In 2006, 26 power units with an aggregate capacity of 1,651.5 MW were put into operation throughout the Holding Company. Of these, 596 MW were financed by OAO RAO "UES of Russia". During the year, 14 generating units with a combined capacity of 1,262.7 MW were brought on line at the thermal power plants. The hydropower plants put on stream 94.8 MW of new capacity. Some 148 MW of hydropower units were replaced, and the available capacity of the Irganayskaya HPP was increased by 146 MW after raising the dam level.

The key start-ups at the thermal power plants included the commissioning of power unit 2 (450 MW) at the Severo-Zapadnaya CHPP, power unit 4 (180 MW) at the Khabarovskaya CHPP-3, power unit 2 (180 MW) at the Chelyabinskaya CHPP-3, a 180 MW power unit at the Pravoberezhnaya CHPP of TGC-1, etc.

In the hydropower sector, the projects commissioned included the Malaya Mezenskaya TiPP, the Malye HPPs in Dagestan, and the Gelbakhskaya HPP. Modernization projects were implemented to replace the hydropower units at the Volzhskaya HPP and Kamskaya HPP.

In 2003-2006, the Investment Programme of OAO RAO "UES of Russia" was divided to create own investment programmes for OAO "UES FGC" and OAO "UES SO-CDA" (in 2003) and OAO "HydroWGC" (in 2006).

In 2006, OAO "UES FGC" put into operation 640 km of new transmission lines, 4,124 MVA of transformer capacity, and 1,200 Mvar of reactive power. The amount of funds spent on the Investment Programme of OAO "UES FGC" in 2006 totalled RUB36.2 billion, a 1.3-fold increase over 2005.

The following new grid facilities became operational in 2006: 500 kV transmission line "Oznachennoe – Aluminievaya" with the 500 kV Aluminievaya Substation; 220 kV transmission line "Blagoveshchenskaya – Sirius"; 500 kV Zvezda Substation; 330 kV Frunzenskaya Substation; 330 kV Novgorodskaya-2 Substation; 220 kV transmission line "Volgodonskaya NPP – Salsk" and capacity extension project at the 220 kV Salsk Substation; 500 kV transmission line "Gusinoozerskaya TPP – Petrovsk-Zabaikalsky", and 500 kV Khekhtsir Substation.

The investments in the distribution networks grew 1.8-fold in 2006 to RUB41.7 billion from RUB23.3 billion. At some distribution companies, the investments increased three- to four-fold. The major regional distribution companies' investment figures for 2006 were as follows: OAO "Moscow United Electricity Distribution Company": RUB10.2 billion, OAO "Moscow City Electricity Distribution Company": RUB3,95 billion, OAO "Lenenergo": RUB2.9 billion, OAO "Tyumenenergo": RUB3.2 billion, OAO "Kubanenergo": RUB1.4 billion.

The new distribution facilities that came on line during the year included 2,055 km of low-voltage lines and 1,527 MVA of transformer capacity, and the projects to upgrade and modernize distribution infrastructure involved 6,242 km of low-voltage lines and 3,918 MVA of transformer capacity.

Special emphasis was placed in 2006 on the construction and overhaul of the power grid facilities in the so-called "peak load areas"—Moscow Region, Leningrad Region, Tyumen Region, and Kuban.

In the Moscow Energy System, 580 MVA of transformer capacity was added to the 750 kV Bely Rast Substation. As a result, 350 MW of additional capacity was brought on stream in the North-Western power node of the Moscow Energy System, an area which suffers from electricity shortages. Overhaul projects were completed at three 220 kV substations (Gribovo, Radishchevo, Shmelyovo). This helped increase the transmission capability of the 220 kV lines and electricity deliveries into the Moscow Energy System.

In the Leningrad Energy System, 53.7 km of the second circuit of the 330 kV line were built between the Leningradskaya and Vostochnaya Substations, which ensured uninterrupted transit of electricity to customers in the northern and north-eastern parts of Saint Petersburg and the surrounding Leningrad Region. The capacity of the 330 kV Vostochnaya Substation was increased by 500 MVA, significantly improving the reliability of power supply to consumers in the eastern and north-eastern parts of Saint Petersburg and the Leningrad Region.

In the Tyumen Energy System, a capacity expansion project was implemented at the 500 kV Kholmogorskaya Substation, increasing its capacity by 501 MVA and enhancing power supply to the major oil and gas operations in the Yamalo-Nenets Autonomous Okrug and the northern part of the Tyumen Region. The capacity of the 220 kV Muravlenkovskaya Substation rose by 125 MVA, a project which improved the reliability of power to the oil and gas fields.

