RUSHYDROJSC NIIES

March 2010

WWW.RUSHYDRO.RU

2

RusHydro at a Glance

Operating HPPs GeoPPs

Operating HPPs with construction continued Tidal PPs Research and development institutes

HPPs in construction Wind PPs Energy retail companies

Capacity 25,426 MWElectricity production 2009 81,608 GWhAverage multi-year annual production 79,761GWhNumber of generating units 532008 Revenue, USD mln 4,328 2008 EBITDA, USD mln 1,356Market Cap, as of Feb. 2, 2010 USD mln 11,600

Shareholders structure as of 31.12.2009

Government of Russian Federation 60.38%

Minority shareholders 39.62%

incl. ADR and GDR holders 8.08%*

Maximum size of ADR and GDR program 13.9%

WWW.RUSHYDRO.RU

3

Robust Strategy: Safety, Integration and Focused Growth

Focus on safety and reliability

Revised investment

strategy

Enhanced international

presence

New focus on engineering

Improve of technical policyRevised R&M programLong-term contracts with reputable service and equipment providersEstablishing central technical monitoring body

Focus on priority projects Balanced, long-term return-based investment policyImprovement of terms of cooperation with co-investors (incl. RUSAL

and governmental bodies) RES sector development

Strategic partnerships with leaders in retail sector, energy services and engineering (PÖRY, SNC Lavalin i.g.)Strengthening cooperation with leading Russian companies in

international activities, including energy export Proactive participation in international projects

Leveraging existing engineering expertise through establishing integrated engineering company Strategic partnerships with international leaders M&A and JVs where appropriate

WWW.RUSHYDRO.RU

4

0

10000

20000

30000

40000

50000

60000

70000

80000

Siberia and Far-East Central Region Russian South Region(incl. North Caucasus)

RusHydro total

2007 2008 2009

**

Results: Production 2009

  2008, GWh 2009, GWh ∆,%

Siberia and Far East 32,290 32,370 0.2%

Sayano-Shushenskaya HPP 20,764 17,479 -15.8%

Central Region 40,696 41,372 1.7%

Russian South Region (incl. North Caucasus) 7,287 7,863 7.9%

RusHydro Total 80,273 81,608 1.7%

2009 production increase primarily driven by:

Rushydro’s electricity production in 2009 increased by 1.7% despite the accident on Sayano-Shushenskaya HPP

Increased flows into the HPP’s reservoirs during the previous winter; Increased load during floods; Production over the balance by Far East HPPs, in conjunction with electricity exports to China.

WWW.RUSHYDRO.RU

5

RusHydro conducts R & D in micro- and small-scale hydro-power, tidal and wind energy, development of small- capacity boilers and diesel-generators.

Rivers and spillway systems are being surveyed in the context of small-scale HPPs feasibility studies.

Exploitation of the Renewable Energy Sources

Tidal energy

Pilot Tidal HPP Severnaya

Pilot operation of multi-level orthogonal hydro-units as prototype for the prospective project of THPP Mezenskaya in Archangelsk region.

Development, manufacturing and testing of pontoon concrete blocks in conditions of boreal sea.

Innovation in geothermal energy

Construction of new binary power unit at Pauzhetskaya GeoPP

Construction of the new block will:

make more efficient use of thermal agent without costly drilling through utilization of heat from below-grade and spent geothermal water;provide long term reliable, uninterrupted power supply.

WWW.RUSHYDRO.RU

6

Russky Island

Installed capacity, MW 16

Popov island

Installed capacity, MW 20

Far East Wind Farm Russky and Popov Islands – Pilot Project in Wind Generation

Key parameters

Number of wind turbines, units 18

Unit capacity, MW 2

Installed capacity, MW 36Average annual output, no less than, mln kWh 90

Commissioning date Q2 2012

Co-operation memorandum with Japanese partners Mitsui and J-Power had been signed on May 12 in regards to implementation of Far East Wind Farm project.

Landmark pilot project in Wind Generation as source of power supply to APEC Summit.

