga Region, Power Systems Using Bashkir

and Tatar Power in 2009, GW

Page 3: Desirability of building the Bashkir NPP

3) the commercial efficiency indicators of the investment project are somewhat better due to the difference in the

required capital investments and higher (according to experts assessment) wholesale prices of base electricity as compared

with the analogous prices for Tatarstan.

In summary, the construction and commissioning of the Bashkir NPP are based on a presumed large economic ben-

efit compared with the alternative investment project for the public as a whole and for investors. The only adverse factor in

implementing this project is the significantly larger volume of grid construction required for power delivery as compared with

the alternative.

The power delivery from a dual-unit Bashkir NPP with the construction of a 500/220 kV open distribution setup is

possible in the directions of the 500 kV Beketovo and Ufimskaya substations as well as 220 kV Argamak and Blagovar sub-

stations of the Bashkir power system. The Tatar NPP is located at a load node of the Ural–Center line, which is a significant

factor, facilitating its integration into the structure of the country’s unified power system. This creates a difference in the

extent and required capital investments in power-grid objects for the dual-unit Bashkir and Tatar NPPs, which are located in

different power systems. Thus, approximately two times longer transmission lines (1140 versus 540 km) and significantly

higher experts estimate of the capital investments in power-grid objects – 22.7 versus 11.4 billion rubles – are characteristic

for the Bashkir NPP.

At the same time, in the event that the Bashkir NPP distributes some power to Tatarstan, for example, the Elabuga,

Tatar, and other substations, the total extent and capital investments in power-grid objects can be significantly reduced on the

basis of the n – 2 principle, applicable to power distribution schemes of NPPs. However, any cost reduction for power-grid

construction will require additional elaboration.

In addition, it is useful to analyze other directions of power distribution by the Bashkir NPP to neighboring regions

of the Russian Federation, for example, the Udmurt Republic and Kirov Oblast, which currently suffer from power shortages.

In summary, since the Bashkir NPP site is developed, prepared and located close to load nodes of the power grid in

Tatarstan, balance and economic assessments show that it is desirable to accelerate its construction: commission the first

phase of two power-generating units in 2021–2025 and the second in 2026–2030.

IndicatorsNPP

Bashkir Tatar

Public indicators:

specific discounted costs, kopecks/(kW·h) 114–137 118–142

capital expenditures on the power provision (output)* scheme(electric transmission line length), 109 rubles

22.7 (1140 km) 11.4 (540 km)

Competiveness with respect to specific discounted costs:

coal-burning condensation power plants 1.14–1.24 1.13–1.23

steam-gas power plant 1.12–1.28 1.04–1.25

Commercial efficiency:

internal rate of return, % 15.5 14.7

pure net present value, 1013 rubles 0.97 0.89

cost index 1.71 1.64

discounted payback period, yr 15.4 16.5

* Neglecting discounting.

295

TABLE 2. Efficiency Indicators of Dual-Unit Bashkir and Tatar NPPs with Discount Rate 8%

Page 4: Desirability of building the Bashkir NPP

REFERENCES

1. A. S. Makarova, T. V. Novikova, A. A. Khorshev, and E. I. Sharov, “Systems validation of NPP sites,” Izv. Ross. Akad.

Nauk. Energetika, No. 4, 18–29 (2012).

2. E. A. Volkova, T. V. Novikova, L. V. Urvantseva, and V. S. Shulgina, “Consideration of systems requirements for val-

idation of NPP construction at the development stage of an investment plan,” ATOMKON, No. 2, 10–14 (2009).

296