23.07.2012
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RusHydro increases electricity generation from hydro by 2.8% in the 1st half of 2012

JSC RusHydro (ticker symbol: MICEX-RTS, LSE: HYDR; OTCQX: RSHYY) announces the operating results for the 2nd quarter and the 1st half of 2012.


The total electricity generation by power plants of RusHydro and its subsidiaries amounted to 57,377 GWh, a 4.4% increase as compared to 2011. The hydropower plants of RusHydro increased electricity generation by 2.8% to 40,351 GWh. In the 2nd quarter 2012, the total electricity generation increased by 3% to 28,702 GWh.

 

Electricity generation in 1H 2011/2012, GWh

 


2Q 2012


2Q2011

chg, %

1H 2012

1H 2011

chg, %

Far East

3,037

3,065

-0.9

6,314

6,414

-1.6

Siberia

5,357

5,531

-3.2

10,965

10,726

2.2

 incl. Sayano-Shushenkaya HPP

4,993

4,782

4.4

10,401

9,712

7.1

Center of Russia

11,991

11,437

4.8

19,616

18,704

4.9

South of Russia and North Caucasus

2,066

1,988

3.9

3,120

3,030

3

Armenia

283

315

-10.3

337

388

-13.1

RAO ES of the East

6,836

6,366

7,4%

17,025

15,702

8.4

TOTAL

29,569

28,702

3

57,377

54,965

4.4

TOTAL (excl. RAO ES of the East)

22,733

22,336

1.8

40,351

39,262

2.8


The underlying factors of the growth in production are:

-    launch of a fifth 640 MW brand new hydro-unit at Sayano-Shushenskaya in December 2011;

-    normal water inflow to major reservoirs of Volga-Kama cascade;

-    rigorous policy of water levels optimization;

-    10.8% increase in generation volumes by Far East Generation Company in 1H 2012 vs 1H 2011, the largest asset of the RAO ES of the East holding, due to growth in electricity consumption of transportation infrastructure.


Center of Russia

In recent years, reservoirs of hydropower plants in the Volga-Kama cascade experience higher than average inflows of water. In the 1st quarter 2012, the water inflow was 18% higher than long-run average. As of the 1st quarter water resources in the cascade's reservoirs were 17% lower than long-run average. In order to preserve water resources hydropower plants of the lower Volga operated with decreased water discharges. In March, the discharges were the lowest for all the years of operation.


As of the end of the 1st quarter, the snow packs in basin of the cascade were 109% of long-run average. Given the low frost penetration of soils and expected low water inflows, the water inflow in the 2nd quarter was initially expected to be 15% lower than long-run average. However, as a result of favorable development of spring flood and its late termination due to summer rains the water losses were minimal. The water inflow in the 2nd quarter was close to long-run average and amounted to 158 km3 (the average is 161 km3). The reservoir levels were at their highest for the last 20 years.


The total electricity generation by hydropower plants of Volga-Kama cascade in the 1st half of 2012 was 18,704 GWh, a 4.9% increase as compared to 2011; the generation volumes in the 2nd quarter were up 4.8% year-on-year.

According to the forecast of the Hydrometeorologic Center of Russia, the water inflow to the major reservoirs of Volga-Kama cascade is expected close or somewhat higher than long-run average.


Siberia

The water inflow to Sayano-Shushenskoe reservoir in the 1st quarter 2012 was 10% higher than long-run average. In the 2nd quarter, the water inflow was 20% lower than long-run average.


The reservoir of Novosibirskaya hydropower plant has been experiencing extremely low water inflow during the whole 1st half of the year: in the 1st quarter - 25% lower than long-run average, in the 2nd quarter - lower by a factor of 2. The Novosibirskaya hydropower plant has been operating with minimal water discharges to allow for navigation. By the end of the 2nd quarter the reservoir was almost full.


