RUSHYDRO JSC NIIES March 2010
RUSHYDROJSC NIIES
March 2010
WWW.RUSHYDRO.RU
2
RusHydro at a Glance
Operating HPPs GeoPPs
Operating HPPs with construction continued Tidal PPs Research and development institutes
HPPs in construction Wind PPs Energy retail companies
Capacity 25,426 MWElectricity production 2009 81,608 GWhAverage multi-year annual production 79,761GWhNumber of generating units 532008 Revenue, USD mln 4,328 2008 EBITDA, USD mln 1,356Market Cap, as of Feb. 2, 2010 USD mln 11,600
Shareholders structure as of 31.12.2009
Government of Russian Federation 60.38%
Minority shareholders 39.62%
incl. ADR and GDR holders 8.08%*
Maximum size of ADR and GDR program 13.9%
WWW.RUSHYDRO.RU
3
Robust Strategy: Safety, Integration and Focused Growth
Focus on safety and reliability
Revised investment
strategy
Enhanced international
presence
New focus on engineering
Improve of technical policyRevised R&M programLong-term contracts with reputable service and equipment providersEstablishing central technical monitoring body
Focus on priority projects Balanced, long-term return-based investment policyImprovement of terms of cooperation with co-investors (incl. RUSAL
and governmental bodies) RES sector development
Strategic partnerships with leaders in retail sector, energy services and engineering (PÖRY, SNC Lavalin i.g.)Strengthening cooperation with leading Russian companies in
international activities, including energy export Proactive participation in international projects
Leveraging existing engineering expertise through establishing integrated engineering company Strategic partnerships with international leaders M&A and JVs where appropriate
WWW.RUSHYDRO.RU
4
0
10000
20000
30000
40000
50000
60000
70000
80000
Siberia and Far-East Central Region Russian South Region(incl. North Caucasus)
RusHydro total
2007 2008 2009
**
Results: Production 2009
2008, GWh 2009, GWh ∆,%
Siberia and Far East 32,290 32,370 0.2%
Sayano-Shushenskaya HPP 20,764 17,479 -15.8%
Central Region 40,696 41,372 1.7%
Russian South Region (incl. North Caucasus) 7,287 7,863 7.9%
RusHydro Total 80,273 81,608 1.7%
2009 production increase primarily driven by:
Rushydro’s electricity production in 2009 increased by 1.7% despite the accident on Sayano-Shushenskaya HPP
Increased flows into the HPP’s reservoirs during the previous winter; Increased load during floods; Production over the balance by Far East HPPs, in conjunction with electricity exports to China.
WWW.RUSHYDRO.RU
5
RusHydro conducts R & D in micro- and small-scale hydro-power, tidal and wind energy, development of small- capacity boilers and diesel-generators.
Rivers and spillway systems are being surveyed in the context of small-scale HPPs feasibility studies.
Exploitation of the Renewable Energy Sources
Tidal energy
Pilot Tidal HPP Severnaya
Pilot operation of multi-level orthogonal hydro-units as prototype for the prospective project of THPP Mezenskaya in Archangelsk region.
Development, manufacturing and testing of pontoon concrete blocks in conditions of boreal sea.
Innovation in geothermal energy
Construction of new binary power unit at Pauzhetskaya GeoPP
Construction of the new block will:
make more efficient use of thermal agent without costly drilling through utilization of heat from below-grade and spent geothermal water;provide long term reliable, uninterrupted power supply.
WWW.RUSHYDRO.RU
6
Russky Island
Installed capacity, MW 16
Popov island
Installed capacity, MW 20
Far East Wind Farm Russky and Popov Islands – Pilot Project in Wind Generation
Key parameters
Number of wind turbines, units 18
Unit capacity, MW 2
Installed capacity, MW 36Average annual output, no less than, mln kWh 90
Commissioning date Q2 2012
Co-operation memorandum with Japanese partners Mitsui and J-Power had been signed on May 12 in regards to implementation of Far East Wind Farm project.
Landmark pilot project in Wind Generation as source of power supply to APEC Summit.
