Just a short while ago a milestone event occurred in the energy sector of Tatarstan - comprehensive modernization of Kazan CHPP-3, one of the oldest co-generation plants in the republic. The work was carried out in several stages, and the largest and final step was the commissioning of a new 405.6 MW power generation unit, which costs RUB 14 billion. Globally, there are totally 5 units of this kind based on the 9HA.01 high-tech gas turbine. Kazan became the first site in Russia and the second one in the world to implement such project. This object of strategic importance for the capital of Tatarstan will be one of the benchmarks on the path of creation of a 220 kV energy ring in Kazan aimed to address the issue of power shortage in the city. Industrial plants, residential premises and social facilities will be provided with electricity and thermal energy for many years to come.
EUR 535 for construction of 1 kW of installed capacity
TGK-16 OJSC, a power generating company in Tatarstan, has completed a comprehensive modernization of CHPP-3 - the largest power plant in Kazan. The entire process consisted of several stages. First, the actions were implemented aimed to ensure the reliability of electricity and heat generation. After this, comprehensive reconstruction and modernization of the power plant commenced with the purpose to enhance the efficiency and competitiveness of energy production. The most significant event was the construction of a gas turbine unit, which is based on a unique 9HA. 01 gas turbine. At the time being, this turbine is unparalleled in Russia. It is the commissioning of the turbine that became the concluding chord of the integrated programme of Kazan CHPP-3 modernization, which commenced almost immediately after the acquisition of the plant by TAIF Group.
The power generating unit with a current capacity of 405.6 MW was solemnly launched by Rustam Minnikhanov, the President of the Republic of Tatarstan at the beginning of the week. The launching ceremony was also attended by Ilsur Metshin, Mayor of Kazan, John Rice, Vice Chairman of General Electric, USA, Albert Shigabutdinov, General Director of TAIF PSC, and others.
'This is the largest gas turbine unit in our country. And today, judging by its results after the startup, it has surpassed all contractual conditions. Just imagine, Kazan will have the capacity of 400 MW! This is a very serious step and a good example,' said the President of Tatarstan.
The history of the unit erection began in April 2014, when TGK-16 OJSC and GE RUS LLC, a subsidiary of General Electric, signed an agreement for modernization of the Kazan CHPP-3 on a turnkey basis. The construction was planned to be performed in the framework of the international partnership; in addition to General Electric, the USA, GAMA, a Turkish engineering and construction company, was engaged.
The modernization program of the CHPP pursued four main goals. First, it was important to ensure reliable power supply both to the industrial enterprises and the population of Kazan. This especially related to the consumers of the first category of power supply reliability - the industrial enterprises. Second, it was necessary to increase electricity generation at least twice on the basis of the current heat consumption in order to eliminate the energy deficit existing in Kazan. In addition, it was important not only to maintain but also to increase heat generation, while maintaining acceptable heat energy tariffs for industrial consumers and the population. Another goal is to reduce the specific fuel consumption for electric power generation, thereby increasing its competitiveness in the wholesale electric power and capacity market. 'Now we can say that all the tasks set by TAIF Group to TGK-16 OJSC have been fulfilled, ' Ruslan Gizzatullin, Deputy General Director, Power Engineering and IT, TAIF PSC stated.
'The project should be considered in conjunction with the existing plant. Thanks to a systematic work, one kW of the installed capacity costs EUR 536. This is a very good figure for the economy. This GTU is twice as efficient as the existing power plants. Everybody understands that we have to supply electricity to the wholesale electricity market. We have the capacities, but we are not competitive and in some cases we can't sell energy. Now, the capacities we will create will be in demand. But in this case we have a huge chance to be always in the market,' President Rustam Minnikhanov outlined the prospects after the formal start of the GTU. And in view of the opinion widely shared by many energy industry experts that in the current conditions in Russia it is impossible to launch new energy capacities based on combined cycle gas turbine technologies at the cost less than 1,300 Euro/kW, the significance of the entire project may be fully understood.
RUB 14 billion for unique project
The main part of the construction of a new unit started in late summer of 2015; it was the time when a permit from the Executive Committee of the city was obtained. Before that preparation work was performed at the construction site, and the equipment was manufactured at factories worldwide. So, the 9HA.01 gas turbine was produced at GE's factory in Belfort, France, the generator was manufactured in Schenectady (United States), and the boiler - in the South Korea.
