Deputy General Director

of the Russian Energy Agency

Kozhukhovskiy Igor Stepanovich

Baku, 18 October 2016

Russian Energy Agency

Overview of the Russian

Electric Power Sector

157,7

150,3

2014 2015

Maximum Load (GW)

240,3

243.2

2014 2015

Installed Capacity (GW) -7,4 (4,7%)

China

1040,4

1036.4

2014 2015

Electricity Consumption (TWh)

-4,0 (0,4%)

Key Indicators of the Russian

Electric Power Sector

2

+2,9 (1,2%)

Electricity

Production

in 2015

1049,9 TWh

5th in

the global

ranking

1 2 3 4 5

USA

India

Japan

Russia

Revenue – 3 trillion roubles (47,6 bln US$ )

и годовой максимум

201,4 204,6220,3

260,1

156,1

133,8151,1

191,2

1035

850

1010

1215

0

400

800

1200

1600

100

150

200

250

300

350

400

1985 1990 1995 2000 2005 2010 2015 2020 2025

TWhGW

Installed Capacity Maximum Load Electricity Consumption

2015

1036

150.3

243.2

Installed capacity exceeded the level achieved in 1990 by 41,8 GW

Total annual hours of thermal plant’s operation

• 1990 г 5673 hours • 2015 год 4136 hours,

installed capacity utilization factor - 47,2%

+41,8 GW

2015 : Electricity consumption and maximum load are comparable to the levels reached in 1990

actual forecast

3

Installed capacity exceeded the level of maximum load in 1,29 times in 1990, and in 1,62 times – in 2015 (or by 93 GW)

Reasons for growing excess of generation capacity: • Drastic reduction of electricity consumption while maintaining the existed level of old generation

capacities during the period of economic decline in the 1990s • Changes in the structure of electricity consumption in the period of recovery economic growth • Low growth rate of electricity consumption, substantial increase in new generating capacities

commissioned under the concluded regulated capacity contracts, and lower decommissioning of old inefficient power plants during the post-reform period of 2005-2015

Trends in Electricity Demand and

Supply, Excess of Generation Capacity

4

Legal & Regulatory Basis

Federal Law №35-ФЗ «About Electric Power Sector»

Electricity & Capacity Markets Rules & Procedures

Tariffs Formation Rules (based on fair return of investments) in the Electric Power Sector

Laws & Regulations on: Energy Security Entrepreneurship Labor Competition Non-Discriminatory Network & Services Access Environmental Protection

Sector Specific Legal & Regulatory Basis

General Legal & Regulatory Basis

5

Structure of the Russian Electric

Power Sector

JSC «Federal Grid

Company»

JSC «МОЭCК»

JSC «Ленэнерго»

JSC «Янтарьэнерго»

JSC «Тюменьэнерго»

JSC «ТРК»

JSC «МРСК Волги»

JSC «МРСК Центра и Приволжья»

JSC «МРСК Юга»

JSC «МРСК Центра»

JSC «МРСК Урала»

JSC «МРСК Сибири»

JSC «МРСК Северо-Запада»

JSC «МРСК Северного Кавказа»

Power Delivery Infrastructures, System & Market Operators

JSC «Russian Electric Grids» JSC «System

Operator»

Partnership «Market

Council»

- Seller’s Chamber - Buyer’s Chamber - Expert’s Chamber - Infrastructural Organization’s Chamber:

- JSC “Financial Settlement Center” - JSC «Trade Administrator» - JSC «System Operator» - JSC «Federal Grid Company»

7 Uniform Dispatch Centers

50 Regional Dispatch Centers

Generation Companies LLC «Газпром энергохолдинг»

(JSC «Мосэнерго», JSC «МОЭК»,

JSC «ТГК-1» , JSC «ОГК-2») 38

GW

JSC«ИНТЕР

РАО» 22,9 GW

(18 TPP)

JSC«Фортум»

3,8 GW

(8 TPP)

JSC «Т Плюс»

16,2 GW

(62 TPP)

JSC«Юнипро»

4,7 GW

(5 TPP)

JSC «Энел ОГК-5»

9,7 GW

(4 TPP)

JSC «РусГидро»

(51 HPP, 3 PSPP,

3 GTPP) 38,5 GW

JSC «Квадра»

3,6 GW

(22 TPP)

JSC «ЭС

Востока»

9 GW

(40 TPP)

JSC«Сиб. ГК»

7,1 GW

(17 TPP)

JSC «ТГК-11»

1,5 GW

(6 TPP)

JSC«Кузбасэнерго»

2,5 GW (2 TPP)

Guaranteeing Suppliers, Non-regulated Supply Companies

& others

> 300 companies are participating in the wholesale&retail electricity markets (guaranteeing suppliers, non-

regulated supply companies)

JSC

«Росэнергоатом»

25,2 GW

(16 NPP)

Market Structure

European &

Ural Zone Siberian Zone

Arkh

ang

elsk

Kalinin-

grad

Komi Far

East

Non-Market

Zones

Market zone 2 Market zone 1

Balancing

Market

Capacity

Auction Bilateral

Capacity

Contracts Regulated

Capacity

Obligations

Day-ahead

Market

Capacity

Market

Wholesale

Market

6

Structure of the Electricity

Consumption in 2015

7

53%

2%1%

3%

8%

9%

14%

10%

добыча полезных ископаемых, обрабатывающие производства, производство и распределение электроэнергии, газа и воды

