Governments of two countries, major supervision authorities in the energy sector, namely, the Ministry of Energy of Russia, the National Development and Reform Commission in the People’s Republic of China, the State Grid Corporation of China, regional authorities of the Far Eastern Federal District of Russia and the northeastern provinces of China have been involved in implementation of the project for increase of electric power export from the Russian Federation to the People’s Republic of China.
Partners of JSC «Eastern Energy Company» (100% subsidiary of JSC «INTER RAO UES»), the project operator on the part of Russia, are the biggest energy companies in Russia, namely, JSC «RusHydro», JSC «RAO Energy System of East», JSC «Federal Grid Company of the Unified Energy System», as well as JSC «Russian Coal» and JSC «Siberian Coal Energy Company».
During the project implementation JSC «Eastern Energy Company» interacts with JSC «System Operator of the Unified Energy System», providing centralized operational and technological dispatching control of the United Energy System of Russia, and cooperates with the Nonprofit Partnership «Council for Organizing Efficient System of Trading at Wholesale and Retail Electricity and Capacity Market» (NP «Market Council»), combining participants of the wholesale electricity (capacity) market.
Investment projects for construction of power grid and generation capacities to enhance the power potential of Russia’s Far East and Trans-Baikal Regions and to increase the electric power export to China will be implemented based on project financing with the state and private capital allowed.
Key elements of the project financing strategy:
- Use of the optimal ratio of owned to borrowed funds, which conforms to the existing international practice, ensuring the project stability (20 to 80 per cent);
- Diversification of funding sources;
- Use of various forms of the state participation on the part of Russia and China;
- Involvement of strategic partners and investors (including suppliers of fuel and equipment).
about companies – project participants
Eastern Energy Company (Russian project operator)
JSC «Eastern Energy Company» was established in 2007 in the course of reforming RAO «UES of Russia» and is currently 100% subsidiary of JSC «INTER RAO UES» (Russia’s largest electric power exporter). The priority direction of the company’s activity is implementation of the project for increase of the electric power export from Russia to China. This project is the key constituent of the large-scale plan for development of the energy industry in the Far East. This development plan provides for construction of new power generation capacities and power grid facilities.
INTER RAO UES
INTER RAO UES OJSC is a fast growing power supplier with a number of generation and distribution assets in Russia and abroad. The total installed capacity of electric power stations of INTER RAO UES Group is about 18,000 MW. The company is a major investor and a leading exporter and importer of electric power in Russia.
The mission of INTER RAO UES OJSC is to organize cross-border deliveries of electric power, provide it to consumers in this country and abroad, make effective investments, and expand the range of services provided. The company consistently implements Russia's energy strategy as regards the RF power industry reform by improving the performance of its trading operations and expanding its target markets and the scope of its activities. At present, INTER RAO UES OJSC is developing its business along several lines. These include: export and import of electric power, trading in electrical power in the domestic and foreign markets, investment, management of foreign assets, retailing of electrical power.
INTER RAO UES OJSC is a fast growing transnational company. INTER RAO UES OJSC currently heads a group of more than 20 companies based in fourteen countries. By acquiring foreign assets, the company significantly consolidates its position in commercially attractive electric power markets in Europe, the South Caucasus, the Far East and Central Asia, fuelling the growth of the RF economy.
Federal Grid Company of Unified Energy System
The open joint-stock company Federal Grid Company of Unified Energy System (JSC FGC UES) is incorporated in accordance with the restructuring program designed for the Russian Federation power industry as organization performing the Unified national (All-Russia) electric grid (UNEG) management with intent of its maintenance and development. State registration of JSC FGC UES took place on June 25, 2002. General guidelines for the company: management for the Unified national (All-Russia) electric grid, providing services for electric energy transmission and connection to the electric grid to participants in the wholesale energy market, investment activities in the Unified national (All-Russia) electric grid development, maintenance of electric grids, technical supervision for grid facilities.
