Environmental & Social Review Summary
Project Number
7673
Company Name
AO MOSENERGO, NPF
Date ESRS Disclosed
Feb 5, 2010
Country
Russian Federation
Region
Europe
Last Updated Date
Dec 31, 2016
Environmental Category
B - Limited
Status
Completed
Previous Events
Approved : Feb 10, 1998
Signed : Jun 18, 1998
Invested : Apr 6, 1999
Sector
Gas - Thermal Power Generation
Industry
Infrastructure
Department
Regional Industry INF LAC & EUR
Project Description
- 6 - December 31, 1997
International Finance Corporation
A Member of the World Bank Group
International Finance Corporation
A Member of the World Bank Group
Environmental Review Summary (ERS)
Project Name Russian Federation - Mosenergo
Region Europe
Sector Infrastructure
Project No. 007673
1. This project is to provide Mosenergo with a corporate loan for completion of the partially operating Zagorsk pumped storage hydro power station, and working capital of the company. Mosenergo is one of the largest vertically integrated utilities in Russia that generate, transmit and distribute heat and electricity. Mosenergo serves a market of 16 million people through the metropolitan Moscow area, of which 9 million consumers live within Moscow’s city limits. Mosenergo has 18 thermal power stations totaling 10,701MW of installed electricity generating capacity plus about 16,000 Gcal/h of heat capacity and one pumped storage hydroelectric power station (Zagorsk) with 1,000MW generating capacity. Mosenergo is producing about 8 per cent of total Russia’s electricity generation and about 13 per cent of heat generation. The company also has 13,665 km of transmission lines and 101,551 km of distribution lines.
2. The project will enable Mosenergo to complete Zagorsk, which will significantly improve the demand/supply balance of the company’s electricity system, increase generation of valuable peak energy, and reduce the need for peaking thermal power generation. The project will also contribute to the company’s strengthened long-term debt-financing capability which will be crucial for Mosenergo to implement its capital investment program to refurbish and expand electricity and heat networks and electricity generating capacity.
3. This is a category B project according to IFC’s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising an environmental audit and analysis report prepared by an independent environmental consulting firm on Mosenergo’s corporate environmental performance and Zagorsk’s environmental impacts, and the technical appraisal and site review completed by IFC’s technical and environmental staff. The following potential environmental, health and safety impacts of the project were analyzed:
· environmental impact of completing the Zagorsk pumped storage hydro power plant including impacts from land take and changes in land use, land forming and construction impacts, hydrological as well as hydrogeological impacts; and
· environmental audit of Mosenergo’s corporate operation and programs to move existing facilities towards compliance with appropriate World Bank environmental policies and guidelines, and Russian environmental, health and safety laws and regulations.
Zagorsk pumped storage hydro power station
4. The Zagorsk pumped storage hydro power station is located about 150 km east of Moscow, in the Sergiev Posad District of the Moscow Region, on the left bank of the Kunya River, a tributary of the Dubna River. It is designed as a 1,200MW pumped power storage power station. Construction began in 1980 and after a series of stops and starts has reached 87 per cent completion. Currently, the station has five hydro storage pump units of 200 MW each totaling 1,000 MW, an upper reservoir of 9.7 million cubic meters with a water surface area of about 2.4 square kilometers, and a lower reservoir of 20 million cubic meters covering an area of 2.5 square kilometers. Five conduit penstocks are used to connect the two reservoirs with an elevation difference of over 100m. The station has been operational since 1987 by pumping water to an upper reservoir for use in generating 1,000MW electricity during peak hours. The project will enable Mosenergo to complete the final sixth 200MW unit, making the total generating capacity of the station 1,200MW.
5. The completion project will involve an expansion of the upper reservoir capacity from 9.7 million cubic meters to 22 million cubic meters by extending the peripheral dikes by about 8 km, and an installation of the sixth conduit penstock to serve the final pumping generating unit.
