Currently, the search and rescue operation is underway, with rescuers trying to find people in the machine room, almost one third of which has been flooded. According to an emergencies ministry representative, there’s still hope to find more people alive.

President Dmitry Medvedev has ordered that all measures be taken to mitigate the aftermath of the accident. The Emergencies Minister and the Minister of Energy are coordinating the operation on the site.

Russia’s Prime Minister, Vladimir Putin, has ordered a special commission to investigate the circumstances surrounding the accident.

"First of all, the degree and nature of the destruction needs to be estimated. We need to organise the work to clear the debris; and a working group must be set up to create a full plan for the reconstruction," Putin told the media.

The Sayano-Shushenskaya hydroelectric station on the Yenisey River is the largest in Russia and the fourth-largest in the world.

According to the Emergencies Ministry, there is no threat to villages downstream from the power plant, just as that there is no threat to the dam.

However, there is an oil spill associated with the accident, and officials are warning locals not to use the water until that situation is stabilised.

Electricity supplies in the area have also been affected. Therefore, Abakan thermal power Plant and Novosibirsk hydro electric plant will increase their operations to maximum capacity to make up for the loss of generation caused by the accident.

According to investigators, the disaster occurred during repairs in a machine hall, when an oil-filled transformer exploded early Monday morning.

"The explosion ruined a wall and ceiling of the machine room housing turbines. The room started to fill with water," spokesman for the Prosecutor General's Office Investigation Committee, Vladimir Markin, told Itar-Tass.

AFP Photo

Meanwhile the plant's owner, RusHydro is refuting the claims of a transformer explosion. RIA-Novosti news agency is quoting a spokesman for the company as saying the destruction was a result of a hydraulic impact – the sudden stop of a column of moving water.

Russia’s Emergencies Minister, Sergey Shoigu, said, “According to preliminary data, a hydraulic impact happened at the second engine pump, which damaged the operation wheel and caused water access to the machine hall.”

“All ten engine pumps have been stopped. At the moment we are removing absorbents and harbor barriers due to the leak of oil from the second and third engine pumps, in order to prevent oil from getting into the water intake structure,” he said.

Local resident Sergey Peregerya was one of the witnesses of the accident.

”I was woken by my wife, who told me that the hydro power station collapsed and that a big wave was heading for us – and that in 30 minutes it will wash everything away,” he said.

“We dressed quickly and packed up. In the streets people were panicking, taking their family and children to higher ground. People were buying up food: bread, canned meat and there were queues at the cash machines. People were taking their children from kindergartens,” he said.

Now, he said, the situation has calmed. “Not long ago, local TV showed the real picture of what happened. Until midday, there was an information vacuum, as the media didn’t confirm or deny anything,” Peregerya said.

The Emergencies Ministry says it could take years to repair the damage.

RusHydro says that due to the plant downtime it will suffer a monthly loss of around 1.5 billion rubles (around $47 million) as a result of the accident.

RusHydro managing director, Boris Bogush,(also) believes that it will cost more than 10 billion rubles (more than $312 million) to repair the hydroelectric station.