International activities

ELECTRICITY EXPORTS AND IMPORTS

In 2007, ZAO "INTER RAO UES" exported 18.14 billion kWh of electricity, down 2.38 billion kWh compared to 2006.

The bulk of electricity exports in 2007 went to Finland (over 54 percent of Russia's electricity exports), Belarus (about 15 percent), Kazakhstan, Latvia and Lithuania (12 percent, 8 percent and about 6 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 TO THE CIS COUNTRIES

Azerbaijan

Electricity exports to Azerbaijan in 2007 amounted 250 million kWh, a decrease of 510 million kWh compared to 2006. Azerbaijan's demand for Russian electricity declined as new generation capacity was brought on line in the country, hourly accounting for electricity was introduced, and a reduced energy use during the summer.

Georgia

In 2007, the electricity exports to Georgia totalled 280 million kWh, a decrease of 290 million kWh from 2006. Such a reduction in export deliveries was primarily due to the high water inflow rate in the Inguri HPP reservoir and increase of its electric power production, some outstanding issues in intergovernmental relations, and replacement of Russian electricity with electricity imported from Azerbaijan and Turkey.

Belarus

In 2007, the electricity supplies to this country totalled 2,653.4 million kWh, an increase of 308.2 million kWh compared to 2006.

Moldova

There were no electricity exports to Moldova in 2007 due to the high cost of Russian electricity transit through the territory of Ukraine.

Ukraine

Owing to the parallel operation of the energy systems of Russia and Ukraine, Russian electricity exports into Ukraine amounted to 34.7 million kWh.

Kazakhstan

In 2007, exports of electricity to Kazakhstan amounted to 2,167.72 million kWh, which represents an increase of 298.91 million kWh compared to the previous year due to increased energy use in Kazakhstan.

Latvia

In 2007, 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, with Russia's electricity exports growing 330.3 million kWh compared to 2006 reaching 1,416.69 million kWh.

Lithuania

In 2007, electricity exports from Russia to Lithuania made 1,062.86 million kWh, down 289.14 million kWh compared to the year before. Such a reduction in exports was due to restrictions imposed on exports designed to ensure compliance with the regime tolerances of the Electric Ring linking Belarus, Russia, Estonia, Lithuania, and Latvia in Q3 2007.

ELECTRICITY EXPORTS TO THE NON-CIS COUNTRIES

Finland

In 2007, electricity exports from Russia to Finland made 9,870.94 million kWh, down 1,279.44 million kWh compared to the year before. Such a decline was chiefly due to the reduction of spot prices on the Nord Pool power exchange.

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 2007, the electricity exports from Russia to Mongolia made 184.49 million kWh, an increase of 10.27 million kWh compared to 2006.

China

Due to the rise in electricity rates set by the Federal Tariffs Service of Russia for exports in the Far Eastern energy area, there were no commercial deliveries of electricity to China in 2007.

ELECTRICITY EXPORTS BY COUNTRY, %

ELECTRICITY IMPORTS

In 2007, ZAO "INTER RAO UES" imported 5.62 billion kWh of electricity, an increase of 0.51 billion kWh from the year before.

2007 saw a slight decline in the electricity imports from Kazakhstan and Lithuania compared to 2006, while imports from Ukraine and Moldova were up. Kazakhstan accounts for over 59 percent of all electricity imports into Russia, while Lithuania and Ukraine each account for 17 percent and 8 percent, respectively. Azerbaijan, Georgia, and Moldova account for 6 percent, 5 percent and 4 percent of imports, respectively.

In Q3 2007, on orders of System Operator electricity supplies were launched as part of mutual emergency assistance scheme. During the repairs in the Sochi energy node, 310 million kWh of electricity was imported from Georgia.

ELECTRICITY IMPORTS BY COUNTRY, %

Major Importers of Electricity

Kazakhstan

Russia imported 3,263.29 million kWh of electricity from Kazakhstan in 2007, down 413.57 million kWh compared to 2006. The decline was due to an increased electricity consumption in the Northern Kazakhstan.

Lithuania

The electricity imports are used to supply power to customers in the Kaliningrad Region. Russia imported 446.12 million kWh of electricity from Lithuania in 2007, a fall of 61.29 million kWh compared to 2006.

Ukraine

Electricity imports from Ukraine's energy system amounted to 965.91 million kWh in 2007, up 467.8 million kWh from the year before. Such an increase in electricity imports was in line with the resolutions adopted of the Coordination Group of RAO "UES of Russia" relating to the preparations for the 2006/2007 autumn and winter period.