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RusHydro’s hydropower plants increased utilization during spring flood as System Operator tested new dispatching rules

JSC RusHydro (ticker symbol: MICEX-RTS, LSE: HYDR; OTCQX: RSHYY) announces that System Operator of the Unified Energy System developed and implemented a number of measures that enabled hydropower plants to increase the utilization of water resources during spring flood. From April 16 to June 11, for the first time in its history, the System Operator engaged primarily conventional thermal power plants in automatic secondary regulation of frequency and active power flow instead of large storage-based hydropower stations.

Prior to this, frequency regulation was implemented by hydropower plants due to their high maneuverability, i.e. ability to promptly increase or decrease generation, providing necessary capacity to the power system. As a result, part of hydropower capacity was always in reserve for ad hoc frequency regulation, which leads to underutilization of water resources. Due to these restrictions, hydropower plants are usually forced to discharge excess water instead of generating electricity.

Introduction of system services market enabled conventional thermal power plants to take part regulation of frequency and active power flow. In late 2012, following a competitive bidding, the System Operator selected 26 fossil-fuel power units for services of automatic secondary regulation of frequency and active power flow. Among the selected capacity: Permskaya, Iriklinskaya and Karamanovskaya thermal power plants, Zainskaya thermal power plant (JSC Generation Company, Tatarstan), Surgutskaya-1 and Stavropolskaya thermal power plants. A total of ±407 MW of capacity was reserved for the secondary frequency regulation.

“The measures implemented by the System Operator, in particular, enabled Zhigulevskaya hydropower plant to operate almost at full load and increase the electricity output by more than 150 GWh compared to the same period of 2012”, commented Stanislav Savin, member of the Management Board of RusHydro.

According to Fedor Opadchy, Deputy Chairman of System Operator’s Management Board, “Involvement of thermal power units in automatic secondary frequency regulation in the framework of system services market allowed to free up capacity of hydropower plants, normally reserved for this purpose. This has allowed hydropower plants in the first price zone to operate in base load regime, resulting in an estimated 300 GWh increase in generation. The measures allowed to optimize the utilization of hydro resources and led to savings of conventional fossil fuel. Efficient utilization of hydropower during flood periods not only makes economic sense, but also mitigates a number of technical and environmental problems, arising from affluent floods”.

Technical standards provide that automatic variations of power unit capacity cannot exceed 5% from its nominal capacity. Testing of four thermal generation units during pilot project, conducted in 2011-2012 (in these tests each thermal unit involved have been working in automatic frequency regulation during more than 10,000 hours) demonstrated that operation in this regime doesn’t cause any technical problems. Continuous monitoring of equipment and is a necessary prerequisite for safe operation in automatic frequency regulation regime.

Thermal power companies’ involvement in automated frequency regulation regime is voluntary. The contracts for these services allow power plants to withdraw units from frequency regulation regime at any time without any financial penalties.

The information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of RusHydro. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might," the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially from these statements. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to RusHydro and its operations.
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