1 1 CIS EPC and EURELECTRIC

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CIS ENERGY POWER COUNCIL

1CIS EPC and EURELECTRIC

November 13, 2003 in Brussels, Presidents of the CIS EPC and EURELECTRICsigned a cooperation Agreement.

October 13, 2003 in Brussels, the International Conference “Electricity marketfrom Lisbon to Vladivostok".

November 24, 2005, Moscow hosted the 2nd joint workshop EURELECTRIC -CIS EPC "Electricity market from Lisbon to Vladivostok. Identification ofrequired conditions."

For practical steps in the development of cross-border trade a Task Force ongeneral principles of cross-border trade with participation of Belarus, Russia,Lithuania, Latvia, Estonia and Finland was created

Within the CIS EPC - EURELECTRIC cooperation two joint working groupswere set up "Markets" and "Environment“ that elaborated a Road map “Way tocreate a compatible electricity markets in the EU and the CIS" and a Road Mapon “Key environmental issues of interconnection of the EU and the CIS electricitymarkets”

An advisory group of high level was set up to monitor the implementation of theRoad maps.


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2Concept of CIS countries energy cooperation

Approved by the Council of Leaders ofthe CIS Governments in 2009

Main directions :• Fuel and energy complex (FEC):

• Development of transnational energy transportation networks;• Upgrading production base of fuel and energy complex, new generatingcapacity;• Interaction of CIS countries in emergency conditions;• Creating long-term forecasts of energy production and consumption;• Joint development of new approaches to cooperation in energy efficiency andenergy saving;• Cooperation in the renewable energy development;• Convergence of approaches to forming pricing schemes for interstate energytrading and mechanisms for setting tariffs for transit through the territory ofthe CIS countries;

• Electricity:• Development of a common electricity energy market of the CIS countries;• Development of harmonized technical regulations in the electricity sector;• Development of hydropower based on the best world experience;• Elaboration of proposals for harmonization of legislation and regulatoryinstruments;• Creation of a common information space.


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Documents on common electricity energymarket development

In the Commonwealth, the following intergovernmental agreements and legalpapers were drafted by the CIS Electric Power Council:

► Concept on development a common electricity market (CEM CIS);► Agreement on the development of a common electricity energy market;► Protocol on steps of a common electricity energy market development;► General principles of cross-border trade in electricity energy (Step 1, Stage 1 of

CEM CIS development);► Agreement on harmonizing customs procedures in electricity interchange

through customs borders.

Within the CIS Energy Power Council approved:

► General principles of interaction between the system operators within thecommon electricity market;

► Consolidated schedule of a common electricity energy market development ofCIS countries.

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4Joint projects of power generation in CIS

Kaliningradskaya NPP 2х1200 MW2016-2018

Belorusskaya NPP 2х1200 MW2018-2020

Armianskaya NPP 1060MW2017

Ekibastuz GRES-2 600 MW2015

SantgudinskayaHPP-1 670 MW

acting

Kambaratinskaya HPP-1 900 MW2018 г.

Verhne-Narynsky Kaskad 191 MW2016


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Electricity energy market ofthe Republic of Belarus

The Belarusian energy power has avertically-integrated structure:

Republican power system comprises sixregional “oblast” energy systems,in accordance with the administrative-territorial division of the country.

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6Electricity market of Ukraine

Concept of the operation and development of the wholesale electricity market ofUkraine summarized the positive results, the main of them:- basis was set up for introduction of a competitive environment throughunbundling in the electricity industry (generation, transmission, supply);- unified energy system of Ukraine was preserved that provided reliableelectricity supply;

- functioning of a balanced power hourly market.

Scheme of the wholesaleelectricity market ofUkraine

Поставкиэлектрической

энергии/закупка на

Оптовом рынкеи розничная

продажа/

Потребителиэлектрической

энергии

Производство/ и продажа /

электрическойэнергии

ТЭЦ и ВЭС

Операторы-импортеры

электроэнергии

НАЭК“Энергоатом”

ОАО"Укргидроэнерго"

ГенкомпанииТЭС

Поставщикипо

регулируемому

тарифу

Поставщикипо

нерегулируемомутарифу

и операторы -экспортеры

электроэнергии

НКРЭ

Оптовое снабжениеелектрической энергии

ГП “Энергорынок”- формирование оптовой цены;- закупка и оптовая продажа;- распределение средств междупроизводителями электрическойэнергии в соответствии салгоритмомПередача электрической

энергииГП «НЭК «Укрэнерго»- передача электрической энергии помагистральным и межгосударственнымэлектрическим сетям;- диспетчерское управлениеобъединенной электроэнергетическойсистемой Украины.

Местные снабжающиекомпании

Передача электрической энергииместными (локальными) сетями

Обслуживаниераспредели-

тельныхсчетов

Общие сборы Оптового рынкаэлектрической энергии

в ГП"Энергорынок

"”

Миненергоуголь

Уполномоченный банк

Осуществляетраспределение

средств на основеалгоритма,

установленногоНКРЭ

Потокэлектрическойэнергии

Оплата заэлектроэнергию

Оплата запередачу

Диспетчерскоеуправление

(Советрынка)


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Structure of Kazakhstan energy power system

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Market participants enter intocontracts for purchase / sale ofelectricity as well as contracts forelectricity transmission and

dispatching.

