Cooperation roadmap RF-EU (Electric Power sector) Moscow, 23-24. 05 1. UPS of Russia (some figures) 2. Russian electric industry priorities 3. Interaction (collaboration) benefits 4. Collaboration barriers 5. Target situation 6. Concrete proposals

Nordic Interconnection Global view Western Europe Installed capacity: 765 GW Maximal load: 452 GW Consumption: 2861 TWh Nordic Interconnection Installed capacity: 96.7 GW Maximal load: 61.1 GW Consumption: 375 TWh IPS/UPS Installed capacity: 337 GW Maximal load: 216, GW Consumption: 1285 TWh IPS/UPS Nordic ENTSO-E 2

Milestones of the recent history of the synchronous zone: IPS/UPS structure IPS/UES Structure IPS/UES Structure Milestones of the recent history of the synchronous zone: In 1962 “MIR” power systems Interconnection was established with the total installed capacity more than 400 MW. It united power systems from Berlin to Chita 1991 – the power grid of Armenia stopped parallel operation with IPS/UPS 1993 – breakdown of the power Interconnection “MIR”; 2000 – restoration of parallel operation of the UPS of Kazakhstan and IPS of Ukraine with UPS of Russia 2002 – transfer of Burshtyn island (Ukraine) to parallel operation with UCTE; 2003 – transfer of the power system of Turkmenistan to parallel operation with the power system of Iran. IPS of the East (Р inst~ 9 GW) functions separately with IPS/UPS. Kazakhstan Georgia Armenia Azer Belarus Lithuania Latvia Estonia Moldova Turkmenistan Uzbekistan Kyrgyz Tajikistan Mongolia Finland Iran Turkey Roman Hungary Slovakia Poland Norway Romania 1000 2200/1800 300 400 1600/1900 1200/1000 2700/2800 1200/1500 1700 900 Siberia Center Urals Middle Volga South North-West Ukraine Kaliningrad 680 1400 327 150 2100 2000/2200 900/1250 1200 1600/2100 1300/1750 400 800/300 1800/2500 +/-1150 IPS/UES Structure IPS/UES Structure 3

UPS of Russia installed capacity – 215 GW NPP CC, GT Industrial TPP+HPP HPP CHP TPP

UPS of Russia Peak load and consumption GW TWh Peak load Peak load Consumption

Limited Volumes of exchanges Insignificant Russian Export/Import Limited Volumes of exchanges Countries 2010 , billion kWh Baltic countries 2010, billion kWh Export Import Export Import Azerbaijan 0.018 0.203 Estonia Belarus 0.029 Latvia 0.007 6 Ukraine 0.032 0.081 Lithuania 5.106 0.003 Finland 11.058 Total for the Baltiсs 5.113 0.003 Norway 0.21 Integral indicators for Russia in 2010: Export – 19.362 billion kWh, Import – 2.923 billion kWh. Georgia 0.212 1.117 Kazakhstan 1.376 1.498 China 0.983 Mongolia 0.214 0.021 The shown data demonstrate insignificant for the Russian power sector volume of foreign trade – export comprises less than 2% of the total output of power plants of the country, and import – basis points of the total consumption of electricity in Russia. S. Ossetia 0.118 14.249 2.92 Total 6

IPS/UPS – West Europe interconnectors BG HR CZ (I) (II) (III) (X) (XI) (IV-IX) LT BY UA RO SK PL HU YU RU BIH EE LV Blue – 750 kV Red – 400 kV Green – 220 kV

Vyborg Converter Complex – 4x355MW Blue – NORDEL frequency Plus some hydro-units islanded to NORDEL by 110; 154 kV lines. Vyborg Converter Complex – 4x355MW ~ 330 kV Yllikkãlã Kumy Kamenogorskaya Severnaya N-W TPP (CC) 3 x 150 Vostochnaya 400 kV Blue – NORDEL frequency FINLAND RUSSIA Red – UPS frequency RUSSIA – FINLAND ELECTRIC BORDER

Evolution of the system of agreements Electric ring BRELL 9 9

2. Russian electric industry priorities Innovation policy, energy efficiency & energy saving trough the whole chain; Developing the renewable sources; Increasing the share of NPP in the energy mix (in the western part – Leningrad NPP-2, 1-st unit 1200 MW in 2014; Baltic NPP in Kaliningrad region, 2x1200 MW in 2016, 2018); Modernization of existing capacities, implementation of new technologies on the base organic fuels aiming the increase of efficiency and the share of coal; Aggravation of ecological requirements (though in comparison with EU no well-defined quantitative references); Attraction (involvement) of foreign investment (even in NPP, e.g. Baltic NPP); Reinforcement of the main grid 500-750-1150 kV, especially intersystem links between European and Asian parts of UPS, including DC links; Increasing the controllability of UPS - flexible capacities, energy storage devices (PSPP) technologies, “intelligent” control systems.

