Russia will keep the Siemens turbines

New power stations in the Crimea should start operating in a year, so there's no chance to find a replacement.
The government commissioned to put into operation the Simferopol and Sevastopol TPPs in the Crimea in the middle of next year. The order of this was published today, August 31. The commissioning of the first blocks of power plants is scheduled for May 19, 2018, the second - on June 18, 2018. The order specifies that steam-gas plants with a capacity of 235 MW should be used as the main equipment at power plants. The only CCGTs that are suitable for this description are the Siemens turbines already supplied by Technopromexport to the Crimea and are the subject of legal proceedings between the companies.

There is not only nothing to replace Siemens turbines in the Crimea, there will not be enough time for this, says Sergei Pikin, director of the Energy Development Fund. "It will take about six months to install the equipment. Therefore, we need to use those turbines that have already been supplied to the Crimea, despite the remaining legal issues, "Pikin said.

 The power grid of Crimea is experiencing a large capacity deficit, this makes us hurry with the construction of a TPP, says Natalia Porokhova, head of the research and forecasting group of ACRA. "Energomost with the peninsula was introduced in a very short time. But the hot summer led to a series of shutdowns and once again stressed the need to reduce dependence on electricity supplies from Ukraine as soon as possible, "says Porokhova. This is a matter of reducing political tension and social risks, the expert believes. "Despite the fact that the situation with turbines remains complicated, and each of the parties to the arbitration process insists on its rightness, it is unlikely that this decision will fundamentally change something now," Porokhova said.

Serious tightening of sanctions by the EU, Russia should not be expected in any case, believes vice president of the Center for Political Technologies, Aleksey Makarkin. "A maximum - something else symbolic will be introduced. We will give the same symbolic answer. This is the worst thing that can happen. Then the whole story will be forgotten. Serious strengthening of sanctions is not interested in either Siemens or Germany, "Makarkin said.

Europe is unlikely to initiate new sanctions and will try to prevent further scandal, said the director of the Moscow office of Urus Advisory Alex Panin. "If there is such an opportunity, the history with the turbines will try to descend on the brakes. All, of course, continue to monitor the development of the process, but now we are waiting for "legal ping-pong." On the Russian side, they will say that the equipment was sufficiently localized and sanctions could not spread to it. Siemens - to insist that he did not know about the breach of the contract, he tried to redeem the turbines and, in general, did everything he could. European lawmakers - that sanctions have already entered, and the German concern has nothing to blame anymore, "Panin suggests. The situation can become aggravated only in one case - if the Americans decide to fined Siemens, the expert shares his opinion. "I would not rule out such an opportunity," Panin said.

Initially, the commissioning of the first power units of the new Crimean power plants was scheduled for September 1 of this year. Later, Energy Minister Alexander Novak said that he moved to the I quarter of 2018. "The transfer of the timing of the launch of two TPPs in the Crimea is associated with the need for technical and control works," a representative of the Ministry of Energy said yesterday. According to him, the old terms regulated the completion of commissioning, and the new ones - the full commissioning of the facility after all necessary checks by Rostekhnadzor and other interested bodies have been completed. "

The construction of power plants in Simferopol and Sevastopol is handled by the structure of the state corporation Rostek, OOO Tekhnopromexport. The TPP project envisaged the installation of four combined-cycle plants based on Siemens gas turbines. Due to the introduction of European sanctions against Russia, the concern refused to supply them, but sold four of the same units for the construction of a TPP in Taman to another structure of Rosteha, OAO Tekhnopromexport. Subsequently, the contractor of Taman TPP went bankrupt and put up the equipment for sale. The turbines ended up in the Crimea this summer. As soon as this became known, a scandal broke out. European authorities have launched an investigation into Siemens.

 The company itself reported that the turbines "were moved to the Crimea against the will" of the concern. On July 11, Siemens sued both Technopromexport. The concern also said that it is ready to buy out the turbines, and cancel the contract with the already defunct Technopromexport OJSC. The Moscow Arbitration Court considered the lawsuit filed by Siemens against Rostekh's structures on September 18, but refused to accept the interim measures.

A source close to Technopromexport said that the company had not received any letters or proposals from the Siemens to buy back the turbines. The Germans had such an opportunity last summer, Vedomosti's interlocutor explained, - when OAO Tekhnopromexport put turbines on sale due to financial problems. But Siemens did not show up for the tender. This is confirmed by the federal official. In the summer of 2016, the option was considered that the turbines bought by JSC "Technopromexport" will be used in Taman and for the construction of the Groznenskaya TPP (it is operated by OGK-2), he says. "It was planned to purchase turbines from the Iranian MAPNA in the Crimea. The Iranians have concluded a licensing agreement with Siemens, and now they produce turbines themselves. But some of the components are still purchased from the German concern, "the source of Vedomosti says," so the Germans banned the sale of turbines for the Crimea, threatening Iran to stop cooperation. " As a result, Technopromexport did not have any other options than to take the already purchased turbines to Crimea, he concludes.

Under the law, Siemens can claim either to return the property, or to compensate for its full cost (the price of one turbine is about 27.95 million euros), believes BMS Law Firm partner Denis Frolov. "The second option is possible not only if turbines are installed at TPPs, but also when they can not be exported," the lawyer said. "Moreover, if such is provided for by the original terms of the contract."