Europe’s largest pumped storage station will be in Russia

HydroOGK hydropower holding is going to build a pumped storage hydropower station in the Leningrad region by 2016, with a capacity of 1560 MW. The project, estimated at RUR 73.8 billion (approx. $3bn), received an approval from an interdepartmental commission for the location of productive forces in the Leningrad region last week. However, construction costs could be higher as the financial conditions for the operation of such stations on the market are still being developed.

HydroOGK has begun the design of Europe’s largest pumped storage hydropower station on the Shapsha river in the Lodeinoye Pole region outside St. Petersburg. The station will have eight units with a generation capacity of 195MW and a pumping capacity of 220MW each. The first two units are expected to come into service in 2014. The station will produce 2.34 kWh billion a year. Construction costs are estimated at RUR 73.8 billion (approx. $3bn). According to the Leningrad region committee for economic development and investment, an area of 2,553 hectares has been allocated for the construction. The station will have about 400 employees. The idea goes back to the 1980s, but the construction was mothballed.

The new hydropower plant will be one of Europe’s largest, Andrei Pivovarov, Managing Director at HydroOGK, told RBC Daily. Currently, there is one such station operating in Russia, the Zagorsk pumped storage station with a capacity of 1200MW. The second Zagorsk plant is under construction, it will produce 840MW.

According to Pivovarov, it will take about a year and a half to prepare technical and economic feasibility study for the new plant, which means that the construction could be started at the end of 2009. He said the location was chosen due to its proximity to St. Petersburg and the Leningrad Nuclear Power Plant.

“The pumped storage hydropower station will make the operation of the nuclear power plant more effective,” he said. Electricity produced by the nuclear power plant during low consumption periods, for example, at night, could be used for pumping water into reservoirs. And in the daytime, the power plant would return the stored energy. On average, it takes a pumped storage hydropower station eight hours to pump water, and four to six hours to give electricity away.

Denis Demin, an analyst at Energocapital Investment Group, believes that project costs could be higher than expected due to increased construction costs, energy supplies for the new plant and uncertainty about conditions for its operation on the Russian electricity market. “For example, the construction costs for the second Zagorsk station have more than doubled already. The financial principles for the operation of pumped storage hydropower stations on the market are still being developed: being both consumers and producers of electricity, such stations need special rules,” he said.

Source: Analytical department of RIA RosBusinessConsulting