Goal of the Wind Farm
Summit Zone
General design agent JSC«NIIES»
WWW.RUSHYDRO.RU
7
Renewable energy
International (corresponding IEC,
ISO standards)
International (corresponding IEC,
ISO standards)
IEC 61400-1 Wind turbines. Design Requirements
IEC 61400-12-1: 2005 Wind turbines – Part 12-1: Power performance
measurements of electricity producing wind turbines
IEC 61400-21: 2008 Wind turbines – Part 21: Measurement and assessment of power quality characteristics of grid
connected wind turbines
IEC 61400-1 Wind turbines. Design Requirements
IEC 61400-12-1: 2005 Wind turbines – Part 12-1: Power performance
measurements of electricity producing wind turbines
IEC 61400-21: 2008 Wind turbines – Part 21: Measurement and assessment of power quality characteristics of grid
connected wind turbines
Renewable EnergyRenewable Energy: : StandardizationStandardization
Government (corresponding
GOSTs)
Government (corresponding
GOSTs)
System Standardization for Renewable Energy;Wind Power Plants, Geothermal Power Plants,
Tidal Power Plants
GOST R Wind turbines. Design Requirements . MOD
GOST R Wind turbines. Design Requirements . MOD
Latest Results
•RPP. Creation. Norms, Terms and Requirements •RPP. Operation and Maintenance. Norms and requirements•RPP. Industrial and Staff Safety. Norms and Requirements
Company RusHydro(JSC UES of Russia)
GOST R Wind PPs. Operational & Maintenance Safety
Requirements
GOST R Wind PPs. Operational & Maintenance Safety
RequirementsGOST R Wind PP Constructions.
Base Safety RequirementsGOST R Wind PP Constructions.
Base Safety Requirements
WWW.RUSHYDRO.RU
8
High construction capital costs
High construction capital costs
Renewable EnergyRenewable Energy: : barriers to development in RFbarriers to development in RF
development
development
Investment idea, making decision on RES project implementation
Investment idea, making decision on RES project implementation
Long investment
payback period
Long investment
payback period
Low sector investment potential
Low sector investment potential
b a r r i e r s b a r r i e r s
х
Government support to RESGovernment
support to RES
Inadequate support
regulatory and legal framework
Inadequate support
regulatory and legal framework
Indefinite language of
effective laws
Indefinite language of
effective lawsх
Project implementation
Project implementation
Russian industry’s unpreparedness for large-scale production of RES
equipment
Russian industry’s unpreparedness for large-scale production of RES
equipment
Lack (absence) of technologies
Lack (absence) of technologies
х
a set of measures is requireda set of measures is requiredv
Lack of distinct
signals for the business
Lack of distinct
signals for the business
WWW.RUSHYDRO.RU
9
The current state of the regulatory and legal framework for renewable The current state of the regulatory and legal framework for renewable electricity developmentelectricity development
Objective: to create legal and economic prerequisites for active development of renewable energy and the enhancement of sector investment potential
Objective: to create legal and economic prerequisites for active development of renewable energy and the enhancement of sector investment potential
FL No. 35-FZ on “Electricity” as amended by FL No. 250-FZ of November 4, 2007
FL No. 35-FZ on “Electricity” as amended by FL No. 250-FZ of November 4, 2007
Basic documentsBasic documents
RF President Decree No. 899 of June 4, 2008on “Some Measures for the Enhancement of Energy and Environmental Efficiency of Russian Economy”
RF President Decree No. 899 of June 4, 2008on “Some Measures for the Enhancement of Energy and Environmental Efficiency of Russian Economy”
Renewable energy sources are classifiedMajor measures for the support of RES-based electricity development are
outlinedGovernment bodies’ powers for triggering mechanisms of renewable energy
governmental support are determinedThe situation with non-price and isolated zones and retail markets is unclear
Renewable energy sources are classifiedMajor measures for the support of RES-based electricity development are
outlinedGovernment bodies’ powers for triggering mechanisms of renewable energy
governmental support are determinedThe situation with non-price and isolated zones and retail markets is unclear
Enhancement of economic and environmental efficiency of major economic sectors
Drafting of FLs that stimulate the use of clean technologiesStronger responsibility for noncompliance with admissible environmental impact
standardsProvision of government-financed support for the use of renewable energy
sources and clean technologies
Enhancement of economic and environmental efficiency of major economic sectors
Drafting of FLs that stimulate the use of clean technologiesStronger responsibility for noncompliance with admissible environmental impact
standardsProvision of government-financed support for the use of renewable energy
sources and clean technologies
PP No. 426 on the “Qualification of RES-Based Generating Facilities”
PP No. 426 on the “Qualification of RES-Based Generating Facilities”
Procedure and criteria for qualifying a generating facility as a RES-based generating facility Guidelines for its support with the development of the following regulatory documents (listed below)
Procedure and criteria for qualifying a generating facility as a RES-based generating facility Guidelines for its support with the development of the following regulatory documents (listed below)
WWW.RUSHYDRO.RU
10
The current state of the regulatory and legal framework for renewable The current state of the regulatory and legal framework for renewable electricity developmentelectricity development
Government resolution on “Determining the Guidelines of Government Policy for Enhancing Energy Efficiency of RES-based Electricity for the period up to 2020”
Government resolution on “Determining the Guidelines of Government Policy for Enhancing Energy Efficiency of RES-based Electricity for the period up to 2020”
Government resolution on “The Procedure for Keeping the Register of Issuing and Redemption of Certificates confirming the Volume of Electricity Produced at Qualified RES-Based Generating Facilities”
Government resolution on “The Procedure for Keeping the Register of Issuing and Redemption of Certificates confirming the Volume of Electricity Produced at Qualified RES-Based Generating Facilities”
Government resolution on “The Criteria and Procedure for Granting Government Subsidies from budget to Compensate for the Cost of Technological Connection of RES-Based Generating Facilities”
