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RusHydro Group Announces Preliminary Production Figures for H1 2010

RusHydro (ticker symbol: HYDR; MICEX, RTS and LSE) announces today its preliminary production results for H1 2010. During reporting period, the hydro power plants of JSC RusHydro, its subsidiaries and dependent companies (SDC) generated a total of 37,554.4 million kWh — 18% less, than for same period of the preceding year.


An accident at the Sayano-Shushenskaya HPP on 17 August 2009 was the main contributing factor to a decrease in its power generation in H1 2010. Currently two restored hydro units are working under load at Sayano-Shushenskaya HPP, and two more units will be put into operation this year.


Excluding the Sayano-Shushenskaya HPP, the total production of the Company’s HPPs and its SDCs increased by 1% over H1 2009.


JSC RusHydro’s facilities are located in territories with different water inflow regimes.


The rivers of the Far East and Siberia are affected both by spring flooding — the volume of which is determined by the total snow accumulation and its melting pattern — and flooding caused by extended summer rainfall, which, in terms of volume, is comparable to spring flooding.


In H1 2010, a favorable hydrological environment formed in Siberia. During winter and spring, the water inflow to the Sayano-Shushenskaya HPP and Novosibirskaya HPP reservoirs significantly exceeded long-term, average annual volumes. Such inflow was responsible for the increase in generation at the Novosibirskaya HPP.


The favorable hydrological environment in the Far East coincided with the increased water volumes in the reservoirs that had accumulated by the end of 2009.


The Federal Agency for Water Resources (Rosvodresursy) and the System Operator increased the workload of the Zeyskaya HPP and Bureyskaya HPP reservoirs to provide the extra capacity required to absorb the seasonal water surge during the spring and summer. The extra generation is attributable to increased supply to China and the decreased generation by the thermal power plants due to safety consideration regarding the hydro facilities.


As a result, production by JSC RusHydro and its SDCs in the Far East and Siberia regions, excluding the Sayano-Shushenskaya HPP, increased by 19% in H1 2010. Total generation in these regions amounted to 11,986.0 mln kWh.


The rivers of the central region of the European part of Russia are characterized by high spring water levels and a long period of low water, during which the water reserves that have accumulated during the high water period are used.In favorable conditions short-term flooding due to rain may occur.


An unfavorable hydrological environment formed in the European part of Russia, during the H1 2010. Winter inflows lower than those of 2009 did not create generation volume greater than that of 2009. The forecast of the Federal Service for Hydrometeorology and Environmental Monitoring (Roshydromet), which called for heavy snow accumulation by the end of winter, was not justified. Consequently, the HPPs worked to fill the Kuibyshev reservoir (accounting for their low generation), to provide the water-reserve volume required to supply the Lower Volga.* Due to a lack of rainfall, values significantly lower than the annual averages viewed over the long-term characterized the water flows of the Kama River and Lower Volga. This led to decreased output at the Kamskaya, Votkinskaya, Zhigulevskaya, Saratovskaya and Volzhskaya HPPs.


At the end of the abnormally low-volume seasonal flooding period, the Kuibyshev reservoir was not filled, which creates the risk of decreased output from the Lower Volga HPPs in 2H 2010.


The favorable hydrological environment (due to rainfall) that formed in the Upper Volga region resulted in increased generation from the Nizhegorodskaya and Cheboksarskaya HPPs.


Ultimately, the JSC RusHydro’s facilities located in the central regions of the European part of Russia generated 20,890.3 mln kWh in H1 2010 — 8% less than during the same period of the preceding year.


The North Caucasus rivers are filled mainly due to glacial melting and a period of torrential rains. Such diversity compensates for unfavorable hydrological conditions that may form in various zones.


Increased inflow relative to annual averages when viewed over the long-term, which led to a 32% generation-increase to 4,678.2 million kWh, characterized the hydrological environment in the North Caucasus and southern Russia during H1 2010.





* - Operation of the Volga-Kama hydro cascade during Q2 2010 was primarily determined according to the need for special discharges to support the fishing and agriculture industries in the Lower Volga. The Federal Agency for Water Resources (Rosvodresursy) determines the volume of water to be discharged through hydropower plants (including idle discharges) for those periods when water levels in the region need to be raised.


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