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Electrical Grid Sector Development: Promising Area of Russia-Germany Cooperation


As part of the thirteenth round of Russian-German intergovernmental consultations in Hannover on July 19, IDGC Holding, the Russian-German Energy Agency (rudea), the German Energy Agency (dena), and Siemens AG signed the Memorandum of Understanding. The document was signed by Nikolay Shvets, Director General of IDGC Holding; Udo Niehage, Chief Executive Officer of Power Transmission Division of Siemens AG; Thomas Hendel, General Director of rudea; and Stephan Kohler, Chief Executive of dena, in the presence of President of the Russian Federation Dmitry Medvedev and Chancellor of the Federal Republic of Germany Angela Merkel.

The Memorandum sets out the Parties’ intentions with respect to cooperation in the comprehensive modernization of IDGC Holding’s electricity distribution grid facilities for the purpose of enhancing its reliability and efficiency. The partnership is aimed at achieving a substantial reduction in electricity losses in Russian electricity distribution networks. It is planned that Siemens equipment and systems based on such equipment will be produced, installed, and used to fulfill the requirements of IDGC Holding’s operating subsidiaries.

In accordance with the Memorandum, Siemens AG plans to design and deliver the equipment and systems agreed upon by the Parties (specifically, automation systems, transformer substations, etc.) and provide long-term aftersales service support and maintenance for them. If necessary, the partners will investigate the possibility of creating new facilities and service centers in Russia for the production and maintenance of Siemens equipment and systems.

“Energy efficiency has always been a priority in our products, equipment, and systems for electricity transmission, distribution, and generation. Owing to carrying out the planned projects in Russia, we intend to make a significant contribution to not only the improvement of grid infrastructure countrywide, but also the enhancement of energy efficiency through the use of modern cogeneration units. In this connection, we find it very important to be an active local player. For instance, we operate a site for medium voltage equipment assembly at Dubna, near Moscow. In Voronezh, 500 kilometers from Moscow, we opened high voltage equipment factory recently. We are planning to set up a transformer factory in the same city next year to be followed by the launch of switchgear production,” said Udo Niehage, Chief Executive Officer of Power Transmission Division of Siemens AG.

As the controlling shareholder, IDGC Holding will ensure project implementation on the part of Interregional and Regional Distribution Grid Companies, with the conditions for economic efficiency and technical and organizational feasibility to be satisfied, and will supervise the installation, startup, and day-to-day running of the equipment agreed upon by the Parties.

“For us, the Memorandum offers prospects for fruitful cooperation with a view to enhancing the efficiency and system reliability of Russia’s electricity distribution grid sector,” said Nikolay Shvets, Director General of IDGC Holding. “The core of the partnership is to attain a substantial reduction in electricity losses in distribution networks. Specifically, it is planned to find optimum solutions for upgrading 0.4-kV networks to the 10-kV voltage class because 0.4-kV facilities cause most problems for the electricity distribution grid sector, which suffers from the highest electricity losses.”

As agreed by the Parties, rudea is responsible for formulating necessary technical, economic, and organizational project implementation plans, structuring and managing the project in the implementation phase, and attracting potential investors to the project.

“This cooperation is an excellent example of the fruitful relationship between Russian and German business as part of the task of modernizing the country as set by the Russian leadership,” Thomas Hendel, General Director of the Russian-German Energy Agency (rudea), emphasized. “A reduction in electricity losses in distribution networks and their overall rehabilitation based on the implementation of up-to-date German technologies are in the corporate interests of the participating companies and pursue the goal of enhancing the energy security of Russian industrial enterprises and people.”

Dena is responsible for consultant advice, the integration of German companies’ know-how, technologies, and advanced experience, and further training events for executives of Interregional and Regional Distribution Grid Companies to be held in Germany.

“Our arrangements strengthen the long-time and reliable partnership between Russia and Germany and clarify the role and importance of implementing energy efficiency for both countries. This is an equal partnership: Russia’s grid infrastructure becomes more modern, more efficient, and thus more competitive, while German companies use energy-efficient technologies to enter new markets and establish partnership ties,” Stephan Kohler, Chief Executive of the German Energy Agency (dena), underlined.

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