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F.A.Q.

What is the aim of the project, what impact does it have on the economic development of the Russian Far East?

The aim of the project is to gradually increase the amount of electricity supplied to Chinese consumers in accordance with plans agreed by the parties. The project covers several areas, from supplying surplus electricity to Chinese border areas from the Amur Region via existing power transmission lines, to construction of the first 500 kV power transmission line between the two countries and of new power generation facilities and grids.

Electricity that is not in demand on the domestic market is exported. This guarantees additional loading of generating capacities and power transmission lines in the region, as well as partly covering the cost of maintaining the Unified Energy System of the East. It also boosts the utilization rate of installed capacity and generates considerable additional revenue.

Implementation of the project to export electricity to China will foster the economic development of the Far East and is economically and socially important. As electricity exports increase, the region’s export structure will improve and regional GDP will grow, together with tax payments into the regional budgets. In addition, the price of electricity for consumers in the Far Eastern Federal District will fall.

Who is the contract-holder for electric power export from Russia to China?

JSC Eastern Energy Company (a wholly-owned subsidiary of PJSC Inter RAO) is the holder of the Sales and Purchase Contract for the first phase of the project to export electrical power from Russia to China. JSC Eastern Energy Company is also a party to the Contract to supply electrical power to China in the framework of cross-border trade, signed with the State Grid Corporation of China in February 2009.

Which companies are EEC's partners in the project?

JSC Eastern Energy Company is working on this project with the State Grid Corporation of China and Russian energy companies that are active in the Far Eastern Federal District: PJSC RusHydro, PJSC RAO Energy Systems of the East, JSC Far Eastern Generating Company, and PJSC Federal Grid Company of Unified Energy System (FGC UES).

Why is electricity sold to China at a lower price than to residents of the Russian Far East?

This is incorrect information based on a comparison between wholesale prices for Chinese partners and retail prices for Russian consumers. Unlike the wholesale price, the retail price incorporates considerable additional costs related to the delivery of electricity to consumers. This includes the cost of transmission and distribution, payment for services provided by commercial infrastructure organizations on the wholesale market, technical and commercial losses in grids, including losses related to voltage conversion for the consumers' power systems, the established profit rate of all players in the electricity supply chain, and taxes.

How will electricity exports to China be increased? What are the target figures of the project?

The electricity supply schedule and volumes must be agreed between China and Russia. At present, the countries are cooperating in the power industry under a long-term contract with the State Grid Corporation of China. This document provides for the delivery of up to 100 billion kWh over 25 years.

What capacities are to be commissioned during the implementation of the project on increasing electricity exports to China?

At present, electricity is supplied to China via three power transmission lines: the 110 kV Blagoveshchenskaya – Heihe power line, the 220 kV Blagoveshchenskaya – Aigun line and the 500 kV Amurskaya – Heihe line. A feasibility study is underway on the development of the Erkovetsky brown coal deposit and construction of a coal-fired thermal power plant there.

Which regions of Russia and the People's Republic of China are involved in the project?

The Amur Region bordering on the Chinese province of Heilongjiang is the key region in the project to increase electricity exports to China. As the project develops, opportunities for constructing new generating capacities both in the Far Eastern Federal District and in East Siberia are being considered. The potential consumers of the exported electricity include people and enterprises in Heilongjiang and Liaoning Provinces, as well as near Beijing, the Chinese capital.

China continues to actively develop alternative energy sources. How feasible is it to build coal thermal power planst in the Russian Far East?

The Chinese government is pursuing a policy of urbanization and encouraging economic development and domestic demand by improving the standard of living of its citizens, thereby greatly increasing electricity consumption in millions of households. This means that demand for electricity in the country will continue to be high.

Today, electricity in China is generated mainly by coal-fired power plants (about 80%). At the same time, China's large coal deposits are insufficient for increasing electricity generation to the required level. In recent years, coal imports and its transportation via the Chinese rail network have increased considerably. This is why it is important to diversify energy sources by, on the one hand exporting electricity, and on the other, developing wind and solar energy in regions where there is considerable potential.