RusHydro May Spend Record $3.3Bln

RusHydro, the world’s second-largest hydropower producer, said Monday that capital expenditures might reach a record 78 billion rubles ($3.3 billion) this year after building costs more than doubled in the last two years.
RusHydro is setting aside 8 billion rubles to guard against cost overruns as it seeks to boost capacity 1.6 percent, or 410 megawatts, chief executive Vyacheslav Sinyugin said. RusHydro has more than 20 plants across the country.
“The era of cheap electricity is over,” Sinyugin said. “Projects are getting more and more expensive at a rate higher than official inflation.”
Construction costs have jumped to about $3,000 per megawatt of capacity in Russia and to $5,000 in Canada from $1,000 just two or three years ago, Sinyugin said.
State-run RusHydro, also known as Hydro-OGK, plans to almost double capacity and overtake Canada’s Hydro-Quebec by 2020 as Russia encourages the electrification of remote regions to power drilling and mining projects. It also wants to start exporting electricity to China and enter the Indian market. Sinyugin said he would select one of 10 projects put forward by India’s Sun Group by year’s end.