6. The total landtake for the completed Zagorsk station is about 1,900 ha, of which about 200 ha will be used to extend the existing upper reservoir. All land necessary for the construction of the completed project has been acquired and compensation paid as required under Russian law. After completion of the station 57% of the river catchment will remain under woodland. This complies with the state requirement to maintain 45% of the area under this land use.
7. An excavation of about 40 million cubic meters will be done at the extension of the upper reservoir and will be reworked within the site. Low permeability clay-loam material will be used to construct the reservoir floor. Heavy equipment is brought in by rail, to Naugolnaya, 17 km from the site. No adverse impacts with heavy transport and dust generation are expected.
8. Installation of the conduits has required cutting into the hillside and stabilizing the side embankments. In the past, land slips have occurred at least four locations due to presence of green clays and complex sub-surface strata, poor slope stabilization techniques during initial land forming works, fluctuations in groundwater levels and complicated hydrogeological linkages in subsurface strata, and long term settlement since excavation and placement. Some stabilization work has been carried out, but the station needs to complete the implementation of geotechnical monitoring and landscape restoration programs, to provide adequate long term management of critical slopes.
9. The principal hydrological impacts would be associated with sedimentation in the lower reservoir. With the enlargement of the upper reservoir, the increased discharge from six, instead of five, conduit penstocks will change moderately the existing sedimentation regime. Full load flows are likely to alter sediment deposition profiles and to increase water turbidity under storage and generation pumping cycles, but incremental impacts are not significant.
10. Surface water within the Kunya catchment is contaminated by industrial, agricultural and domestic wastewaters. Storage within the lower reservoir enhances natural ‘self-purification’ processes and minor improvements in water quality have been observed. This positive impact is likely to increase with the increase of system storage capacity.
11. There is a radioactive waste disposal facility located 9 km east of the station that maybe affected by, or could influence the groundwater regime at the Zagorsk station. The risk to groundwaters was investigated by the Ministry of Ecology, who concluded that the potential for groundwater contamination is low. The station and the disposal site are located in separate groundwater catchments, and groundwaters from the two sites are unlikely to flow in the same groundwater system.
12. The environmental impact assessment (EIA) reports have been produced to cover the existing station in 1991 and the subsequent extension to the upper reservoir in 1993. At the request of the State Environmental Review Committee, the second EIA considered the combined impact from the two phases of development. Organizations that have reviewed the EIAs included State Environmental Review Committee, Scientific Research Institute - Hydroproject, and the Ministry of Power. Their review of the EIA concluded that there would be minimal additional impact of the proposed extension, and requested that an adequate environmental monitoring scheme should be developed.
13. When the existing station was planned, there was no formal procedure or requirement for public consultation. The public has been notified of the new project through the local press, but no formal discussions with local groups has occurred. No adverse public response has been received to the published information.
14. Mosenergo has proposed a range of mitigation and management activities in collaboration with regulatory authorities. These include slope stabilization measures, construction of a municipal wastewater treatment plant, prohibition of new industrial, agricultural and construction activities inside the water protection zone around the upper and lower reservoirs, and environmental monitoring schemes for terrestrial and aquatic monitoring and geotechnical monitoring.
15. Zagorsk dam and embankment safety is excellent. There are four full time inspectors monitoring the reservoir and 1,600 sensors are buried in the physical structures. World Bank Operational Policy 4.37 regarding dam structural security is adhered to.
16. All these mitigation and management activities will be included in the Environmental Action Plan (EAP) for Zagorsk which will be prepared by Mosenergo. The implementation of the EAP for Zagorsk will be committed by Mosenergo in the legal agreement between the company and IFC and will be closely monitored by IFC.
Corporate environmental management system
17. Since 1990, environmental policies have been given a higher profile in Mosenergo, and the company has a Board member appointed in charge of environmental affairs. Responsibility for regulatory compliance is passed down to each power station manager, but environmental monitoring and reporting to the authorities is centralized through a newly created Environment Department at the headquarters.