Government resolution on “The Criteria and Procedure for Granting Government Subsidies from budget to Compensate for the Cost of Technological Connection of RES-Based Generating Facilities”
Government resolution on “The Procedure for Markup Pricing of Electricity Produced at RES-Based Generating Facilities”
Government resolution on “The Procedure for Markup Pricing of Electricity Produced at RES-Based Generating Facilities”
Government resolutions on the introduction of amendments and additions to the current documents (retail markets and wholesale market regulations, pricing principles) designed to facilitate triggering
of the above mentioned mechanisms of RES energy support
Government resolutions on the introduction of amendments and additions to the current documents (retail markets and wholesale market regulations, pricing principles) designed to facilitate triggering
of the above mentioned mechanisms of RES energy support
Establishes markups to be applied for RES-based generation with differentiation according to RES types and validity periods
Establishes markups to be applied for RES-based generation with differentiation according to RES types and validity periods
Establishes the procedure for keeping the Register of issuing and redemption of “green” certificates.
Establishes the procedure for keeping the Register of issuing and redemption of “green” certificates.
Determines the guidelines of government policy in RES, formulates its goals and objectives Establishes quantitative targets for RES development over a long-term period
Determines the guidelines of government policy in RES, formulates its goals and objectives Establishes quantitative targets for RES development over a long-term period
Establishes the criteria and procedure for granting subsidies for technological connection of RES-based facilities Instructs Minenergo to develop the procedure for granting such subsidies
Establishes the criteria and procedure for granting subsidies for technological connection of RES-based facilities Instructs Minenergo to develop the procedure for granting such subsidies
Government resolution on “Government Support for the Implementation of RES Projects”
Government resolution on “Government Support for the Implementation of RES Projects”
Establishes additional measures of government support of RES: compensation for interest on credits and lease payments, and partial insurance costs
Establishes additional measures of government support of RES: compensation for interest on credits and lease payments, and partial insurance costs
A package of subordinate acts to support RES-based energy developedA package of subordinate acts to support RES-based energy developed
WWW.RUSHYDRO.RU
11
Government resolution on “Determining the Guidelines of Government Policy on energy-efficiency and renewable energy sources ”
RES Target indicators adopted in the Resolution:by Y2010 – 1,5%by Y2015 – 2,5%by Y2020 – 4,5%
RES Target indicators adopted in the Resolution:by Y2010 – 1,5%by Y2015 – 2,5%by Y2020 – 4,5%
The signed document contains basic long-term renewable energy policy guidelines as well as numerical targets till 2020.
The whole range of documents allows business community shift its investment interests towards renewable energy sources.
The signed document contains basic long-term renewable energy policy guidelines as well as numerical targets till 2020.
The whole range of documents allows business community shift its investment interests towards renewable energy sources.
The Resolution № 1-р on the Government resolution “Determining the Guidelines of Government Policy for Enhancing Energy Efficiency of RES-
based Electricity for the period up to 2020” was signed by the Prime Minister on January 8th, 2009
The Resolution № 1-р on the Government resolution “Determining the Guidelines of Government Policy for Enhancing Energy Efficiency of RES-
based Electricity for the period up to 2020” was signed by the Prime Minister on January 8th, 2009
WWW.RUSHYDRO.RU
12
The current state of the regulatory and legal framework for renewable The current state of the regulatory and legal framework for renewable electricity developmentelectricity development
A package of draft subordinate acts submitted to the RF Energy MinistryA package of draft subordinate acts submitted to the RF Energy Ministry
Government resolution on “Determining the Guidelines of Government Policy…”
Government resolution on “Determining the Guidelines of Government Policy…”
Government resolution on “The Procedure for Keeping the Register of Issuing and Redemption of Certificates…”
Government resolution on “The Procedure for Keeping the Register of Issuing and Redemption of Certificates…”
Government resolution on “The Criteria of and Procedure for Granting Subsidies from budget to Compensate for the Cost of Technological Connection of RES-Based Generating Facilities”
Government resolution on “The Criteria of and Procedure for Granting Subsidies from budget to Compensate for the Cost of Technological Connection of RES-Based Generating Facilities”
Government resolution on “The Procedure for Introducing a Price Markup for RES-Based Generating Facilities”
Government resolution on “The Procedure for Introducing a Price Markup for RES-Based Generating Facilities”
Overall, adoption of the package of regulatory and legal acts, amended in the course of their approval, solves the problem of providing support to renewable energy projects but reduces the status of basic documents from the governmental level
to the ministerial and departmental levels
Overall, adoption of the package of regulatory and legal acts, amended in the course of their approval, solves the problem of providing support to renewable energy projects but reduces the status of basic documents from the governmental level
to the ministerial and departmental levels
Government resolution on “Measures of Governmental Support for Implementation of RES-based Projects”
Government resolution on “Measures of Governmental Support for Implementation of RES-based Projects”
The document signed by the GovernmentThe document signed by the Government
Document Current state of and amendments to documents
The document was redrafted as an Energy Ministry Order and signed
The document was redrafted as an Energy Ministry Order and signed
The document establishes only the criteria for granting subsidies; Energy Ministry should develop the relevant procedure. The document is discussed in Ministries.
