Ivannikov Presentation

Alexey Ivannikov, Head of Management & Development DepartmentGeographical Unit “Europe”, JSC “INTER RAO UES”Development of EU-Russia cooperation in electricity sectorContentsGeneral information about INTER RAO UESActivities in renewable energyBaltic & Nordic electricity grid interconnection projectsINTER RAO UES todayINTER RAO UES Holding owns electric power generating,engineering, distribution and trading assets in Russia andother countries•Diversified energy holding managing assetsin Russia, Finland, Baltic & CIS countriesResults of 2010•29 GW of total installed power generatingElectricity production 21 TWhcapacityElectricity export 17,65 TWh•Presence in all key sectors of the Russianelectricity marketElectricity import 2,92 TWh•Major electricity supplier to Nordic & BalticRevenue 2 billion EURmarkets (INTER RAO UES Group holds 40% ofLithuanian & 7% of Finnish markets)EBITDA 292 mil. EUR•Active cooperation with the EU. Energysupplies, trading subsidiaries, Number of employees 2300interconnection projects, participation in EU-Russia Energy Dialogue & development of EU-Russia Energy Roadmap 2050INTER RAO UES group is involved into majorintergovernmental projects in electric energy sectoras a commercial partner3Company’s presence in the EUINTER RAO UES Group is presented in the EUby its daughter companies & theirsubsidiaries. All these companies arefunctioning on the EU territory in accordancewith the EU laws and regulations•RAO Nordic Oy was established in 2002 and•UAB INTER RAO Lietuva, based in Lithuania, is an independent100% owned by INTER RAO UESelectricity trading company on the Baltic market•Company operates in the Nordic power•Besides the internal trades, INTER RAO Lietuvamarket and involved in both physical andimports electricity from Belarus & Russia and operates a 30 MW wind parkfinancial trading. In addition it providesstandard and tailor-made energy related •INTER RAO Lietuva has trading subsidiaries in Latvia and Estoniaproducts for large companies and power4utilities in the Nordics.Understanding EU RES TargetsA fundamental DIRECTIVE 2009/28/EC and the corresponding EU countries’ local legislationdemand that the share of RES in the total energy balance constitute 20% by 2020.Wind Energy is the most promising RES technology in the EU at the moment, with an annualaverage market growth of 17.6% and a total of 84 278 MW installed capacity*.INTER RAO UES realizes the crucial need of the European countries to deploy newwind power capacity, and therefore, considers wind farm projectsas one of itsbusiness developments on the European market.•In July 2011 INTER RAO UES has finalized an acquisition of Vydmantai wind farm in Lithuania.Capacity: 30 MW.Turbines: Enercon E-70 2MW.Number: 15 turbines.Average annual production: 65 000 MWh.Energy is sold by the trading office of “INTER RAO Lietuva”.•INTER RAO UES is assessing a number of perspective wind projects on the target markets. Themain criteria are: (1) wind speed at hub height >7 m/s, (2) sustainable RES support mechanism.5* Source –EWEA, statistics for 2010.Wind Energy PerspectiveThe following map represents actualplans of the Nordic and Baltic countries (region of INTER RAO’sstrategicpresence and interest) to install new wind power capacity by 2020:Harnessing such ambitious amounts of7600 MWvariable resource requires technicalpossibility to balance it.Balancing of wind power (security of2500 MW supply) can be achieved by:9000 MW1.Deployment of new (reserve)generation capacities.270 MW2.Increasing flexibility of the powersystem.916 MW3.Creating new interconnections withother power systems.1000 MWINTER RAO UES is working on the uniqueportfolio of the interconnection projects, that12500 MW49000 MW would allow backing-up the wind powergenerators and improve power systems’operation security in general.6Baltic region interconnection projects• Map of the projectsKaliningrad — Lithuaniainterconnection project impliesreinforcement of the 330kV lineand is the most technically feasible.