Page 88 - Russia OUTLOOK 2023

Power:

The export of electricity from Russia to China has grown by 23% since
the beginning of the year to December, said Russian Energy Minister Nikolai
Shulginov. In November in physical terms, the volume of supply, according to
Kommersant's information, could reach a record figure of 4.2bn kWh. However,
the Chinese direction still does not allow the Russian Federation to replace the
EU market lost due to hostilities: this year, the total export of electricity may
decrease by a third compared to the previous one.

Chairman of the board of directors of Inter RAO Igor Sechin said at the end of
November that against the backdrop of heat and energy shortages, the
company, at the request of the PRC, in January-October increased supplies to
China by 33%, to about 4bn kWh.

Inter RAO buys energy from power plants in the Far East (mainly from
RusHydro), and then resells it to China, paying extra for transmission services.
The profitability of supplies to China was estimated at 30%, but the regulator
limits the company's profit at 5% per year, with the rest of the revenue being
distributed to market participants in the Far East. The technical capabilities of
power transmission lines allow Russia to transmit to China up to 6-7bn kWh,
according to Regina Lyanzberg from Kept. Delivery of 7bn kWh is possible
only with an increase in the installed power capacity in the Far East, she notes.

The largest and most profitable direction for Inter RAO has historically been
Finland, Latvia and Lithuania, where 60% of exports went. However, in May,
deliveries there stopped due to problems with the calculations. Russia
managed to sell to the EU, according to Kommersant's information, about
4-5bn kWh against the backdrop of high prices.

88 Russia OUTLOOK 2022 www.intellinews.com