JSC FGC UES owns 120 thousand km of transmission lines and 796 substations of total transformation capacity of more than 310 thousand MVA with voltage in the range of 110–1150 kV, as well as 19 separate open switchgears and cells with total capacity of more that 139 thousand MVA. JSC FGC UES grid facilities are placed in 73 regions of the Russian Federation, which have total land of 13,6 million sq. km and population of about 140 million people.
RAO Energy System of East
JSC «RAO Energy System of East» (ESE) was established on July 1, 2008 as a consequence of RAO «UES of Russia» reorganization. 52% of the company’s shares are government-owned. Its subsidiaries operate in six of Russia’s seven federal districts.
ESE holds interests in generating, distributing and holding companies in the Russian Far East, including Far Eastern Energy Management Company (FEMC), Far Eastern Energy Company (FEEC), Far Eastern Generating Company (FEGC), Yakutskenergo, Magadanenergo, Kamchatskenergo, and Sakhalinenergo.
It also owns shares in some major power distributors outside the Far Eastern Federal District (Altaienergosbyt, Mosenergosbyt, St Petersburg Energy Sales Company, Saratovenergo, Tambovskaya Energy Sales Company), as well as in the Company of Energy and Electrification Mobile Energy and some other non-core assets transferred from the reorganised UES.
With 8,785 MW of total installed capacity, ESE is the leading energy generator in the Russian Far East and sixth biggest in Russia.
In 2009, its subsidiaries produced 26.92 billion kWh of electricity and 30.97 million Gcal of heat power.
RusHydro
RusHydro is Russia’s biggest hydro-generating company and the second biggest in the world in terms of installed capacity. RusHydro is the leader in the production of power on the basis of renewable energy sources, developing power generation using water flows, tidal, wind and geothermal energy.
The company’s installed capacity amounted to 25,423.5 MW. As a result of implementation of the technical retooling and reconstruction programme, the installed capacity of the Bureyskaya HPP increased by 150 MW, of the Kamskaya HPP by 3 MW and that of the Volzhskaya HPP by MW. The current installed capacity of the Bureyskaya HPP is 1,975 MW, of the Kamskaya HPP – 519 MW, and of the Volzhskaya HPP – 2,551 MW.
RusHydro’s share of the wholesale electric power market in terms of installed capacity amounts to about 12%. JSC RusHydro incorporates 55 renewable power source facilities. These include the Neporozhniy Sayano-Shushenskaya HPP, the biggest both in Russia and in Europe (6,400 MW), the 9 power stations of the Volzhsko-Kamskiy Cascade of HPPs, with aggregate an installed capacity exceeding 10,103 MW, the Zeyskaya HPP, which is the pioneer of large-scale hydro-electricity production in the Far East (1,330 MW), the Bureyskaya HPP (1,975 MW) and several dozen hydro-electric power plants in the North Caucasus, as well as geothermal power stations on Kamchatka.
Russian Coal
JSC «Russian Coal» is one of the largest coal companies in Russia. It was founded in 2002. Its major production assets are located in four regions of Russia, namely, in Rostov, Kemerovo, Amur Regions and the Republic of Khakassia. JSC «Russian Coal» combines six open-pit mines, eight mines, and three coal-washing plants as well as power-supply, transportation and repairs enterprises. Total industrial coal reserves amount to 476,137 thousand tons.
Siberian Coal Energy Company
JSC «Siberian Coal Energy Company» is the Russia’s first-rate coal producer and the only domestic company among the top ten world’s coal leaders. The company provides about 30% of power-generating coal supplies on the domestic market and approx. 20% of Russian coal exports. Affiliates and subsidiaries of the company are located in Krasnoyarsk, Primorye, and Khabarovsk Territories, Irkutsk, Chita and Kemerovo Regions, in Buryatia, Khakassia and Sakhalin. JSC «Siberian Coal Energy Company» is also the largest private shareholder of eleven Siberian and Far-Eastern energy companies with the installed capacity of 13 GW.
