International Activities

Electricity Exports

In 2006, ZAO "INTER RAO UES" exported 20.5 billion kWh of electricity, down 1.6 billion kWh compared to 2005. The decrease in exports was in line with the resolutions taken by the Coordination Group of RAO "UES of Russia" for the 2006-2007 autumn and winter preparations, which gave priority to electricity supplies to Russia's internal market due to the increased power consumption in the country. In this connection, Russia reduced its electricity exports to Belarus, Azerbaijan, Georgia, and Moldova.

The bulk of electricity exports in 2006 went to Finland (over 50 percent of Russia's electricity exports), Belarus (about 11 percent), Kazakhstan and Lithuania (9 percent and 7 percent, respectively).

Electricity supplies to Norway and the northern areas of Finland from the dedicated hydrogenerators of the Borisoglebskaya HPP, Rayakoski HPP, and Kaitakoski HPP were carried out under the cross-border trade arrangements.

Electricity Exports, by Country (%)

Electricity Exports to the FSU Countries

Azerbaijan

The electricity exports to Azerbaijan in 2006 amounted 755 million kWh, down 247.29 million kWh compared to 2005.

Georgia

In 2006, the electricity exports to Georgia totalled 570 million kWh, a decrease of 220 million kWh from 2005.

Belarus

In 2006, the electricity supplies to this country totalled 2,345.16 million kWh, a twofold decrease compared to 2005.

Moldova

The electricity exports to the Republic of Moldova in 2006 amounted to 402.82 million kWh, down 50 percent from the 2005 level. Such a reduction in export volumes was due to the fact that Russia and Ukraine failed to reach an agreement on the transit of Russian electricity via Ukraine, which is why the agreement was terminated effective June 2006.

Kazakhstan

In 2006, the exports of electricity to the northern areas of Kazakhstan amounted to 1,868.81 million kWh, which is nearly the same level as the year before.

Latvia

In 2006, due to the lower water inflow on the Daugava River and reduction in the output of Latvia's HPPs, the demand for Russian electricity in Latvia increased by 561.18 million kWh compared to 2005 reaching 1,086.34 million kWh.

Lithuania

In 2006, the electricity exports from Russia to Lithuania made 1,413.61 million kWh, up 801 million kWh on the year before. The increase in the exports was due to the decommissioning of one of the two power units at the Ignalina NPP and the emergency stoppage of turbine generator No. 3 at the nuclear power plant in November and December 2006.

Electricity Exports to the Non-FSU Countries

Finland

In 2006, the electricity exports from Russia to Finland made 11,150.38 million kWh, up 290.38 million kWh on the year before. Such an increase was due to the performance of contractual obligations and the favourable situation on the Nord Pool market.

Mongolia

Mongolia's electricity market is generally well-balanced, and the electricity imported from Russia is chiefly used to meet the peak demand and supply electricity to customers in the isolated

border areas. In 2006, the electricity exports from Russia to Mongolia made 174.22 million kWh, which is nearly the same as the year before.

China

In 2006, Russia increased its electricity deliveries to China to 522.91 million kWh, up 30.98 million kWh compared to 2005. This was made possible by the commissioning of the cross-border 220 kV transmission line Blagoveshchenskaya - Sirius.

Electricity Exports, billions kW

Electricity Imports

In 2006, ZAO "INTER RAO UES" imported 5.12 billion kWh of electricity, a nearly 50 percent drop compared to 2005.

Such a decrease compared 2005 was due to the reduction in the electricity imports from Kazakhstan, Lithuania, Ukraine, and Azerbaijan. Kazakhstan accounts for over 70 percent of all electricity imports in Russia, Lithuania, and Ukraine each account for approximately 10 percent, and Azerbaijan has a 6 percent share.

The reduction in imports was due to the changes in the electricity prices which were unacceptable for Russia based on the energy tariffs and balances approved for 2006.

Electricity Imports by Country, %

Lithuania

Electricity imports from Lithuania are intended for consumers in the Kaliningrad Region and ensure uninterrupted power supply in this area suffering from energy shortfalls. This also helps reduce the transit of Russian electricity via the energy systems of the Baltic Republics and Belarus. Russia imported 507.41 million kWh of electricity from Lithuania in 2006, a fall of 2,446.59 million kWh compared to 2005.

Ukraine

Electricity imports from Ukraine's energy system amounted to 498.11 million kWh, down 2,330.89 million kWh from the year before. Such a decrease was due to the lack of a contract the until November 2006.

Kazakhstan

Imports of electricity from Kazakhstan ensure uninterrupted power supply to consumers in the areas of the Russian Federation bordering on Kazakhstan, and to supply cheaper electricity to the Russian market. Russia imported 3,676.86 million kWh of electricity from Kazakhstan in 2006, down 182 million kWh compared to 2005.