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Republic of Karelia for investors
http://kareliainvest.ru/
Fuel and Energy Complex
The basis of the fuel and energy complex of the Republic of Karelia is formed by the companies producing heat and electricity: cascades of Sunsky, Vygsky and Kemsky hydropower stations uniting 17 hydropower stations with total capacity 634 Megawatt, where 70% of electricity of the Republic is produced;
– the largest in the republic Petrozavodsk Heating Plant with capacity for electricity at 280 Megawatt and for heating – 821 Gcal per hour, which provides 85% of heating for the capital of Karelia;
 four heating plants of pulp and paper mills with total capacity 204 Megawatt;
The installed capacity of power stations of Karelia is 1,118 MW. The length of electrical lines 110/35/10/0,4 kV is 10,256 kilometers.
Under the circumstances of the deficit of electricity (internal consumption on the territory of the Republic is 50% more than the production) modernization of electrical energy industry is the key factor in infrastructural development.
According to the general plan of building objects of electrical power for the North-West federal district, developed by “United Electric Systems” joint stock company together with the Ministry of Energy of Russia, by 2020 there will be built Beloporozhskaya hydropower station, Morskaya hydropower station, Segozerskaya hydropower station, as well as reconstruction and technical re-equipment of a number of small hydropower stations and of Petrozavodsk heating plant, together with construction of new electric lines with the voltage of 330, 220, 110 and 35 kilovolt.
One of the ways to solve the problem of the lack of electricity may be reconstruction of the existing objects, as well as revival of the small hydropower stations; first agreements in this sphere have already been made.
An agreement between the Republic of Karelia and “Nord Gydro” joint stock company confirms the results of previous negotiations and is a great example of the possibilities of the constructive cooperation between authorities and business.
The task of the project is reconstruction of small hydropower stations on the territory of the Republic with the goal of providing additional power of 100 Megawatt and including these stations into the united system of electrical energy. During 2009-2015, 46 objects will be put into operation in Lahdenpohya, Prionezhsky, Kalevala, Pitkyaranta, Pudozh and Meusersky municipal districts. The overall amount of investments will be 4.455 billion rubles.
 Within the programs of “United Electric Systems” joint stock company and of “Karelenergo” joint stock company, implementation of which is planned by 2011, 11.1 billion rubles and 7.9 billion rubles will be spent respectively for new construction and reconstruction of objects of the United National Electrical Net and electrical net objects with the voltage of 35 kilowatt and more, situated on the territory of the Republic.
According to the Agreement between the Government of the Republic of Karelia, Administration of the city of Petrozavodsk, and “TGK-1” joint stock company, during 2008-2015 there will be implemented an investment program of developing the heat supply of Petrozavodsk. A large-scale reconstruction of Petrozavodsk Heating Plant is planned, by means of building an additional energy generating unit and reconstruction of heating pipelines. The amount of investments will be 7.5 billion rubles. The implementation of the project will make it possible to eliminate technical limitations and will allow new consumers to get connected to the heating pipelines.
Today, in the Republic of Karelia the main types of energy carriers used in the housing and utilities sphere are the products of oil processing, coal, and natural gas, which are supplied from other regions (more than 70%).
Taking into consideration that the prices of fuel oil and coal are constantly rising, the policy of the Government of the Republic of Karelia is directed towards using the local fuels: peat, logging and lumbering waste.
Great reserves allow using peat for energy and heat production in different parts of the Republic of Karelia. According to the data of the Karelian Research Center of the Russian Academy of Sciences the annually regenerating peat reserves (natural growth) is about 5 million cubic meters.
Total area of surveyed swamps in the Republic of Karelia is 2.57 million hectares, of which commercially usable are 700,000 hectares.
Total volume of the explored useful peat reserves is over 5 billion cubic meters (2 billion tons). The major peat deposits are in the central and northern parts of Karelia.
At the same time, in spite of the large quantity of peat deposits, commercial use of peat is in its initial stage and does not belong to leading branches of the economy of the Republic.
Extra-budgetary investments in developing the fuel industry of the Republic of Karelia in 2007 was 37.39 million rubles; this money was used to prepare the peat areas for commercial use; peat fields have been prepared for peat extraction in Pryazha, Sortavala, Olonets and Pitkyaranta districts. At the same time, taking into consideration the resource base and the projected development of the republican fuel industry, the Republic of Karelia urgently needs additional investments to develop local types of fuel. At present, fuel industry of the Republic is in its initial stage of development, and in future it will become one of the leading branches of industry. In 2003, with participation of “Rostoprom” joint stock company (Moscow), “Rostoprom-Karelia” company, specializing in peat extraction, was organized; at present it is extracting peat in Pryazha and Olonets district, and provide fuel for heating the city of Olonets.
“Malaya Energitika” joint stock company (Moscow) has been working in Karelia since 2003. It participated in reconstruction of boiler facilities and re-equipment them to use local fuel in the towns of Vyartsilya, Salmi, Kaalamo; a new boiler facility was built in Helulya. In cooperation with “Vapo” concern, in 2007 “Karelenergoinvest” joint stock company was organized.
Cooperation with “Vapo” concern (Finland) started in 1995, when “Karel-Vapo” joint venture was organized. At present, it is producing local types of fuel (peat, chips) in Sortavala and Lahdenpohya districts.
Lahdenpohya, Pitkyaranta and Pudozh districts have peat areas which are practically ready for commercial extraction (peat was extracted there before); they also have heating sources, which are designed for using peat and firewood.
In Suoyarvi, Prionezhsky, Medvezhyegorsky, Kalevala and Louhi districts geological research have been conducted and general meliorative work has been done. It is possible to reconstruct heating sources so that could use local types of fuel.
In 1996 the gas pipeline Volkhov- Petrozavodsk was built. Petrozavodsk Heating Plant, «Petrozavodskmash», «Avangard» shipbuilding factory and other industrial objects started using natural gas. According to the Agreement on Cooperation between the
Government of the Republic of Karelia and «Gazprom» joint stock company, the construction of the gas pipeline Petrozavodsk-Kondopoga was completed. Natural gas came to Kondopoga pulp and paper mill. Provision of gas supply for the domestic use in Petrozavodsk is continuing as well as transferring industrial boilers to natural gas.
The new stage of installation of gas service in Karelia is connected with the project of development of Stockmann gas condensate deposit.
The project of developing the largest in the world deposit of gas condensate, which is being implemented by “Gazprom” joint stock company, includes construction of the main gas pipeline 689 kilometers long, as well as building a number of compressor stations. The amount of supply of gas to the consumers is planned to be 2.5 billion cubic meters per year. The amount of capital investments into the objects situated in the region, will be about $2-3 billion, depending on the variant of development. The construction of gas pipeline infrastructure in the Republic will trigger the growth of production in other areas. All the time frames being approximate now, the construction on the territory of the Republic will begin in 2009-2010 and will be over by 2015.