Russia’s $1.3bn Crimean power plan bedeviled by sanctions

The Russian government’s $1.3bn plan to build two new gas-fired power plants in the recently-annexed Crimea region has run into problems as a result of international sanctions.

Two years after its approval, the plan, which would supply Crimea‘s residents with power they once got from Ukraine, has run aground as Siemens will not supply the gas turbines required, for fear of violating the sanctions.

Russia explored buying turbines from Iran, changing the design to accommodate Russian-made turbines and using Western-designed turbines already in Russia. Each alternative had problems, the sources said, leaving officials and managers unable to agree on how to move forward.
Crimea map
As a result while the power plants have been built, the facility is without turbines, although the Kremlin said it wanted the power stations partially operational by September and fully operational by March 2018.

à‚ The foundations of the two power plants were designed to accommodate 160-187 MW turbines which can deliver the 940 MW in extra electricity that Russia promised Crimea to end frequent power cuts.

“Siemens’ business policy is very clear: Siemens complies with all export control restrictions,” a Siemens spokesman said.

Two of the sources familiar with the project said that the energy ministry was exploring whether it could install 25-megawatt turbines made by ODK, part of the Rostec group.

Russian officials have also said they are exploring buying large turbines from a country that does not support the sanctions, including Iran. A third option, voiced this month by Russian Energy Minister Alexander Novak, is to use Western-made turbines already in Russia which are lying idle.

A source in Russia’s power sector said it could be hard to find enough compatible turbines from a single manufacturer. Even if a full set was found the manufacturer would need to get them working — potentially falling foul of sanctions.

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