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23 May 2016 year Renova Sets Its Sights on Import-Substitution. - Kommersant
ROTEC Wants to Capture a Share of the Gas-Turbine Service Market

ROTEC, a Renova company, intends to compete in the gas-turbine service area with GE, Siemens and other manufacturers. Their turbines have been installed in almost all new HPPs, and foreigners dictate servicing prices in hard currency. For this reason, Russian generating companies are finding it increasingly difficult to stay within the operational costs shown in their investment projects. ROTEC intends to squeeze out the competition by localizing production of the most expensive components of the Russian hot-gas path – turbine blades, whose Russian-made versions will cost 15% less.

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Photo of "Kommersant"

ROTEC, the owner of the Urals Turbine Plant, which is part of Renova, is set to start work on restoring parts for the hot path of gas turbines – the production of components began on Friday in Ekaterinburg. The first stage of the project will cost some RUB 1 bln. The new facility will carry out finishing operations under the manufacture and repair of turbine blades. The full cycle of hot-path components for large gas turbines will be localized by 2018, ROTEC said. The total amount of investments will be around RUB 2 bln.

ROTEC has been targeting the market for the servicing of modern steam- and gas- generator equipment (SGGE) built according to capacity supply contracts (CSCs) for the past seven years. New GE, Siemens and Alstom gas turbines were acquired for the SGGEs, and service contracts were usually signed with the same companies. Servicing expenses for a gas turbine over the course of a decade are roughly equal to the price of new equipment, an industry source told Kommersant. Following the ruble’s devaluation, it has become difficult to meet the operating costs shown in CSCs. The Council of Power Producers Association plans to initiate the reconsideration of operational costs in CSCs with the use of the currency coefficient. Head of Gazprom Energy Holding (GEH) Denis Fedorov, however, said in April that companies are trying to recalculate services in rubles where possible.

According to ROTEC, Russia currently has some 150 foreign-made turbines in operation. The company’s share of the turbine service market in the Russian Federation is about 20%, with a service portfolio of some RUB 20 bln, Mikhail Lifshits, General Director of ROTEC, Director for the Development of Hi-Tech Assets at Renova, told Kommersant. Once production begins, the project portfolio will grow, he says. The holding services gas turbines for almost every generating company under short-term contracts. Long-term contracts have been in place for several years with the GEKH and T Plus companies of Viktor Vekselberg, with a total of 25 turbines being serviced. Representatives of InterRAO and Fortum Companies were present at the opening ceremony.

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The components, which will be produced in Ekaterinburg, are intended for 60-180 MW gas turbines, which accommodates Russia’s entire turbine park – at least when it comes to large systemic HPPs, Mikhail Lifshits said. Restoring hot-gas path components is the most expensive part of the service, with replacement required every two or three years. “We are ready to optimize the expenses of generating companies in terms of restoring hot-path elements by 15% as compared to foreign competitors,” the top manager said. ROTEC settles contracts in rubles, but, he said, some parts will still be unprofitable to make in Russia.

Energy sector professionals say that gaining access to the technologies involved in servicing foreign-made turbines is quite complex. “These companies are very closed; they do not share their technical drawings, their design specifications, and request that video cameras be turned off when their experts are on site,” said Parviz Abdushukurov, Deputy General Director of Fortum, in 2015. The company does employ repair technicians, but the technologies behind the spare parts are not for sale. Spare parts comprise 75% of the repair costs of hydroturbine equipment, and the prices are dictated by the monopolist. Last fall, E.ON Russia said that the company was working on reducing the currency component of the service and attracting Russian suppliers. They noted that while GE was showing some flexibility by opening spare parts warehouses in Russia and putting together repair technician teams, Siemens was not ready to do anything to cut customer expenses.

Anastasia Fomicheva
For more details see: http://kommersant.ru/doc/2994192

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