1. Strategic Development of Power Generation in the Context of “Energy Strategy for the Year 2030” Chisinau - September 2010 Al. Gribincea PhD World economy, International economic relations

2. Energy Strategy 2030 in the System of Documents of the Strategic Development Program of long-term development of the fuel and energy complex of the Russian Far East Conception of the long- term development of the Russian Federation for the year 2020 Strategy of development of the power generation in the Russian Far East Long-term forecast of the development of Russian economy for the years 2009-2030 Eastern Gas Program General scheme of allocation of power generating facilities for the year 2020 General scheme of development of the oil industry for the year 2030 General scheme of development of the gas industry for the year 2030 Conception of the state program for exploration and exploitation of the continental shelf of the Russian Federation ES-2030 State program of energy saving Investment programs of energy companies

3. Aim and Goals of the ES-2030 Efficiency of reproduction, extraction and processing of energy resources Modernization and construction of new energy infrastructure Energy and ecological efficiency of the national economy and energy sector Stable institutional environment in the energy sector Further integration of the Russian energy sector into the global energy system Aim Goals Innovative and efficient energy development Aim of the ES-2030 remains stable despite consequences of the global economic crisis

4. Energy Saving as Priority Direction of State Energy Policy Saving of 240 bln. cub. m of natural gas, 340 bln. kilowatt-hour of electric power, 90 mln t of coal and 45 mln t of oil and oil products 1 2 3 4 5 Expected results of energy saving and increase in energy efficiency in Russia Improvement in competitiveness of national economy under conditions of growing tariffs for energy resources Increase in revenues from extra export of oil and natural gas: 84-112 bln. USD Decrease in governmental expanses: 3-5 bln. USD Reduction in CO 2 –emissions: 790 mln t/y Improvement in ecological situation in the country Consumption of energy resources can be reduced by: 20% in heat supply 30% in power generation 40% in industry and transportation 50% in living apartments Potential of energy saving in Russia is estimated at level of 45% of the current consumption of energy resources

5. years Basic Forecasted Characteristics of the ES-2030 (Electricity Production and Consumption)

6. Power Generation Completion of the structural reform of the Russian power generation Shift of electric power consumption into Eastern regions of Russia and cities of the Central part of the country Increase in seasonal and daily peak loads in the UES of Russia Creation of the wholesale competitive market of electric power and capacity Deficit of generative and circuit capacities in some regions Lack of peak and semi-peak capacities High runout of basic production assets Low energy and economic efficiency of power generation High dependency on natural gas Absence of retail market of electric power and capacity Tendencies Lack of investment resources Cross-funding between different groups of consumers and between electric power and heat in domestic market Problems Results of ES-2020

7. Energy security of the country Balanced development of generative and circuit capacities Modernization of the basic production assets Development of environmental friendly technologies of coal burning, steam-to-gas plants with high coefficient of efficiency, power circuits of new generation, etc. Development of “small power generation” in regions with decentralized power supply Development of Power Generation Complete satisfaction of country’s needs in energy (capacity) at reasonable prices Safe and secure work of power supply system under normal conditions and in case of emergency Further development and enlargement of the UES of Russia Containment of prices by means of reduction of costs in construction of generative and circuit capacities, encouragement of competition and creation of state system supervising power generation Accelerated development of nuclear, coal power generation and renewable energy; diversification of the fuel and energy balance of the country Innovative renovation Development of competitive markets of electric energy and capacity Reliability and controllability of power supply systems Reduction of negative environmental impact of power generation Strategic aims Principles and mechanisms of realization

8. Power Generation and Consumption Prospective levels of power generation will be determined by growth of domestic demand, which will substantially exceed the growth rate of demand for primary energy Power generationPower consumption and export

9. Power Consumption and Specific Electro-capacity of GDP  By 2030 power consumption will increase 1,9-2,3 fold, compared with the level of 2005, while specific electro-capacity of GDP will decrease 1,6-1,7 fold.

10. Installed Capacity of Power Plants By 2030 total installed capacity of Russian power plans will increase 1.6-2 fold, compared to 2005 level (mostly due to condensate plants)

11. Investment in Power Generation Power generation demands 572-888 bln USD investment for the year 2030. Share of the industry in total investment in Russian FEC equals 24-32%

12. Long-term State Tariff Policy Expansion of market principles of pricing and mechanisms of self-regulation Improvement in quality of life of the Russian population and competitiveness of Russian industry Investment attractiveness of projects in power generation and transmission Basic Principles Predictability and transparency of long-term state tariff policy and its coordination with other components of the state energy policy Till 2030 average selling price for electric power (at 2007 constant prices) won’t increase more than 2-fold and won’t exceed 9-10 US cent/kW

13. Stages of Realization 1 st Stage  Modernization of gas-fired power plants  Decommissioning of old-fashioned and depreciated equipment  Creation of legal frameworks for attraction of investment in power generation  Realization of state program for construction of nuclear and hydro power plants  Creation of domestic competitive market of electric power and capacity  Development of public assistance in supplying electric power at social norms 2 nd Stage 3 rd Stage  Large-scale renovation of basic production assets  Development of power circuits and proper infrastructure in the Eastern Siberia and Far East  Putting into operation new nuclear power plants  Development of renewable energy  Active development of non-hydrocarbon power generation (nuclear, renewable, etc.)  Technological improvements in coal-fired power generation  Construction of major hydroelectric power stations in Eastern parts of Russia  Development of “small nuclear power generation” in the Russian North and Far East  Development of modular high-temperature nuclear reactors, able to produce electric power, heat and hydrogen

