Will there be an energy crisis in Siberia? Energy issues are being discussed at a federal level.
Electricity Woes in Siberia: A Disaster in Waiting?
It's a chilly reality in four Siberian regions — Krasnoyarsk Krai, Khakassia, Buryatia, and Zabaykalsky — where a severe crisis looms in the electricity supply system. The culprit? Worn-out electric infrastructure and outdated tariffs that don't align with actual operating costs. The media has picked up on this pressing issue.
The troubles stem from various factors, as reported by "Lenta.ru" with letters from electricity company "Rosseti Sibir" to regional leaders:
For instance, in Krasnoyarsk Krai, more than 82% of the electric grid is worn out, as is over 76% in Khakassia. Similar scenarios unfold in Buryatia and Zabaykalsky.
On top of that, the company wrapped up 2023 with a loss of 3 billion rubles, with a credit burden of 47 billion. According to the first half of 2024 data, the situation doesn't seem to have improved.
Due to the lack of tariff regulation, energy companies are forced to cut back on repair and new construction expenditures. In 2025, funding for repairs may drop by half, and all new projects could be put on ice.
According to the head of the Energy Committee in the State Duma, Nicholas Schulginov, overloaded substations have already led to energy shortages in several areas of Siberia.
Is the Power Out?
The stereotype in Siberia is that the abundance of large hydroelectric power stations ensures cheap electricity. However, more than half of the electricity production is done through thermal power stations, which require substantial costs. To maintain low tariffs for end-users, companies had to scrimp on maintaining distribution networks, which led to their critical deterioration. Adding to the problem, electricity consumption is rising both due to economic growth and the shift to electric heating, and increasing cryptocurrency mining.
The problem is exacerbated by debts from consumers, including utility bills and subsidized connections to networks.
For example, in Krasnoyarsk Krai, the funds required for all agreements in the subsidized category exceed 8 billion rubles, but funds allocated for these purposes amount to only one billion. Learn more about this here.
Regulatory Agreements: The Silver Bullet?
The primary solution proposed is the establishment of regulatory agreements between energy companies and regional authorities, spanning ten years. This mechanism has already been employed in other Siberian regions like the Kuzbass, Omsk, and Tomsk Oblasts.
These agreements provide long-term tariffs for stable company operations, investments in infrastructure modernization, and ensure subsidized connection services.
As an example, the Kuzbass saw energy companies commit to investing 32 billion rubles in grid reliability, and the region, in return, provided a clear tariff policy.
Another possible solution is the creation of a unified tariff zone for Siberian regions, with the power to set tariffs transferred to the Federal Antimonopoly Service of Russia.
If the issue remains unaddressed, the repercussions could be severe.
During peak loads, electricity supply could be restricted to 100 megawatts, affecting nearly 70,000 people. New connections may even be halted. To top it off, a reduction in repair costs would lead to a decline in grid reliability and an increased risk of accidents.
According to various experts, systemic problems require systemic solutions.
Introduction of regulatory agreements could ensure a balance between energy companies' obligations and the financial capabilities of regions. Transition to a standard definition of operational costs would also enhance tariff-making transparency. While tariffs for the general public remain stable, a rise for other consumers may amount to around 2% with a 10% increase in the transmission tariff.
[Image Credit: "Rosseti Sibir"]
- The media has been covering the critical situation in the electricity supply system of four Siberian regions, including Krasnoyarsk Krai, Khakassia, Buryatia, and Zabaykalsky, due to worn-out electric infrastructure and outdated tariffs.
- The energy industry in Siberia is facing financial struggle, with energy companies like Rosseti Sibir ending 2023 with a loss of 3 billion rubles and a credit burden of 47 billion.
- Experts suggest that regulatory agreements between energy companies and regional authorities, as seen in other Siberian regions like the Kuzbass, Omsk, and Tomsk Oblasts, could be the key to resolving the crisis.
- In the realm of personal finance and business, a potential solution posed is the creation of a unified tariff zone for Siberian regions, which would allow the Federal Antimonopoly Service of Russia to set tariffs.
- If the electricity crisis remains unaddressed, it could lead to severe consequences, such as the restriction of electricity supply to 100 megawatts, affecting nearly 70,000 people, and halting new connections. On the economic front, this could result in a decline in grid reliability, increased risk of accidents, and a 2% rise in tariffs for certain consumers with a 10% increase in the transmission tariff.