State regulation of electric poweraimed to provide electricity and heatat economically sound, sociallyacceptable and non-discriminatoryprices.

Electricity market of the Kyrgyz Republic

CIS ENERGY POWER COUNCIL Manadgement scheme ofMinistry of energy,

Kyrgyz Republic

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The state policy of the Republic ofTajikistan in is based on the market,institutional and information mechanismsto ensure its stability and development,and protect the interests of consumers.

Prices and tariffs for energyproducts and services are set free(contract), except for the cases stipulatedby the legislation of the Republic of

Tajikistan.

Electricity market of the Republic of Tajikistan


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10Organisational structure of electricity energy of

The Russian Federation

Generation

Thermo generatingcompanies

ОАО «RusHydro»

ОАО «ConcernEnergoatom»

Energy sales companies

Consumers – market players

Market participants

Technology

System operatorFSK, MRSK, territorial grid

organisations

Market Infrastructure

Commerce

NP «Market Council»ОАО «АТС»ОАО «ЦФР»


11Foreign investors in the generation sectorof the Russian Federation


MW E.On (Germany)• Installed capacity on January 1, 2012 - 10,345 MW.• Total volume of input power - 2500 MW.• Electricity production in 2011 - over 62 billion kWh per year, accounting for 6% of thetotal annual electricity production in the Russian Federation.

ENEL (Italy)• Installed capacity - 9152 MW• The total volume of input capacity - 820 MW,

by 2013 the ENEL total installed capacity in Russia may reach 11,300 MW• Electricity production in 2011 - over 44 billion kWh

Fortum (Finland)• The total installed capacity for electricity - 3404 MW, heat - 11 735.6 MW• The total capacity increase of electric power generation within the period 2010-2014may reach 2400 MW

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November 19, 2010 within the Common economic area development an Agreement onaccess to services of natural monopolies in the electricity sector was signed including basics

of pricing and tariff policies, in particular:

- gradual harmonization of legislation, harmonization of technical rules and regulations inforce in the territory of States Parties;

-regulation of natural monopolies, rules and methods that provide full access to theirservices within the available technologies provided tariffs not exceed the rates for similarsubjects of internal electricity market;

- coordination of energy power development programs of their countries;

- single methodology, including the procedure for determining the technical conditions andvolumes of interstate transmission of electricity (power), and coordinated approaches topricing for services related to interstate transmission of electricity (power).

The development of the Common Economic Area of Russia,Belarus and Kazakhstan has created new conditions for the

integration of CIS electricity marketsCIS ENERGY POWER COUNCIL

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Энергетическое кольцо БРЭЛЛ

Energy Ring BRELL (Belarus-Russia-Estonia-Latvia-Lithuania) Electric Systems enables these countriesto work together.Energy Ring BRELL (EC BRELL) currently operates onthe basis of the Agreement signed 07 Feb 2001.

Parties to the Agreement BRELL are:

■ "Belenergo" (Belarus)■ JSC "UES", JSC “FSK UES" (Russia)■ OOO «Elering OU» (Estonia)■ JSC «Augstpieguma tikis» (Latvia)■ CJSC «LITGRIG UAB» (Lithuania)

BRELL agreement contains no provisions governingkey aspects of teamwork - a centralizedcoordinated planning, scheduling real-timesettlement of deviations power flows.

Corporate nature of the Agreement does not allowdisputes settlement arising out from partiesdifferent jurisdictions.

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Structure of Russia - EU Energy DialogueCIS ENERGY POWER COUNCIL

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Power export toPoland, Lithuania,Germany – Poweroutput of the BalticNPP

Power export 200 MWto Norway – «Pechenegaenergy bridge»

Power export up to 350 MW toFinland - reverse organization atVyborg Transformer Unit

Map-scheme of existing power grids above 220 kV inthe north-western part of the UES Northwest and

perspectives till 2018CIS ENERGY POWER COUNCIL

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The baseline of the existing projectfeasibility study involves a transfer ofelectricity generated by existinggeneration facilities in the growingseason.

Efficiency of the project could beincreased with:> Electric power transmission throughproject power grids in OZP (Russia is apotential supplier);> Construction of new generationfacilities (Kambarata HPP- 1, Russian-Kyrgyz joint project, small and mediumhydropower plants in Tajikistan).

The solution of the existingtechnological constraints in the region -a necessary condition for the successfulimplementation of the Project.


CASA – 1000 – project of regional development

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4715 км

5635 км

3 variants

Ekibastuz (Kazakhstan) – Berlin, Ili (Syntsyan, China) – Berlin


Intermediate electricity power flow

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MEANS TO ACHIEVE A COMMON GOAL:- Exchange of knowledge, expertise and technology;- Approximation of national legislation in the sphere of electric power;- Optimization of the energy infrastructure in the regions of the EU and the

CIS;- Forcasting of energy balance in the regions of the EU and the CIS that

complies with the requirements of reliability and optimal power supplyof the States-Participants;

- Creating the conditions for mutual investment to replace retiringgeneration and transmission powers.

