OREANDA-NEWS. October 07, 2010. There are plans to appropriate USD7.5 billion for the Government program, which is designed to guide the development of the Belarusian power grid in 2011-2015.

Investments into the development of the energy system will amount to USD 5.9 billion. The information was released by Belarusian Energy Minister Alexander Ozerets at the 5 October session of the Council of Ministers Presidium. The session discussed the draft program.

The money will come as proprietary funds of those in charge of carrying out the program, as credit resources, direct investments and state budget appropriations.

According to Alexander Ozerets, there are plans to funnel USD 3.9 billion into the construction and reconstruction of power generation facilities. The money will come mainly as credit resources, including Chinese and European loans.

The state budget will allocate money for socially important projects.

In order to reduce the hard currency component the Energy Ministry puts consistent efforts into localizing the production of the necessary parts and equipment in Belarus, said the Energy Minister.

The draft program for Belarus’ power grid development in 2011-2015 has been developed in line with the national energy security concept and the draft program for Belarus’ social and economic development in 2011-2015.

Alexander Ozerets reminded that this year the 2006-2010 state program is supposed to end. The program has allowed reducing the deterioration of the basic production assets of the energy system to 48%, saving over 1.5 million tonnes of oil equivalent, raising the use of local fuels and energy resources up to 305,000 tonnes of oil equivalent in 2010. According to the Energy Minister, the measures are insufficient due to the rapidly rising prices for hydrocarbons.

This is why taking into account the instructions the Belarus president has issued, the draft program provides for boosting the energy industry’s renewal and development pace by more than two times. In particular, there are plans to commission 3,150MW of effective energy installations in 2011-2015 thanks to the assimilation of modern steam-gas units with the performance factor of at least 57%. There are plans to modernize the existing equipment of cogeneration plants using the latest gas-turbine technologies, to take measures to improve the power generation structure at cogeneration plants, and to decommission outdated equipment with the performance factor of under 39%. According to Alexander Ozerets, the measures will reduce the overall fuel use for power generation by 10% in 2015.

The draft program envisages other measures, too. For instance, in order to diversify the fuel and energy budget of the energy system, there are plans to build the Zelva station, three compact cogeneration plants, to install a boiler that will burn local fuels at the Mozyr cogeneration plant, to build hydropower plants in Grodno, Polotsk, Vitebsk and other locations as well as wind-driven electric power stations. The implementation of these projects will allow substituting up to 2 billion cubic meters of natural gas per annum by 2015, saving USD 500 million in hard currency.

The construction of the nuclear power plant will continue. The implementation of the program will reduce the deterioration of the basic production assets of the power grid by 2016. The power-generation capacity will increase, with over 2 million tonnes of oil equivalent saved in 2011-2015. With the higher power-generation capacity available, there are plans to increase electricity export up to 5 billion kWh.

“When working on improving the tariff policy we will focus on the measures to remove cross-subsidies in gas prices and energy tariffs by 2014 in order to reduce energy expenses for the real production sector. We will be also working on a regulatory framework for electricity and heat tariffs ensuring the efficient performance of the energy system while it undergoes structural changes,” Alexander Ozerets said.

According to him, preferential prices for natural gas and preferential electricity and heat tariffs for some legal entities and individual entrepreneurs will be abolished in 2012.

Cross subsidies in the prices for natural gas supplied by the Beltopgaz state production organization will be completely eliminated by 2013 and in the tariffs for electricity and heat supplied by the Belenergo organizations by 2014.

According to the Energy Minister, to eliminate cross subsidies in the prices (tariffs) for electricity for individuals there is a need to ensure compensation on an annual basis.