Inter RAO YEES : Based on preliminary results of modernization project selection for the 2022-2024 period, Inter RAO Group has selected 5.1 GW worth of capacity (60% of the quota)

4 April 2019

The Russian System Operator has published a preliminary list of cogeneration modernization projects for the 2022-2024 period in which Inter RAO Group's projects amount to 5,130 MW (60% of the established quota): 4,416 MW in the First Price Zone (64% of the zone quota) and 714 in the Second Price Zone (41% of the quota). The selected 5.1 GW worth of assets (17% of total Russian installed capacity) allow the Group to significantly upgrade the country's thermal power station equipment, including comprehensive replacements and increasing power supply reliability and operational efficiency. The potential for reducing fuel consumption amounts to 5-15 reference units/kWh, depending on the project.

According to the preliminary results, the following stations were chosen for the year 2022 capacity modernization: Kostromskaya TPP units 4 and 8; Gusinoozerskaya TPP units 1 and 3; Omsk CHP-4 unit 7.

For 2023: Permskaya TPP unit 1; Kostromskaya TPP units 2 and 7; Karmanovskaya TPP unit 3; Iriklinskaya TPP unit 4 and Nizhnevartovskaya TPP unit 1.

For 2024: Nizhnevartovskaya TPP unit 2 and Gusinoozerskaya TPP unit 2.

'We are satisfied with the preliminary project selection results for the 2022-2024 period. During the selection of the first 9.35 GWs of capacity, submitted applications actually amounted to almost 22 GW, which more than doubled the quota of the first selection. This indicates a very high demand and relevance of the market mechanism for cogeneration capacity modernization. Under these highly competetive conditions for the modernization projects, Inter RAO Group accumulated 60% of the total quota', said Boris Kovalchuk, Chairman of the Management Board, Inter RAO. 'As a result the average incremental cost of the selected modernization projects is several times lower than alternative energy supply methods, which once again proves that the state has chosen a trustworthy method for developing the energy industry, guaranteeing reliable supply of energy for future consumers'.

Reference: The project selection mechanism for the cogeneration modernization projects (Russian: KOMMod) was approved with a Goverment Decree 43 from January 25, 2019. Selection works on a competetive basis within established quotas. For the next 16 years, the selected projects will receive a payment based on the declared capacity parameters, including return of capital investments with 14 % yield basis, operating expenses and profit accounting from the wholesale market electricity sales.