•Kaliningrad — PolandKKaalliinniinnggrraadd--LLiieettuuvvaainterconnection project implies iinntteerrccoonnnneeccttiioonnrreeiinnffoorrcceemmeennttconstruction of 400kV transmission HHVVDDCC ccaabbllee ttoo GGeerrmmaannyyline with B2B substation at Russianterritory up to 800MW of capacity.The project is being thoroughly KKaalliinniinnggrraadd--PPoollaannddiinntteerrccoonnnneeccttiioonnstudied by the Russian-Polish jointworking group.•Kaliningrad — Germanyinterconnection project impliesconstruction of an underwaterHVDC link with partial exploitationof existing “Nord Stream” gaspipeline infrastructure.7Russia – Norway InterconnectionRussia – Norway InterconnectionOptimal technical solutionMap of the ProjectPechenga Power Bridge:2х28MW1. Reversible back-to-back DC link 100 MW (2014)100 (250) MW2. DC link expansion up to 250 MW (after 2020)NICKEL“Pechenga” Power Bridge ProjectINTER RAO UES and the Norwegian Transmission System Operator“Statnett” haveto Finlandformed a Work Group to: (1) jointly assess the Project of constructing2х23.5MWthe newinterconnection between the Russian and Norwegian Power Systems3х14.4MW(100-150 MW),2х15MW2х5.6 MW (2) identify the most optimal technical alternative and (3) estimate thecapital“Pechenga” Power Bridge Project will construction costs.allow significantly increasing the powerThe Project implies construction of:exchange between two countries and1.A reversible back-to-back DC-link at the Russian substation “Nickel”.enhance power systems’ stability and 2.A cross-border 132 kV AC overhead line.technical manageability. It will also 3.Some reinforcements of the existing Russian grid.provide a technical opportunity for newCurrent Status:businesses – power systemsThe Ministry of Energy of Russia and the Ministry of Petroleum andreservation and balancing ofEnergy of Norway have reached an agreement to create a jointScandinavian wind farms.Ministry Work Group for realization of the Project.8Russia – Finland InterconnectionMap of the Projectnew cross-border 110 kV lineKarelian Power Bridge ProjectINTER RAO UES is working together withBack-to-back DC linkthe Finnish Transmission System Operator220/110 kV“Fingrid” on realization of the new80 MW – 1st Stageinterconnection between the Russian and150 MW – 2nd StageFinnish Power Systems with the capacity of80-150 MW.Puhos 110 kVSortavala 220 kVCurrent project status: INTER RAO is discussing possibilities ofcompleting the Project in partnership with several Finnishcompanies.Next steps: After final determination of the partners, INTER RAOUES will start design-engineering works and proceed toconstruction of the interconnection. 9Belorussia – Poland Interconnection•In order to develop cross-border Belorussiainterconnections between Poland & PolandBelorussia INTER RAO UES &Belorussian Belenergo haveBelorussia-Polandestablished a JV “Energoconnect”interconnection + B2BStation 500 MW•“Energoconnect” is responsible fordevelopment of 2 interconnectionprojects, both implying constructionof the B2B substations:Belorussia-Poland-Construction of 400kV link with B2B interconnection + B2BStation 200 MWsubstation up to 1000MW-Reinforcement of 100kV link withB2B substation of 200MW•After implementation of the projects“Energoconnect” shall executetrading functions, selling bothRussian & Belorussian electricity to10Polish counterpartsBaltic interconnection projects —benefits for the region•New interconnections will secure energy sustainability of the region.•Environmentally friendly decision.•Backup of new renewable capacities normal operation mode.•Greater possibilities for diversification of the sources of power supplies,balancing and reserves.•Expanding of the trading activities in the region.•New opportunities for market integration.•Higher level of market mobility.11Alexey IvannikovHead of Management andDevelopment DepartmentGeographical Unit “Europe”INTER RAO UESIvannikov_AV@interrao.ru