Environmental regulation and fees/penalties
18. Environmental regulation in Russia is evolving rapidly and there is a general movement towards the application of the Western environmental standards. The main law for environmental issues is “The Law of the Russian Federation on the Protection of the Environment”. Emissions of pollutants are regulated by toxicologically-based Maximum Permissible Concentrations (MPC), and each power station has to obtain from the authorities environmental permits based on Maximum Permissible Emission (MPE) levels. Where emissions exceed MPE values, Temporary Agreed Limits (TAL) may be given.
19. Environmental fees are charged to power stations with emissions within the TAL, and penalties are charged to power stations with emissions exceeding TAL. These fees and penalties are charged for air emissions, liquid effluents, and solid waste disposal. From 1993 to 1995, only environmental fees were charged, but not penalties, indicating that in general, the company is in compliance with Russian regulations. All power stations are required to provide the authorities with emission data on a quarterly basis and waste water discharges annually.
Air quality and stack emissions from thermal power stations
20. Over the last 20 years, Mosenergo has reduced SO2 and particulate emissions from thermal power stations significantly by switching fuel from coal and oil to natural gas, substituting small obsolete heating plants with more efficient centralized stations, and upgrading combustion patterns and equipment at heating plants. Gas fired power stations account for over 90 percent of existing generating capacity of Mosenergo, and the major concern for the city of Moscow is pollution from NOx, which still needs to be reduced.
Waste management
21. The environmental audit report shows that waste management practice at some power stations were identified by authorities as poor, and environmental penalties were charged in 1996. Regulatory orders have been imposed on Mosenergo to provide responsible personnel to manage waste disposal operation, provide production transportation and disposal manifest documentation, secure the necessary regulatory authorizations and permits, and clear and remediate illegal waste disposal dumps. Mosenergo has started developing a waste management plan for approval by the local authorities.
PCBs and Asbestos
22. Mosenergo is of the view that it does not use PCBs containing equipment and has limited use of asbestos. IFC will monitor the issue of PCBs and asbestos use during the supervision of the project.
Worker health and safety
23. New employees of Mosenergo receive preliminary off-site and advanced on-site training in conjunction with the regulatory authorities. Refresher training is carried out annually. Key elements of the training program include the use of personal protection equipment, the management of risks at the workplace, environmental damage (noise, vibration, temperature, dust, light, electromagnetic radiation) and first aid.
Environmental Plan to 2010
24. Mosenergo has developed a Strategic Environmental Program to the year 2010 that identified pollution control measures to improve the company’s environmental performance. This program was approved by the Moscow City government in 1993. By implementing the Program, the company plans to achieve full regulatory compliance by 2010 by reducing air pollutant emissions, waste water discharges, and noise levels at older power stations.
25. Under the Program, NOx emissions will be reduced by the installation of flue gas recirculation, low NOx burners, multi-stage burners, Selective Catalytic Reduction (SCR), and closure of obsolete boilers. NOx emissions are expected to be reduced by over 63 percent in 2010 compared to the 1993 level.
26. To reduce liquid effluent discharges, the Program proposes to implement measures to reduce water demand, and to improve water and wastewater treatment. The measures include replacement of water cooling with air cooling systems, upgrading cooling towers, initiatives to recycle waste cooling water and treated waste water, and introduction of oil water separators.
27. Ambient noise levels will also be reduced by installation of silencers on exhaust vents and safety valves, sound insulation on pipework, and equipment enclosures.
28. The implementation of the Program will move the operation of Mosenergo towards compliance with the World Bank environmental guidelines.
29. IFC will monitor Mosenergo’s progress in implementing the EAP for Zagorsk, and the Strategic Environmental Program to the year 2010 and the company’s ongoing compliance with World Bank environmental, health and safety policies and guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by Mosenergo and by conducting periodic supervision.
30. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures for Zagorsk and corporate wide environmental performance and management system of Mosenergo, IFC concludes that, with the implementation of the EAP for Zagorsk, the completion of Zagorsk will meet World Bank environmental, health and safety policies and guidelines and Russian requirements, and with the implementation of the Program to the year 2010, the overall corporate performance of Mosenergo will move towards compliance with the World Bank environmental, health and safety policies and guidelines and Russian requirements.
International Finance Corporation
A Member of the World Bank Group
International Finance Corporation
A Member of the World Bank Group
Environmental Review Summary (ERS)
Project Name Russian Federation - Mosenergo
Region Europe
Sector Infrastructure
Project No. 007673
1. This project is to provide Mosenergo with a corporate loan for completion of the partially operating Zagorsk pumped storage hydro power station, and working capital of the company. Mosenergo is one of the largest vertically integrated utilities in Russia that generate, transmit and distribute heat and electricity. Mosenergo serves a market of 16 million people through the metropolitan Moscow area, of which 9 million consumers live within Moscow’s city limits. Mosenergo has 18 thermal power stations totaling 10,701MW of installed electricity generating capacity plus about 16,000 Gcal/h of heat capacity and one pumped storage hydroelectric power station (Zagorsk) with 1,000MW generating capacity. Mosenergo is producing about 8 per cent of total Russia’s electricity generation and about 13 per cent of heat generation. The company also has 13,665 km of transmission lines and 101,551 km of distribution lines.
2. The project will enable Mosenergo to complete Zagorsk, which will significantly improve the demand/supply balance of the company’s electricity system, increase generation of valuable peak energy, and reduce the need for peaking thermal power generation. The project will also contribute to the company’s strengthened long-term debt-financing capability which will be crucial for Mosenergo to implement its capital investment program to refurbish and expand electricity and heat networks and electricity generating capacity.
3. This is a category B project according to IFC’s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising an environmental audit and analysis report prepared by an independent environmental consulting firm on Mosenergo’s corporate environmental performance and Zagorsk’s environmental impacts, and the technical appraisal and site review completed by IFC’s technical and environmental staff. The following potential environmental, health and safety impacts of the project were analyzed:
· environmental impact of completing the Zagorsk pumped storage hydro power plant including impacts from land take and changes in land use, land forming and construction impacts, hydrological as well as hydrogeological impacts; and
· environmental audit of Mosenergo’s corporate operation and programs to move existing facilities towards compliance with appropriate World Bank environmental policies and guidelines, and Russian environmental, health and safety laws and regulations.
Zagorsk pumped storage hydro power station
4. The Zagorsk pumped storage hydro power station is located about 150 km east of Moscow, in the Sergiev Posad District of the Moscow Region, on the left bank of the Kunya River, a tributary of the Dubna River. It is designed as a 1,200MW pumped power storage power station. Construction began in 1980 and after a series of stops and starts has reached 87 per cent completion. Currently, the station has five hydro storage pump units of 200 MW each totaling 1,000 MW, an upper reservoir of 9.7 million cubic meters with a water surface area of about 2.4 square kilometers, and a lower reservoir of 20 million cubic meters covering an area of 2.5 square kilometers. Five conduit penstocks are used to connect the two reservoirs with an elevation difference of over 100m. The station has been operational since 1987 by pumping water to an upper reservoir for use in generating 1,000MW electricity during peak hours. The project will enable Mosenergo to complete the final sixth 200MW unit, making the total generating capacity of the station 1,200MW.
5. The completion project will involve an expansion of the upper reservoir capacity from 9.7 million cubic meters to 22 million cubic meters by extending the peripheral dikes by about 8 km, and an installation of the sixth conduit penstock to serve the final pumping generating unit.
6. The total landtake for the completed Zagorsk station is about 1,900 ha, of which about 200 ha will be used to extend the existing upper reservoir. All land necessary for the construction of the completed project has been acquired and compensation paid as required under Russian law. After completion of the station 57% of the river catchment will remain under woodland. This complies with the state requirement to maintain 45% of the area under this land use.
