Project deals with upgrading, completing and commissioning the 3rd unit of the Kalinin NPP.
The construction of unit 3 started in 1985 according to the original design for the Soviet VVER-1000 (model V-320). For the known deficiencies in this design, safety upgrades have been envisaged and will be implemented. As Kalinin-3 is currently 60% complete, the proposed projects present an opportunity to retrofit the existing design to meet internationally recognized safety objectives as applied to western plants of the same generation.
In order to establish the eligibility of the project for a Euratom loan and to confirm the proper implementation of the project, studies and consultancies are to be performed within this project.
The present project deals with the Economical Analysis of Kalinin 3.
At the beginning of the present study, it became clear that the Kalinin NPP unit 3 project presented definite advantages since the project was already partly realised and was more attractive than any other one from both points of view of investment cost per MWh and production cost per MWh. However, those considerations were not sufficient to conclude that the project had to be decided because the project must still be consistent with the demand structure (load-duration curve) and with the existing transmission possibilities.
According to the results of the present project, the (discounted) benefit generated by the project has been evaluated to 276 000 000 US$. It is equivalent to the supplementary amount of money that must be spent if an equipment plan would be conceived without the Kalinin project. This benefit is not very sensitive to a modification of investment cost for gas production units and to a modification of gas price. It is not very sensitive to an increase of the interest rate either. With a decrease of the interest rate, the benefit grows rapidly. The benefit represents 40% of the project investment discounted cost.
It must be noted that the reference case corresponds to a very moderate yearly growth rate for the demand (1%). The modification of the cost for the completion of the Kalinin 3 NPP -estimated to 400 000 000 US$ in the present study- has a direct impact on the benefit generated by the project. An increase of the (discounted) cost of the project would reduce the benefit of the project by the same amount.
In order to obtain a zero benefit the (undiscounted) cost of the project should increase from 400 000 000 US$ to 743 500 000 US$. Finally, the consequence of a later commissioning year for the project (2002 instead of 2001) is a decrease of benefit from 276 000 000 US$ to 263 600 000 US$ and the consequence of a uniform time schedule for payments for the project is a decrease of benefit from 276 000 000 US$ to 262 600 000 US$
The results of the Project Report (Chapter Economical Analysis-case with high demand) are related to a 3% yearly growth rate for the demand (case with high demand). The (discounted) benefit generated by the project is now equal to 321 000 000 US$ and represents 47% of the project investment discounted cost.
The results of the Project Report (Chapter Least-cost analysis-case with low demand) are related to a 0% yearly growth rate for the demand (case with low demand). The (discounted) benefit generated by the project is now equal to 261 000 000 US$ and represents 38% of the project investment discounted cost.
The studies performed in the present project permits to conclude that the Kalinin project is economically justified, even in the case of a zero load growth rate (case with low demand).
It means that the project should be realised as soon as possible for any demand scenario.