The amount of own funds spent by RAO "UES of Russia" on its investment programme in 2006 grew 6.3 percent compared to 2005 to RUB20.3 billion, of which RUB8.5 billion was used to pay off its loan obligations.

In 2007, the financing to be provided for the investment programmes of OAO RAO "UES of Russia", OAO "UES FGC", OAO "UES SO-CDA", and OAO "HydroWGC" will reach RUB175.4 billion.

OAO RAO "UES of Russia" will spend RUB12 billion of own money on its 2007 Investment Programme.

Financing of the Investment Programme Projects of OAO RAO "UES of Russia", OAO "UES FGC", OAO "UES SO-CDA", and OAO "HydroWGC", billions of RUB

The Company's investment programme for 2006 focused on the priority projects in the Unified Energy System of Russia, including the facilities which were transferred to the control of OAO "HydroWGC" in H2 2006.

Bureyskaya HPP (design capacity: 2,000 MW)

The construction of this power plant will help ensure reliable and uninterrupted power to customers in the Russian Far East and reduce the region's dependence on the expensive fuel that has to be transported to the area. The two last hydropower units with the aggregate capacity of 667 MW are scheduled to go on line in 2007, with the power plant reaching its design capacity.

Boguchanskaya HPP (design capacity: 3,000 MW) The construction of this hydro power plant will help meet the demand for electricity from the energy and industrial consumers based in the Lower Angara region and help eliminate the winter peak energy shortfall in the area. The power plant is scheduled for commissioning in 2012. The first three hydropower units are expected to be brought on line in 2009.

Zelenchukskaya HPP (design capacity: 160 MW).

The project to complete the water intake facility at the Bolshoy Zelenchuk river has helped double the hydropower plant's output without increasing its installed capacity. The facility was completed in December 2006.

Irganayskaya HPP (design capacity: 800 MW). Two 200 MW generating units have been put into operation at the power plant. With the reservoir level standing at 483 meters (the top of the reservoir capacity allocated to joint use), the aggregate capacity of the units is 214 MW. After the dam is filled and the reservoir level is elevated to 521 meters, the hydraulic units will reach their design capacity, which will increase reliability of the power supply to consumers in the North Caucasus. The target level of 521 meters is expected to be achieved in July 2007.

Zaramagskie HPPs (design capacity: 352 MW). When commissioned, the power plant will supply more than half of the electricity requirements in North Ossetia. The power plant will be fully built in 2010.

Chain of Nizhnechereksky HPPs (chain's design capacity: 120 MW). The Aushigerskaya HPP (60 MW) was brought on line in 2002. A project is now underway to build the Sovetskaya HPP. When the power plant goes on line in 2008, it will help enhance power supply in the North Caucasus energy system.

Ivanovskaya TPP (design capacity: 701.7 MW) The project is intended to roll out serial production of GTE-110 gas turbine unit, the key element of PGU-325 combined-cycle gas turbines, which are intended to replace the 200-300 MW steam power units widely used in the UES of Russia. Such modernization will increase efficiency of generation units from 35-38 percent to 51 percent and help reduce consumption of natural gas by 30% at each upgraded unit. The first unit is scheduled to become operational in 2007, and the second in 2009.

Mobile GTPPs (design capacity: 225 MW). In order to ensure reliable operation of the Moscow Energy System during the winter peak load period of 2006-2007, RAO "UES of Russia" decided to install ten mobile gas turbine power plants (GTPPs), 22.5 MW each, near the substations of the Moscow Energy System which have the greatest load. Based on the balance loads recorded during the 2005-2006 autumn and winter period, OAO "UES SO-CDA" recommended the following sites for the installation of the Mobile GTPPs: Rublevo 110 kV Substation (3 gas turbine units), Syrovo 110 kV Substation (2 gas turbine units), Pushkino 110 kV Substation (3 gas turbine units), and Daryino 110 kV Substation (2 gas turbine units).

The gas turbine units are to be installed on the sites of the existing substations, and deliver power to buses of those substations.

In 2007, it is planned that all ten units will be installed and brought on line. As of 1 March 2007, two units were put into operation at the Daryino 110 kV Substation.

"Our R&D teams have demonstrated their ability to help implement the investment programme of RAO "UES of Russia" by successfully competing and winning 70% of the tenders to procure design works held last year. I am also very pleased that, in 2006, the staff of RAO "UES of Russia" and NPO "Saturn" completed their fifteen-year work to launch series production of a 110 MW gas turbine unit meeting the world's best standards" Vyacheslav Voronin Member of the Management Board, Managing Director of RAO "UES of Russia", Services Business Unit