In late April, the Boguchanskaya hydropower plant, a joint project by RusHydro and UC RISAL, started to replenish its reservoir. In late May, the dam started water discharges to allow for navigation, which slowed the process of reservoir replenishment. As at July 20, the reservoir level was 169.18 m. As soon as the reservoir level reaches 179 m the plant will start pre-launch tests of first hydro-units. The hydropower plant will then launch its first hydro-units after the reservoir level exceeds 185 m.


Against the backdrop of low water inflow in Siberia, the total electricity generation by RusHydro's hydropower plants in the 2nd quarter of 2012 decreased by 3.2% to 5,357 GWh. In the 1st half of the year, the electricity generation increased by 2.2% to 10,965 GWh.


In the 3rd quarter, the water inflow to Sayano-Shushenskoe and Novosibirskoe reservoirs is expected lower than normal.


South of Russia and North Caucasus

Due to deficit of capacity in energy system of the North Caucasus and low water inflow in the 2nd half of 2011, the water reserves in major reservoirs of the South of Russia and North Caucasus were low. The spring flood started earlier than usually. The water inflow in the 2nd quarter was close to long-run average.


The electricity generation in the 2nd quarter rose by 3.9% to 2,066 GWh; in the 1st half of the year it increased by 3% to 3,120 GWh.


The water inflow in the 3rd quarter is expected at long-run average levels.


Far East

Zeyskaya and Bureyskaya hydropower plants due to low water inflows in 2011 and ensuing low reservoir levels (24% lower than long-run average) have been operating under the regime of reservoir drawdown. By the end of the 1st quarter the water levels of Zeyskaya and Bureyskaya was 2.3 m and 1.9 m, respectively, lower than last year.


The spring flood started earlier than usually. The water inflow to Zeyskoe reservoir in the 2nd quarter exceeded the long-run average by 10%. By the end of the quarter the situation with water reserves in the reservoir has improved. As at the end of the 2nd quarter the level of Zeyskoe reservoir exceeded that of the last year, the level of Bureyskoe reservoir was close to last year's.


The electricity generation by RusHydro's hydropower and geothermal plants in the Far East in the 2nd quarter decreased by 0.9% to 3,037 GWh; in the 1st half of the year the production decreased by 1.6% to 6,314 GWh.

The water inflow to reservoirs in the Far East in the 3rd quarter is expected close to long-run average.


The generating assets of RAO ES of the East holding, a subsidiary of RusHydro, in the 1st half of 2012 generated 17,025 GWh of electricity, an 8.4% increase as compared to the 1st half of 2011. In the 2nd quarter, the generation rose by 7.4% to 6,836 GWh.


Of this total, 12,555 GWh, or 74%, was generated by Far East Generating Company, which boosted production by 10.8% as compared to last year. The generation by companies operating in isolated energy systems of the Far East in the 1st half of 2012 remained flat year-on-year.


The major reasons for increase in generation by thermal power plants of the Far East Generating Company were:

-    increase in electricity consumption in the unified energy system of the Far East by 3.8% in the 1st half of 2012 as compared to last year;

-    increase of electricity export to Chine by 57% year-on-year as a result of commissioning of high-voltage electricity line from Zeyskaya hydropower plant to the border with China;

-    decrease in electricity generation by Zeyskaya hydropower plant in the 1st half of the year.

In January-June 2012, heat output by thermal plants of RAO ES of the East rose 4.7% to 19,054 thousand GCal.


Armenia

Electricity generation by Sevan-Hrazdan cascade power plants was 331 GWh, a 13% decrease compared to 2011. The power generation of these power plants is dependent on water inflows of Hrazdan river and water releases from lake Sevan.


***


Taking into account the half-yearly results and current hydrometeorologic situation, RusHydro expects an increase in electricity output from hydro by 1-1.5% in the full year of 2012 as compared to 2011. The company plans to renew its forecast following the operating results of the 3rd quarter.


RAO ES of the East expects that its total electricity generation in 2012 will increase at least 3.5% compared to 2011. However, if the trends of high consumption growth resume into the 2nd half of the year, this forecast will be exceeded.







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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