7. An excavation of about 40 million cubic meters will be done at the extension of the upper reservoir and will be reworked within the site. Low permeability clay-loam material will be used to construct the reservoir floor. Heavy equipment is brought in by rail, to Naugolnaya, 17 km from the site. No adverse impacts with heavy transport and dust generation are expected.
8. Installation of the conduits has required cutting into the hillside and stabilizing the side embankments. In the past, land slips have occurred at least four locations due to presence of green clays and complex sub-surface strata, poor slope stabilization techniques during initial land forming works, fluctuations in groundwater levels and complicated hydrogeological linkages in subsurface strata, and long term settlement since excavation and placement. Some stabilization work has been carried out, but the station needs to complete the implementation of geotechnical monitoring and landscape restoration programs, to provide adequate long term management of critical slopes.
9. The principal hydrological impacts would be associated with sedimentation in the lower reservoir. With the enlargement of the upper reservoir, the increased discharge from six, instead of five, conduit penstocks will change moderately the existing sedimentation regime. Full load flows are likely to alter sediment deposition profiles and to increase water turbidity under storage and generation pumping cycles, but incremental impacts are not significant.
10. Surface water within the Kunya catchment is contaminated by industrial, agricultural and domestic wastewaters. Storage within the lower reservoir enhances natural ‘self-purification’ processes and minor improvements in water quality have been observed. This positive impact is likely to increase with the increase of system storage capacity.
11. There is a radioactive waste disposal facility located 9 km east of the station that maybe affected by, or could influence the groundwater regime at the Zagorsk station. The risk to groundwaters was investigated by the Ministry of Ecology, who concluded that the potential for groundwater contamination is low. The station and the disposal site are located in separate groundwater catchments, and groundwaters from the two sites are unlikely to flow in the same groundwater system.
12. The environmental impact assessment (EIA) reports have been produced to cover the existing station in 1991 and the subsequent extension to the upper reservoir in 1993. At the request of the State Environmental Review Committee, the second EIA considered the combined impact from the two phases of development. Organizations that have reviewed the EIAs included State Environmental Review Committee, Scientific Research Institute - Hydroproject, and the Ministry of Power. Their review of the EIA concluded that there would be minimal additional impact of the proposed extension, and requested that an adequate environmental monitoring scheme should be developed.
13. When the existing station was planned, there was no formal procedure or requirement for public consultation. The public has been notified of the new project through the local press, but no formal discussions with local groups has occurred. No adverse public response has been received to the published information.
14. Mosenergo has proposed a range of mitigation and management activities in collaboration with regulatory authorities. These include slope stabilization measures, construction of a municipal wastewater treatment plant, prohibition of new industrial, agricultural and construction activities inside the water protection zone around the upper and lower reservoirs, and environmental monitoring schemes for terrestrial and aquatic monitoring and geotechnical monitoring.
15. Zagorsk dam and embankment safety is excellent. There are four full time inspectors monitoring the reservoir and 1,600 sensors are buried in the physical structures. World Bank Operational Policy 4.37 regarding dam structural security is adhered to.
16. All these mitigation and management activities will be included in the Environmental Action Plan (EAP) for Zagorsk which will be prepared by Mosenergo. The implementation of the EAP for Zagorsk will be committed by Mosenergo in the legal agreement between the company and IFC and will be closely monitored by IFC.
Corporate environmental management system
17. Since 1990, environmental policies have been given a higher profile in Mosenergo, and the company has a Board member appointed in charge of environmental affairs. Responsibility for regulatory compliance is passed down to each power station manager, but environmental monitoring and reporting to the authorities is centralized through a newly created Environment Department at the headquarters.
Environmental regulation and fees/penalties
18. Environmental regulation in Russia is evolving rapidly and there is a general movement towards the application of the Western environmental standards. The main law for environmental issues is “The Law of the Russian Federation on the Protection of the Environment”. Emissions of pollutants are regulated by toxicologically-based Maximum Permissible Concentrations (MPC), and each power station has to obtain from the authorities environmental permits based on Maximum Permissible Emission (MPE) levels. Where emissions exceed MPE values, Temporary Agreed Limits (TAL) may be given.
