Hatch and its partners provided the following services for the Kamchatka energy sector development and restructuring plan:
- Elaboration of an overall strategy for the sustainable development of the energy sector
- Assessment of energy sector situation and recommendations for modifications to structure and relationships
- Review institutional structures and practices with
a view to commercial reorientation
- Review tariff policy and recommend changes to tariff structure, levels and methods of determination
- Evaluation of supply and demand for energy sources, electric power and heat
- Formulation of lowest tariff power system expansion plan
- Review of environmental assessment practices and procedures
In order to make recommendations, the following tasks were required:
- Develop a regional energy companies’ restructuring program to promote competition and foster independent power investment
- Recommend changes to regional energy legislation and energy market regulations corresponding to proposed energy sector structure
- Propose an energy sector information and a planning system as a major instrument for analyzing, planning and forecasting regional energy sector development
- Outline a phased overall investment program for regional energy sector development
The Kamchatka peninsula is situated in Russia’s remote far east, northeast of Japan. It is isolated from Russia by geography and sheer distance from major centers of population. The regional grid is not interconnected with the national grid, nor is the region connected to the rest of the country by pipeline–fuel for combined heat and power plants is delivered by ship.
The Kamchatka Energy Sector: A Snapshot
Total System Capacity (existing): 460 MW
Capacity under construction: 79 MW
Isolated Units: 87 MW
Total Capacity: 626 MW
Daily System Peak: 250 MW
Transmission Voltages" 30 kV; 10 kV
Total Consumption (1999): 1079 GWh
Residential Consumption (1999): 420 GWh
Industrial Consumption (1999): 280 GWh
The reliance of the region on external supplies of fuel made it vulnerable to the volatility of world oil prices. Moreover, the traditional use of subsidized electricity and heat supplies as a form of income support became less and less sustainable with the collapse of Soviet era economic relationships and the divestment of state-owned industry to the newly forming private sector.
The need for least cost, reliable electricity supplies by an export-oriented fishing industry and prospective mining sector stimulated several independent private sector-led investments in new indigenous energy supplies, including hydroelectric and geothermal capacity. Meantime, the state-owned energy provider turned to indigenous supplies of natural gas to supplant imported oil as the thermal fuel of choice, and began to invest in the development of on- and off-shore gas reserves, and a pipeline infrastructure to deliver gas over hundreds of kilometers of environmentally sensitive coastline.
The need for a more rational, coordinated approach to energy sector development became apparent as decision-makers and stakeholders began to grapple with the problems of pricing, settlements and regulation of the rapidly developing sector. This assignment is intended not as a panacea for the challenges facing the regional energy sector. Rather, the project intends to provide perspective, analytic tools and a framework upon which the highly competent regional professionals can build.