The document establishes only the criteria for granting subsidies; Energy Ministry should develop the relevant procedure. The document is discussed in Ministries.
The document is under review in Energy Ministry. RF Federal Tax Service is charged with markup calculation and introduction.
The document is under review in Energy Ministry. RF Federal Tax Service is charged with markup calculation and introduction.
The documents have been submitted to Energy Ministry and are under consideration .
The documents have been submitted to Energy Ministry and are under consideration . Government resolution on “Governmental resolutions on
Amending the Current RLA ”
Government resolution on “Governmental resolutions on Amending the Current RLA ”
WWW.RUSHYDRO.RU
13
The concept provides for the enhancement of renewable electricity production net of large and medium HPPs (from 8.0 TWh in 2007 to 80 TWh in 2020 and 120-150 TWh in 2030 (6-8% of the total electricity
production), an increase in the installed capacity of RES-based HPPs up to 22 GW by 2020, net of HPPs with an installed capacity of over 25 MW)
The concept provides for the enhancement of renewable electricity production net of large and medium HPPs (from 8.0 TWh in 2007 to 80 TWh in 2020 and 120-150 TWh in 2030 (6-8% of the total electricity
production), an increase in the installed capacity of RES-based HPPs up to 22 GW by 2020, net of HPPs with an installed capacity of over 25 MW)
Renewable energy development in Russia – a national Renewable energy development in Russia – a national prioritypriority
Target/year 2005 2010 2015 2020 2025 2030
Renewable energy, TWh 7.0 17.8 36.7 80 150 280
Renewable energy share under scenario 1, % 0.73 1.56 2.64 4.71 7.46 12.17
Renewable energy share under scenario 2, % 0.73 1.56 2.57 4.5 6.98 11.2
Renewable energy development targets are laid down in the draft Energy Strategy of Russia up to 2030
Renewable energy development targets are laid down in the draft Energy Strategy of Russia up to 2030
Renewable energy development targets are laid down in the Concept of Long-Term
Socioeconomic Development of the Russian Federation up to 2020,
approved by RF Government resolution No. 1662-4 of November 17, 2008
Renewable energy development targets are laid down in the Concept of Long-Term
Socioeconomic Development of the Russian Federation up to 2020,
approved by RF Government resolution No. 1662-4 of November 17, 2008
WWW.RUSHYDRO.RU
14
Renewable energy developmentRenewable energy development: : legal framework development outcomeslegal framework development outcomes
Final adoption of the package of regulatory and legal acts provided for under effective law
Final adoption of the package of regulatory and legal acts provided for under effective law
Further improvement of energy-saving and renewable energy laws: drawing up a federal law on RES development support, drawing up of draft federal laws on Heat Supply
Further improvement of energy-saving and renewable energy laws: drawing up a federal law on RES development support, drawing up of draft federal laws on Heat Supply
Stimulation of domestic R&D work, support for technology transfer, localization of production of RES equipment in RF
Stimulation of domestic R&D work, support for technology transfer, localization of production of RES equipment in RF
Exploration and protection of RES potentials and resources (geothermal fields, river flow and dam sites, other RES sites)
Exploration and protection of RES potentials and resources (geothermal fields, river flow and dam sites, other RES sites)
Government support for individual RES-based projects (especially in isolated service areas)
Government support for individual RES-based projects (especially in isolated service areas)
Training of qualified personnel Training of qualified personnel
The main step to RES development is establishment of RES development priority on the national level
The main step to RES development is establishment of RES development priority on the national level
Renewable energy and energy-saving promotion as a wholeRenewable energy and energy-saving promotion as a whole
WWW.RUSHYDRO.RU
15
Thank you for your attention!
Renewable Energy Department&
JSC NIIES