14. Development of Non-fuel Energy Priority development: Nuclear Hydro Renewable POWER GENERATION Putting into operation installed capacity of 23-33 GWt will increase the share of renewable energy in power generation from 0,5 to 4,5% Forecasted development of renewable power generation

15. State Policy in the Sphere of Renewable Energy and Local Power Supply Support of utilization of local power supply in remote regions Support of small service enterprises, operating in the sphere of renewable energy Informational support Technical and technological control of security of renewable energy Support of utilization of industrial and communal waste for the purpose of power generation Sate support of Russian industry and science supplying power generation on the basis of renewable energy with equipment and technologies Attraction of investment, creation of special venture funds

16. Indicators20081 st Stage2 nd Stage3 rd Stage Power generation Share of non-fuel power supply, %32,5no more than 34no more than 35no more than 38 Fuel supply of thermoelectric power plants Share of gas, %70,370-7165-6660-62 Share of coal, %2625-2629-3034-36 Energy security and reliability of power supply Probability of non-deficit functioning of energy systems 0,9960,99900,99910,9997 Efficiency of power generation Coefficient of efficiency of coal-fired power plants, % 34no less than 35no less than 38no less than 41 Coefficient of efficiency of gas-fired power plants,% 38no less than 45no less than 50no less than 53 Coefficient of efficiency of nuclear power plants,% 32no less than 32no less than 34no less than 36 Specific fuel consumption for power generation at heat and power plants, g c.e./kWt-h (by the level of 2005) 333 (99%) no more than 315 (94%) no more than 300 (90%) no more than 270 (81%) Loss in power circuits, % 13no more than 12no more than 10no more than 8 Strategic Indicators of Development

17. Heat Supply Power consumption for transportation of heat carrier increased substantially (up to 40 kWt- h/hcal) Lack of investment and necessity to restrain the growth of tariffs Organizational disconnection of objects and systems of heat supply Urgent necessity of institutional reform in the system of heat supply Extension of heat distribution network decreased by 5% (more than 10 000 km) Coefficient of utilization of installed heat capacity of power plants decreased to the level below 50% Runout of basic production assets increased up to 65-70% Loss rate in heat distribution increased from 14% to 20% Lack of reliability of heat supplying systems High loss rate High negative impact on environment Problems Results of ES-2020

18. High level of comfort in residential and industrial buildings, increase in quality of service of heat supply, provided at reasonable prices Priority development of cogeneration-based heat supply Optimization of regimes of thermoelectric plants Utilization of geothermal energy Decrease of unproductive loss of heat and fuel consumption Development of heat supply on the basis of steam- turbine, gas-turbine, gas-piston and diesel plants in the sphere of middle and small heat load Rational combination of system and elemental reservation, transition to independent scheme of connection to heat supply and closed system of hot water supply Optimal combination of centralized and decentralized heat supply Controllability, reliability, security and economy of heat supply Decrease of negative impact on environment Combined operation of different sources of heat for a common heat transporting network and optimization of their functioning Creation of legal framework, guaranteeing effective interaction between producers, distributors and consumers of heat Modernization of heat supply systems on the basis of innovative high-efficient technologies and equipment Heat Supply Strategic aims Principles and mechanisms of realization

19. Technological Structure of Heat Supply  Main growth will be provided by power plants  Share of geothermal, solar and biomass sources of heat will be increased  Share of boiler-houses by 2030 will be decreased

20. Heat Consumption and Loss  Loss of heat will decrease 2-3 fold (equivalent to economy of fuel of no less than 40 mln t c.e.)

21. Investment in Heat Supply Heat supply demands 150-153 bln USD investment for the year 2030. Share of the industry in total investment in Russian FEC equals 5-6%

22.  Optimization of centralized and decentralized systems of heat supply  Modernization of basic productive assets and transport network  Equipping of heat consumers with systems of control and regulation  Attraction of private investment  Optimization of tariffs (transition to two-part tariff)  Increase in energy efficiency of buildings  Large-scale modernization of basic productive assets and transport network  Rapid development of decentralized heat supply and heat supply on the basis of renewable energy  Creation of market of heat  Further increase in energy efficiency of heat supply  High level of comfort in residential and industrial buildings  Utilization of non-fuel sources of heat  Spread of high-tech automatic systems of heat supply Stages of Realization 1 st Stage 2 nd Stage 3 rd Stage

23. Indicators20081 st Stage2 nd Stage3 rd Stage Energy security and reliability of heat supply Failure rate, 1 /year0,27no more than 0,25no more than 0,20no more than 0,15 Failure rate because of source of heat, 1 /(source-year) 0,06no more than 0,05no more than 0,03no more than 0,01 Renewal of heat network, % of total extension 2no less than 10no less than 40no less than 90 Innovative development of heat supply Share of systems, equipped with modern tools of exploitation, % 10no less than 40no less than 80100 Efficiency of heat supply Coefficient of effective use of heating power at heat and power plant, % of the 2005 level 5no less than 15no less than 40no less than 50 Mean specific fuel consumption, % of the 2005 level 99no more than 98no more than 94no more than 90 Increase in energy efficiency of buildings, % to the 2005 level 5no less than 10no less than 30no less than 50 Heat loss, % of heat production19no more than 16no more than 13no more than 8-10 Strategic Indicators of Development

24. Thank you for your attention! Cordialement Al.Gribincea