The modernisation and expansion of Russia's power-generating capabilities and grid has become an urgent priority as investment in the sector is expected to increase nearly +30% by 2020, according to information provider PMR.

Demand is expected to rise by more than +50% by 2030, according to the forecast, and PMR said more than US$ 25 billion would need to be invested in the sector every year over the next two decades if this demand is to be met.

Most of the power stations in Russia were built back in the 1960s and 1970s, and have very low efficiency ratios - typically between 33% and 35%. PMR said the average age of equipment used in Russia's power plants was 32 years, while the average age of grid equipment was 40 years.

PMR said the Russian Ministry of Energy was seeking to add to its current capacity supply agreements with producers by introducing a new programme, known as Power Sector Modernisation Through To 2020.

Currently, producers are obliged to invest in a number of fossil fuel-fired plants with a combined generating capacity of more than 23 GW between 2010 and 2017.

The new plan, which is in the process of being finalised, is believed to outline a total investment of RUB 11.2 trillion (US$ 370 billion) in the power sector by 2020, according to PMR.

Of this, RUB 4 trillion (US$ 133 billion) would be used on the modernisation of thermal power plants, while RUB 2.5 trillion (US$ 83 billion) would be put towards nuclear, hydro and renewable power stations, and RUB 2 trillion (US$ 67 billion) would be spent on developing the unified national power grid and RUB 2.7 trillion (US$ 90 billion) on the distribution network.

In addition, the programme is said to include plans for more than 27 GW of capacity to be taken out of operation by 2020, including 23.3 GW from thermal power plants and 3.75 GW from nuclear power plants.

In terms of new capacity, a total of 82.4 GW is said to be planned for commissioning, including 61.5 GW in thermal power plants, 9.9 GW in nuclear power plants, 7.9 GW in hydro power plants, and 3 GW in renewable power stations.

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