Markets served [102-6]

Position in the industry

The Russian electricity and capacity market is comprised of the wholesale electricity and capacity market and the retail electricity market (REM), with RusHydro operating in the wholesale electricity and capacity market.

The wholesale market is a place where a special type of commodities – electricity and capacity – are traded within the Unified Energy System across Russia’s economic space. Capacity as a commodity is an obligation to properly maintain power generating facilities in order to timely meet the consumer demand for electric power. The retail market trades in only one commodity – electric power.

With acquisition of a number of electricity retailers and the companies of RAO ES East, RusHydro Group has significantly increased its visibility in the retail electricity and heat markets of Russia. The Group also owns distribution grids in the Far East, the Luchegorsky coal strip mine, construction and repair companies, and design institutes, which makes it one of Russia’s largest energy infrastructure holdings.

RusHydro’s key competitive advantages include:

  • HPP/PSPP-based power generation does not require fuel and is therefore not susceptible to fluctuations in fossil fuel prices (natural gas, oil, coal, and other). Moreover, it remains highly profitable as pricing in the electricity and capacity markets reflects the cost of heat generation, which includes fuel expenses.
  • HPPs can adjust output in response to changing demand for power supply, which provides them with guaranteed load during the times of peak demand when electricity price is the highest.
  • Low production cost of power generated by HPPs is the main reason why extra hydropower supplies and capacities are fully consumed within the unified energy systems.
  • As a renewable resource, hydropower ranks among the most environmentally friendly sources of energy. Its use helps reduce emissions from thermal power plants and save hydrocarbons for future generations. Hydropower produced at RusHydro’s HPPs annually saves the planet 50 mt of СО2 emissions;
  • To bring electricity tariffs in the Far East in line with the Russian base (average) rate, a surcharge was added to the capacity price in the first and second price zones of the WECM. RusHydro has been designated by the Russian Government to collect and transfer the surcharge amount to the Far East. This measure has helped reduce the accounts receivable from current consumers in the Far Eastern Federal District and attract investments in the region’s energy-intensive industrial projects to help create potential effective demand for electricity.

With the generating assets of the Group boasting a total installed hydropower capacity of 31 GW, RusHydro ranks among the world’s top hydropower generating companies.

RusHydro’s share in Russia’s electric power market Excluding International Energy Corporation.
Year Electricity Capacity
Output in Russia Output by RusHydro Share Total installed capacity, Russia Total installed capacity, RusHydro Share
mn kWh mn kWh % MW MW %
2016 1,071,800 138,405 12.91 244,100 38,309 15.69
2017 1,073,700 139,820 13.02 246,868 38,479 15.59
2018 1,091,700 143,853 13.18 250,400 38,803 15.50
The world’s largest hydropower generating companies, GW

Competitive landscape

RusHydro Group is one of Russia’s leading electric power producers, with Rosatom State Corporation and the independent energy companies emerging from the restructuring of RAO UES of Russia acting as its main competitors.

RusHydro’s competitors in Russia, GW