19. Environmental fees are charged to power stations with emissions within the TAL, and penalties are charged to power stations with emissions exceeding TAL. These fees and penalties are charged for air emissions, liquid effluents, and solid waste disposal. From 1993 to 1995, only environmental fees were charged, but not penalties, indicating that in general, the company is in compliance with Russian regulations. All power stations are required to provide the authorities with emission data on a quarterly basis and waste water discharges annually.
Air quality and stack emissions from thermal power stations
20. Over the last 20 years, Mosenergo has reduced SO2 and particulate emissions from thermal power stations significantly by switching fuel from coal and oil to natural gas, substituting small obsolete heating plants with more efficient centralized stations, and upgrading combustion patterns and equipment at heating plants. Gas fired power stations account for over 90 percent of existing generating capacity of Mosenergo, and the major concern for the city of Moscow is pollution from NOx, which still needs to be reduced.
Waste management
21. The environmental audit report shows that waste management practice at some power stations were identified by authorities as poor, and environmental penalties were charged in 1996. Regulatory orders have been imposed on Mosenergo to provide responsible personnel to manage waste disposal operation, provide production transportation and disposal manifest documentation, secure the necessary regulatory authorizations and permits, and clear and remediate illegal waste disposal dumps. Mosenergo has started developing a waste management plan for approval by the local authorities.
PCBs and Asbestos
22. Mosenergo is of the view that it does not use PCBs containing equipment and has limited use of asbestos. IFC will monitor the issue of PCBs and asbestos use during the supervision of the project.
Worker health and safety
23. New employees of Mosenergo receive preliminary off-site and advanced on-site training in conjunction with the regulatory authorities. Refresher training is carried out annually. Key elements of the training program include the use of personal protection equipment, the management of risks at the workplace, environmental damage (noise, vibration, temperature, dust, light, electromagnetic radiation) and first aid.
Environmental Plan to 2010
24. Mosenergo has developed a Strategic Environmental Program to the year 2010 that identified pollution control measures to improve the company’s environmental performance. This program was approved by the Moscow City government in 1993. By implementing the Program, the company plans to achieve full regulatory compliance by 2010 by reducing air pollutant emissions, waste water discharges, and noise levels at older power stations.
25. Under the Program, NOx emissions will be reduced by the installation of flue gas recirculation, low NOx burners, multi-stage burners, Selective Catalytic Reduction (SCR), and closure of obsolete boilers. NOx emissions are expected to be reduced by over 63 percent in 2010 compared to the 1993 level.
26. To reduce liquid effluent discharges, the Program proposes to implement measures to reduce water demand, and to improve water and wastewater treatment. The measures include replacement of water cooling with air cooling systems, upgrading cooling towers, initiatives to recycle waste cooling water and treated waste water, and introduction of oil water separators.
27. Ambient noise levels will also be reduced by installation of silencers on exhaust vents and safety valves, sound insulation on pipework, and equipment enclosures.
28. The implementation of the Program will move the operation of Mosenergo towards compliance with the World Bank environmental guidelines.
29. IFC will monitor Mosenergo’s progress in implementing the EAP for Zagorsk, and the Strategic Environmental Program to the year 2010 and the company’s ongoing compliance with World Bank environmental, health and safety policies and guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by Mosenergo and by conducting periodic supervision.
30. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures for Zagorsk and corporate wide environmental performance and management system of Mosenergo, IFC concludes that, with the implementation of the EAP for Zagorsk, the completion of Zagorsk will meet World Bank environmental, health and safety policies and guidelines and Russian requirements, and with the implementation of the Program to the year 2010, the overall corporate performance of Mosenergo will move towards compliance with the World Bank environmental, health and safety policies and guidelines and Russian requirements.
Environmental and Social Mitigation Measures
Broad Community Support
Related SII
