Mr. Khristenko also noted that demand for investments in the electricity sector exceeds their current level by four times.
"The total need in investments till the end of 2015 is estimated at approximately $46-$60 billion," Mr. Khristenko noted.
As he said, proceeding from this, the annual amount of investments is estimated at approximately $4 billion. "Today about $0.6 billion is channeled into electricity generation," the Minister said. "This is, at the minimum, 25% of the sum total of investments."
The Minister also noted the low efficiency of power generation.
"Efficiency of gas generation makes up 50% of efficiency of such generation at the European power plants operating on Russian gas," Viktor Khristenko said by way of comparison.
He also stated the "further ageing" of the generating capacities in Russia.
Mr. Khristenko views formation of a competition market and transfer of thermal generation to private investors as a way to resolve the problem. He explained that this will create motivation for investments.
At the same time the Minister noted that "putting these mechanisms into operation takes time." For this reason, he has proposed using the mechanism of guaranteed investments for the transitional period in 2005-2007. "Pinpoint actuating 4 megawatt of capacities" is supposed during this period, Mr. Khristenko went on to say.
"It is necessary to start the mechanism of guaranteed investments when the participants in the market will cover all the risks," the Minister noted.
According to him, a market of capacities which will guarantee investments can be built in 2008-2009.
Mr. Khristenko holds the view that all the risks during the carrying out of a reform of the electricity sector have been calculated.
"The task of risk management is the key one in the work to reform the power industry," Mr. Khristenko said in answer to Prime Minister Mikhail Fradkov's question about the extent to which the social, technological and political risks in carrying out the reform have been calculated.
"Technological risks relating to the generating capacities, transmission systems and price scenarios have been set forth at the level of models and calculations," Mr. Khristenko said. "As for social risks or risks of the legal character, all the reform work is built on revealing and covering such risks through the system of regulation of bilateral agreements."