A distinct landmark in the history of the power unit construction was the delivery of complete equipment to the construction site. Large-size equipment was delivered by sea from the manufacturer to a sea port in St. Petersburg, then through the Lake Ladoga down the Volga River to Zelenodolsk. For reception, unloading and shipment of the equipment delivered, a temporary beach landing was built near the railway bridge over the Volga River in Zelenodolsk, dredging work was carried out, a cargo transportation route from Zelenodolsk to Kazan CHPP-3 was developed, and the road intended for the equipment transportation was reinforced.
In total, it took a year and a half to erect the unit. According to Albert Shigabutdinov, General Director of TAIF PSC, the total cost of the project amounted to RUB 14 billion. 'We used to spend about 300 grams of fuel equivalent for the production of one kWh of power energy, and now we will spend less, i.e. 200 grams. I think the project will pay back within a reasonable period taking into account the parameters indicated in the turbine specification. And it is a very reliable power supply for Kazanorgsintez,' Albert Shigabutdinov stressed.
In early April this year the commissioning work commenced at the plant. Just then it became clear that the capacity initially expected to be 388.6 MW according to the contract would exceed that value. In response to the question by the reporter of "Realnoe Vremya" how it was possible to achieve greater values than it had been anticipated, John Rice, Vice Chairman, GE said that first of all it was due to heat balance. 'This project would not have been implemented without close cooperation with all the stakeholders: TAIF Group, our main contractor GAMA, and technical specialists. The equipment operates at extremely high speeds and high temperatures. It is necessary to properly configure the cooling system so that the turbine reaches its utmost efficiency. And it is important to use modern materials that can withstand temperature, in particular, on blades, nozzles, to operate the turbine in the specified temperature range,' Mr. Rice commented on the increase of the values.
The second anchor point in the Kazan energy hub
In the second half of March, on the 19th, one of the most significant and critical energy unit start-up operations was performed at the GTU: the first trial generator connection to the grid. In May, the turbine was put into operation; its performance had reached 405.6 MW of electric capacity and 455 Gcal/h of thermal capacity by the time. Even during the trials and operation in the test mode, the electricity produced by the gas turbine unit was sold in the wholesale power energy market.
The mechanical completion and startup of the turbine marked a full finish of the Kazan CHPP-3's modernization. Thus, the plant became the second anchor point in creation of a 220 kV ring around Kazan. The energy ring assumes that there will be three sources acting as the city power centres: Kazan CHPP-3, Kinderi Substation and Tsentral'naya Substation. Kinderi Substation has always been the power source of Kazan. It is linked with the Russian unified energy system and is one of the power supply centers of the Zainskoya State District Power Station via 500 kV lines. A new scheme of power distribution of Kazan CHPP-3 will allow supplying 220 kV to the grid — its entire capacity without limits, including a new gas turbine unit of Kazan CHPP-3. The third source is the Tsentral'naya Substation that will be connected with the 500/220 kV Shchelokov Substation via a 220 kV line in fall. All the three sources are interconnected via 220 kV lines that can transfer the reserve capacity from the sources in the event of local deficit or outages. And this means that reliable electricity supply will be secured for the population and industrial enterprises.
The new power generating unit will allow the Kazan CHPP-3 to reduce the electric power shortage in the Kazan Energy District, which is, as is knowns, substantial. The power deficit is 650-850 MW here. Today, about 70% of power energy for Kazan is imported.
Kazan CHPP-3 capacity to double
'The advantage of this unit is its flexibility," said Ruslan Gizzatullin, Deputy General Director for Power Engineering and IT, TAIF PSC explaining the peculiarities of the turbine. According to him, quick startup, quick load increase, high reliability and high performance are key indicators for the power engineering industry. 'The power plant's capacity will actually double; from now on, it will be 790 MW', highlighted Gizzatullin.
A unique turbine will be connected to the steam turbine equipment already existing at the plant. As a result, once the gas turbine unit is put into operation, CHPP will generate power and heat in a combined-cycle mode since the turbine exhaust heat will be disposed in the waste-heat recovery boiler producing main steam, which then will be sent to the plant header and actuate the existing steam turbines.
