UPDATE 2-RUSAL to accelerate new dam to ease power shortage

* RUSAL, RusHydro to accelerate Boguchany power project * Repairs to damaged dam could take 4-5 years - RUSAL CEO * No decision on output cuts, Boguchany and Taishet smelters * Effect of output cuts on world market limited -- analysts (Adds details, background, analyst comment) By Robin Paxton and Aleksandras Budrys MOSCOW, Aug 19 (Reuters) - UC RUSAL, the world's largest aluminium producer, will expedite work on a new hydroelectric plant to limit output losses during the four years of repairs it expects will be needed at its main Siberian power supplier. UC RUSAL says 500,000 tonnes of aluminium output, equivalent to 11 percent of last year's production, are under threat after a fatal accident at the Sayano-Shushenskaya dam. It is building another utility, Boguchany, with state firm RusHydro (HYDR.MM). "We, together with RusHydro, will spare no effort in accelerating commissioning of the Boguchany hydroelectric power station, which will permit us partially to restore the energy balance disrupted by the disaster," UC RUSAL's main owner and chief executive, Oleg Deripaska, said on Wednesday. At least 13 people died and scores are missing after an engine room flooded on Monday at Sayano-Shushenskaya, which was supplying more than 70 percent of its electricity to two UC RUSAL aluminium smelters within 50 km (30 miles). Though RUSAL has secured emergency power from other regions, these supplies are not guaranteed in the long term. Spot power prices have also risen on the shortage, making it more difficult for the indebted aluminium firm to meet its cost-cutting target. "They started making money on the back of the aluminium price rally, but these margins will be eliminated if the price of electricity goes up," VTB Capital metals analyst Alexander Pukhayev said. RusHydro, Russia's monopoly hydroelectric power generator, is building the Boguchany plant together with UC RUSAL. It was initially meant to supply power to two new aluminium smelters. UC RUSAL spokeswoman Vera Kurochkina said it was too early to say whether the company would alter its plans to build the smelters at Boguchany and Taishet, both in eastern Siberia. UC RUSAL postponed the smelter projects, which are partially complete, when commodity prices tumbled last year. But it said in April that it wanted to relaunch construction of both plants. It gave no proposed start date for the Boguchany utility. REORGANISING SUPPLY UC RUSAL said its Sayanogorsk and Khakassia smelters near the stricken dam had joint annual capacity of 832,000 tonnes. Two other smelters, Krasnoyarsk and Novokuznetsk, are also supplied by the hydro station, though in smaller amounts. Production at all plants is so far unaffected as the company has reorganised energy supply to those smelters worst affected. UC RUSAL produced 4.4 million tonnes of aluminium in 2008. Even before the disaster at the dam, it had committed to output cuts totalling 500,000 tonnes as a step toward cutting costs. The company said its energy costs dropped 20 percent in the first half of 2009, when it cut metal production by a tenth. But electricity prices on the Siberian spot market jumped 24 percent on Wednesday as demand overwhelmed alternative power suppliers. [ID:LJ444065] The government plans to smooth out such spikes, and generators later agreed to curb rises. With aluminium stocks in London Metal Exchange warehouses MAL-STOCKS also at record highs in excess of 4.6 million tonnes, analysts said even a 500,000-tonne reduction in output would have limited short-term effect on the price of the metal. "Maybe it will reinforce a floor at $1,800-1,900 (a tonne) rather than rallying prices," Calyon metals analyst Robin Bhar said. "It is supportive, but the market is oversupplied." Three-month LME aluminium MAL3 was trading at about $1,925 a tonne at 1245 GMT. (Additional reporting by Simon Shuster in Moscow, Veronica Brown and Michael Taylor in London; editing by James Jukwey)