3. EU-RF interaction (collaboration) benefits Joint operation of Power systems could give big benefits in terms of reliability and optimization taking into account the extensive border between EU and Russia (especially between the two biggest synchronous zones) and the existing huge interface transmission infrastructure: Optimization of generation park; Minimization of generating capacity reserves; Mutual assistance in emergency conditions, extreme whether (esp. for bordering power systems); That mains automatically the integration of EU PS (Baltic IPS); Reduction of needs of internal grid reinforcement etc. Power systems joint operation gives incentives in further collaboration incl. implementation of new technologies and finally decreases the electric sector pressure on the environment.

4. Collaboration barriers Uncertainty with authorities at national and Union’s institutions in decision making process; with the full unbundling of the sector often the distribution of roles is not clear at national level; unilateral firm (unchangeable) decisions (without consultations) affecting the another side (input fee, 3-d energy packet); incompatible (different) approaches to power systems extension: ENTSO-E’s presupposes step by step connection of parts of IPS/UPS with their separation from the synchronous zone (its dismemberment) on the base of ENTSO-E rules; Russian approach – connection of two synchronous zones with further gradual increase of exchanges on the base of agreed rules; limited confidence and transparency (reciprocally).

5. Target situation Full integration of power systems and electricity markets with corresponding coordinating/control institutions. Electricity as universal energy resource in many branches of economy incl. transport will in the considered future more and more replace primary sources (gas, coal, oil) therefore: it should affordable, permanently available (uninterrupted), generated using high efficiency technologies (incl. mix of electricity, heat, cold production), ecologically clean. So it is an international challenge.

6. Concrete proposals-1 1. Ensuring adequate collaboration between SO UPS of Russia (FGC UES) and ENTSO-E and other adjacent TSOs in order: - not to endanger the security of current synchronous function of EU and RF power systems (Baltic IPS and BRELL ring) – elaboration/coordination of common rules regarding calculation of transport capacity, load/frequency control, planning, special protection schemes etc. - in future to mutually exchange information and coordinated taking into account the prospective development of each other, realization of joint projects; special attention merits the Baltic ring where a lot of NPPs is planned including Baltic NPP in Kaliningrad region (2x1150 MW, 2016, 2018), Leningrad NPP-2 (1-st unit 1150 MW in 2014), Lithuanian NPP (up to 3 GW by 2020), Belarus NPP (2x1150 MW by 2018-2020), Polish nuclear program (2020) and new transmission lines Baltics – Kaliningrad – Poland – Germany, reinforcement of Russia – Northern Europe are needed. We appreciate the support of such project on the EU level as crucially necessary.

6. Concrete proposals-2 2. Western-Eastern power systems interconnection. “The completion of the Feasibility Study has opened a new era in the cooperation between Western and Eastern TSOs/companies responsible for a reliable operation of the transmission systems in the interest of the electricity industry and citizens in EU and CIS” (citation from Key conclusions of the “Feasibility Study: Synchronous Interconnection of the Power Systems of IPS/UPS with UCTE”). We should give a decision for coming generations. Otherwise we have neither synchronous nor non-synchronous links between the two biggest European power systems. The IPS/UPS dismemberment is not acceptable because it weaknesses the security of remaining part, incl. power evacuation from NPP (e.g. Kursk near the Ukrainian border). (If such separation becomes unavoidable mutually agreed measures/timing should be undertaken.) Now ENTSO-E is promoting «Study roadmap towards Modular Development Plan on pan-European Electricity Highways System (MoDPEHS). Way to 2050 pan-European power system». It is in parallel discussion with the Energy roadmap 2050 and may be worth to consider it as a potential platform to solve this problem.

6. Concrete proposals-3 3. It is important to mutually exchange views when preparing regulatory decisions in order to possibly improve them and to prevent negative consequences for another side. Also conferences, round-tables etc on new technologies, regulatory economic/market mechanisms are considered helpful (no shortages in that field).

Thank you for attention!