CIS EPC PROPOSAL:To focus joint efforts to achieve a common goal– to ensure reliable energy supply to theeconomies and population of their countries


19Priority areas of cooperation betweenEURELECTRIC and EPC CIS


Creation of conditions for the development of cross-border electricity trade atthe interface of energy power systems of EU and CIS :

• study of the energy balance of the energy area of CIS and EU anddevelopment of proposals to improve the reliability and efficiency of powersupply of countries-participants;

• Promoting cooperation between infrastructure institutions and energyregulators of the interface EU – CIS;

• Development of proposals for the mutual lowering of barriers to investmentin the modernization of existing and construction of new power units;

• Cooperation in energy efficiency, energy saving, environment andrenewable energy development.

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THANKS FORYOUR ATTENTION

THANKS FORYOUR ATTENTION


PRESIDENTCIS ENERGY POWER COUNCIL,

MINISTER OF ENERGY OF RUSSIAN FEDERATIONALEXANDER V. NOVAK

ADDITIONAL INFORMATIONADDITIONAL INFORMATION


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ЭГРЭС-2


Priority projects in the CISKAZAKHSTAN

JSC "Ekibastuz-2"Installed capacity - 1000 MW(2 units, 500 MW each).Equity structure:- 50% - JSC "INTER RAO UES"- 50% - of "Samruk Kazyna".

Pursuant to the Agreement between theGovernment of the Russian Federation andthe Government of the Republic ofKazakhstan, the project "Enlargement andmodernization of Ekibastuz GRES-2 powerplant number 3“ is in progres.

Estimated project cost is about $ 1 billion

To date, advance payments made for thesupply of the main equipment.

September 18, 2012 Memorandum betweenJSC "INTER RAO UES" and JSC Samruk-Energo“ on construction of the 4th unit ofEkibastuz TPP-2 was signed.

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The Concept of energy security of the Republic of Belarus,approved by Presidential Decree № 433 September 17, 2007,previews construction of two nuclear units by 2020 with totalcapacity up to 2,000 MW

To improve the country's energy security and diversify energyresources.

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КГЭС-1


Priority projects in the CISKYRGYZSTAN

• JSC «Kambarata HPP-1»• 20.09.2012, Bishkek, Agreement on

construction and operation ofKambarata HPP-1 was signed by theGovernments of Russia andKyrgyzstan.

• The installed capacity from 875 MW(5 units 175 MW) to 1940 MW (4units 485 MW) is considering.

• Structure of joint-stock capital:

• - 50% - JCS «INTER RAO UES»,

• - 50 % - SC «Electric plants».

• Currently measures ensuring thefinancing of feasibility study ulteriorexecution of the project areundertaken.

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СГЭС


Priority projects in the CISTAJIKISTAN

JSC «Sangtuda HPP-1»• Installed capacity – 670 MW (4

units 167,5 MW).

• Structure of joint-stock capital:

• - 75% -1 share – Russia Party,

• - 25% + 1 share – Tajik Party

• Construction finished.

Construction of new HPPinTajikistan

• 05.10.2012 Energy Ministry ofRussia and Industry and EnergyMinistry of Tajikistan signed acooperation memorandum onconstruction of small and medium-sized HPP in Tajikistan..

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1. Projects ensuring power evacuation from Kaliningrad power system:- transmission line Kaliningrad – Poland with a B2B station 600 MW;- reinforcement of Kaliningrad – Lithuania cross-border network 330 kV, increased transmission capacity upto 1000-1500 MW;- construction of an undersea (Baltic) direct current cable Kaliningrad – Germany with a capacity up to 1000MW.

2. Transmission projects between Belarus and Poland- construction of Ross-Narew line with a back-to-back (B2B) station;- construction of a B2B station in Brest-2 – Vulka Dobrynska line

A joint enterprise between GPO “Belenergo” and JSC “INTER RAO UES” was created for constructioncross-border infrastructure.

3. “Power bridge Pechenga” projectRussian Party initiated and examined with Norwegian TSO Statnett the project of new 200 MW transmissionlink between Norway and Russia (“Pechenga power bridge”. It will create possibility to cover the expectedpower shortage in the northern Norway, increase the two countries’ consumers power supply stability, givelarge possibility of power exchange (bidirectional) – up to 1,5 TWh/year.The project is supported by Statnett due to its feasibility for Norwegian Party.Negotiations are planned at Norway and Russian Ministries of Energy to discuss the agreements on theproject.

4. Transfer of part of Moldavian TPP units to Romania power systemThe project aims the radial operation of units NN 11-12 with Romanian PS via the 400 kV line MoldavianTPP – Vulcanesti (Moldova) – Isaccea (Romania). The project includes realization of measures in MoldavianPS ensuring non-degradation of consumers supply conditions and modernization of primary frequency controlon named units, as well as solving energy market aspects in Romania. Possible export – up to 450 MW

CIS projects in West direction

1 1 CIS EPC and EURELECTRIC

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