The advantages of the turbine also include better operational maneuverability, which is achieved through the use of an innovative module control system that, in turn, allows quick start of the unit, switching to a partial load while preserving high efficiency rates. And the presence of a low-emission combustion chamber significantly reduces the environmental discharge by Kazan CHPP-3. 'Just like all new production facilities contracted by TAIF Group, the turbine is environmentally friendly. In fact, this is a "green" turbine,' said Ruslan Gizzatullin.
Own energy business from scratch
We remind that Kazan CHPP-3 was founded in 1964 and it is the largest power plant in the city. In 1968, the plant was put into operation, so next year it will celebrate its fiftieth anniversary. Until 2010, Kazan CHPP-3 along with Nizhnekamsk CHPP (PTC-1) belonged to Generating Company OJSC (now Tatenergo JSC); later it was purchased by a newly established power company of TAIF Group - TGK-16 OJSC.
The purpose of buying the energy assets was very clear and, indeed, self-explanatory. Emergency shutdowns used to occur at production facilities every year due to the heat and electricity supply failures at power plants. At the same time, TAIF Group's companies consumed totally 50% of the heat produced and generated up to 80% of the revenue from the heat supply together with the spent steam from power plants of Generating Company OJSC, which was a part of Tatenergo OJSC. Heat tariffs were so extremely high that the portion of energy costs in the cost of final petrochemical products exceeded 25 per cent. Given such a production cost structure, it was impossible to think about the competitiveness of Tatarstan's petrochemical enterprises in the global market. For comparison, the portion of energy costs in the production cost of the products issued by comparable businesses abroad in average does not exceed 5-8 per cent. 'This cannot last any longer,' said the General Director of TAIF PSC Albert Shigabutdinov at the annual meeting of shareholders in 2009, 'We will create our own power energy sector from scratch.'
The leadership of the republic stepped in — power engineering and petrochemical companies received the recommendations to settle all the disputable issues out of court. The first President of Tatarstan Mintimer Shaimiev supported the sale of energy assets to the republic's largest companies - TAIF Group and Tatneft Group in order to create a competitive energy market in Tatarstan and attract financial resources of investors to upgrade the generating facilities. The choice of an option to reform the republic's energy sector by selling the three power plants of Generating Company OJSC to the large industrial consumers was primarily determined by a concern of the republic's leadership about the population. Since construction of own energy sources by TAIF Group and Tatneft Group would have led to an actual shutdown of the existing power plants in Nizhnekamsk and Kazan and to an uncontrolled growth of heat energy tariffs for the population of these cities. On the other hand, an attempt to preserve the situation the region faced at that time with high heat energy tariffs for industrial enterprises would have led to a shutdown of petrochemical and oil refining enterprises, cessation of heat energy consumption by them, which would also have affected the tariffs for the population and the overall social economic situation in the republic. In this seemingly deadlock situation an option was chosen, though less efficient for new owners in terms of capital intensity and return on investments, but aimed primarily to protect the interests of the population of the Republic of Tatarstan.
The power plants sale price was determined based on a market assessment performed by reputable foreign experts, and approved by the government of the republic. The sale of a part of Generating Company OJSC's assets was a mutually beneficial deal, because the proceeds received were subsequently used by the state company for its own investment programmes aimed to modernize power generating plants including the launch of new projects of new modern power generation plants construction at Kazan CHPP-1 and CHPP-2.
Having purchased the assets, TAIF began developing a strategic programme aimed to enhance the reliability and efficiency of the energy complex through its radical modernization, which has been successfully implemented today at Kazan CHPP-3.
Time has proved that the decision of the republic’s leadership to create independent energy companies was correct. It is this step that opened floodgates to strategic investors in the energy sector of Tatarstan. So, basically, over the past few years only, the new owners - Tatneft PJSC and TAIF PSC - have reconstructed Nizhnekamsk CHPP-2 with the commissioning of additional 200 MW and Kazan CHPP-3 with the commissioning of a 405 MW gas turbine. Today, Nizhnekamsk CHPP-1 has been substantially reconstructed, and due to this large-scale reconstruction the plant now supplies 30% more heat, if compared to the level of 2010. Tatenergo JSC has got funds to complete the project of a 220 MW SGU (steam gas unit) at Kazan CHPP-2; Kazan CHPP-1 is being upgraded now. Such investments and simultaneous implementation of many new generating facilities launching projects within one company would be impossible.