сельское хозяйство, охота и лесное хозяйство

строительство

оптовая и розничная торговля

транспорт и связь

другие виды экономической деятельности

городское и сельское население

потери в электросетях

Данные Росстата

By economic activities

78%

18%

4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Европейская часть + урал

Сибирь Дальний Восток

By regions of Russia

Since 2005 electricity consumption has increased by 12,1% and reached 1036,4 TWh in the

Russian Federation (source of data: Ministry of Energy of RF)

mining, manufacturing, production

and distribution of electricity,

gas and water

urban and rural population

other economic activities

Trasnsport and communication

wholesale and retail trade

construction

Agriculture

losses in electricity

European

part + Ural Siberia Far East

8

Structure of Electricity Production in 2015

Since 2005 electricity production has increased by 12,2% and reached 1049,9 TWh (source of data: Ministry

of Energy of RF)

65.13%

18.59%

16.19%

0.09%

ТЭС

АЭС

ГЭС

ВИЭ

Данные Минэнерго

Russian Federation

67.50%

24.63%

7.81% 0.06%

55.85%

0.00%

44.15%

0.00%

European zone + Ural Siberia

66.89%

0.45%

31.71%

0.95%

Far East

mining, manufacturing,

production

Thermal power plant

gas and water

Nucleare power

Hydro power

Renewable energy

9

Capacity Additions & Investments in

2011-2015

2011 2012 2013 2014 2015 2011-2015

Total Capacity Additions 4,7 6,3 4,0 7,6 4,9 27,5

incl. added due to regulated capacity obligations (thermal PP) 3,9 3,6 1,9 4,9 2,9 17,2

New Capacity Additions in 2011-2015 GW

2011 2012 2013 2014 2015 2011-2015

Largest Generation&Electric Network

Companies 893,4 851,3 867,0 807,7 646,5 4065,9

Largest Generation Companies 523,7 522,8 522,2 492,5 375,8 2437,0

incl. invested due to regulated

capacity obligations (thermal PP) 151,1 172,2 185,9 165,8 96,1 771,1

Investments in the Russian Electric Power Sector in 20112015 bln.₽

10

In 2013-2015, electricity price growth was rather even for all customer groups - 6-7% per year. The rate of growth was lower

the inflation rate (11% in 2014 , 13% in 2015 ).

Electricity prices in US cents are decreasing in the last years due to depreciation of the Russian currency against the U.S.

dollar.

High prices for non-industrial electricity customers and roughly equal prices for industrial and residential customers suggest that

residential electricity tariffs are still cross-subsidized. By assessments of Ministry of Energy of RF, the level of cross-

subsidization in the electric power sector was around 238 billion rubles. This problem is most acute in the regions of the

Russian Far East

2.47 2.64

2.80

2.04 2.17

2.32 2.29

2.47

2.60

3.05

3.26

3.48

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2013 2014 2015

₽/kWh

Все потребители Промышленность

Население (с НДС) Непром. потребители

7.8

6.9

4.6

6.4

5.7

3.8

7.2

6.5

4.3

9.6

8.5

5.7

1

2

3

4

5

6

7

8

9

10

11

2013 2014 2015

US cents/kWh

Все потребители Промышленность

Население (с НДС) Непром. потребители non-industrial consumers

industry

Tariff dynamics

all consumers industry

non-industrial

consumers

population all consumers

population

11

Capacity additions and dismantling

capacity in 2016-2022

11

2016 2017 2018 2019 2020 2021 2022 2016-2022

Total Capacity Additions 5671,5 5994,0 4439,6 1713,6 565,0 2453,8 20837,5

Nuclear power 1195,4 2268,8 1195,4 1198,8 2453,8 8312,2

Hydro power 351,8 11,6 350,2 49,8 763,4

Pumped-storage hydroelectricity

140 420 420

980

Thermal power plant 3589,3 2948,6 2174 195 565 9471,9

Renewable energy 395 345 300 270 1310

Capacity additions in 2016-2022 (mW)

2016 2017 2018 2019 2020 2021 2022 2016-2022

Total dismantling Capacity 1674,1 1383,0 1617,0 300 1000 1000 6974,1

Nuclear power 417

1000 1000 1000 3417

Thermal power plant 1257,1 1383 617 300

3557,1

Dismantling capacity in 2016-2022 гг. (mW)

Information presented on these schemes and development programs of the

Unified Energy System of Russia in the 2016 - 2022 years

New Trends and Proposed

Projects

• Grid development for power interchanges Russia-

Azerbaijan-Iran

• Development large wind park in Sakhalin Island for

supply electricity to Japan

• Development large wind park in the South of Siberia-the

North of Kazakhstan to supply electricity for the region of

«Silk Roads Project» implementation

• Pilot innovation projects – National technological initiative

«Energy Net»

• Implementation of the energy management systems and

informational systems in regions of Russia

12

Thank you for your attention!

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