Goal of the Wind Farm

Summit Zone

General design agent JSC«NIIES»

WWW.RUSHYDRO.RU

7

Renewable energy

International (corresponding IEC,

ISO standards)

International (corresponding IEC,

ISO standards)

IEC 61400-1 Wind turbines. Design Requirements

IEC 61400-12-1: 2005 Wind turbines – Part 12-1: Power performance

measurements of electricity producing wind turbines

IEC 61400-21: 2008 Wind turbines – Part 21: Measurement and assessment of power quality characteristics of grid

connected wind turbines

IEC 61400-1 Wind turbines. Design Requirements

IEC 61400-12-1: 2005 Wind turbines – Part 12-1: Power performance

measurements of electricity producing wind turbines

IEC 61400-21: 2008 Wind turbines – Part 21: Measurement and assessment of power quality characteristics of grid

connected wind turbines

Renewable EnergyRenewable Energy: : StandardizationStandardization

Government (corresponding

GOSTs)

Government (corresponding

GOSTs)

System Standardization for Renewable Energy;Wind Power Plants, Geothermal Power Plants,

Tidal Power Plants

GOST R Wind turbines. Design Requirements . MOD

GOST R Wind turbines. Design Requirements . MOD

Latest Results

•RPP. Creation. Norms, Terms and Requirements •RPP. Operation and Maintenance. Norms and requirements•RPP. Industrial and Staff Safety. Norms and Requirements

Company RusHydro(JSC UES of Russia)

GOST R Wind PPs. Operational & Maintenance Safety

Requirements

GOST R Wind PPs. Operational & Maintenance Safety

RequirementsGOST R Wind PP Constructions.

Base Safety RequirementsGOST R Wind PP Constructions.

Base Safety Requirements

WWW.RUSHYDRO.RU

8

High construction capital costs

High construction capital costs

Renewable EnergyRenewable Energy: : barriers to development in RFbarriers to development in RF

development

development

Investment idea, making decision on RES project implementation

Investment idea, making decision on RES project implementation

Long investment

payback period

Long investment

payback period

Low sector investment potential

Low sector investment potential

b a r r i e r s b a r r i e r s

х

Government support to RESGovernment

support to RES

Inadequate support

regulatory and legal framework

Inadequate support

regulatory and legal framework

Indefinite language of

effective laws

Indefinite language of

effective lawsх

Project implementation

Project implementation

Russian industry’s unpreparedness for large-scale production of RES

equipment

Russian industry’s unpreparedness for large-scale production of RES

equipment

Lack (absence) of technologies

Lack (absence) of technologies

х

a set of measures is requireda set of measures is requiredv

Lack of distinct

signals for the business

Lack of distinct

signals for the business

WWW.RUSHYDRO.RU

9

The current state of the regulatory and legal framework for renewable The current state of the regulatory and legal framework for renewable electricity developmentelectricity development

Objective: to create legal and economic prerequisites for active development of renewable energy and the enhancement of sector investment potential

Objective: to create legal and economic prerequisites for active development of renewable energy and the enhancement of sector investment potential

FL No. 35-FZ on “Electricity” as amended by FL No. 250-FZ of November 4, 2007

FL No. 35-FZ on “Electricity” as amended by FL No. 250-FZ of November 4, 2007

Basic documentsBasic documents

RF President Decree No. 899 of June 4, 2008on “Some Measures for the Enhancement of Energy and Environmental Efficiency of Russian Economy”

RF President Decree No. 899 of June 4, 2008on “Some Measures for the Enhancement of Energy and Environmental Efficiency of Russian Economy”

Renewable energy sources are classifiedMajor measures for the support of RES-based electricity development are

outlinedGovernment bodies’ powers for triggering mechanisms of renewable energy

governmental support are determinedThe situation with non-price and isolated zones and retail markets is unclear

Renewable energy sources are classifiedMajor measures for the support of RES-based electricity development are

outlinedGovernment bodies’ powers for triggering mechanisms of renewable energy

governmental support are determinedThe situation with non-price and isolated zones and retail markets is unclear

Enhancement of economic and environmental efficiency of major economic sectors

Drafting of FLs that stimulate the use of clean technologiesStronger responsibility for noncompliance with admissible environmental impact

standardsProvision of government-financed support for the use of renewable energy

sources and clean technologies

Enhancement of economic and environmental efficiency of major economic sectors

Drafting of FLs that stimulate the use of clean technologiesStronger responsibility for noncompliance with admissible environmental impact

standardsProvision of government-financed support for the use of renewable energy

sources and clean technologies

PP No. 426 on the “Qualification of RES-Based Generating Facilities”

PP No. 426 on the “Qualification of RES-Based Generating Facilities”

Procedure and criteria for qualifying a generating facility as a RES-based generating facility Guidelines for its support with the development of the following regulatory documents (listed below)

Procedure and criteria for qualifying a generating facility as a RES-based generating facility Guidelines for its support with the development of the following regulatory documents (listed below)

WWW.RUSHYDRO.RU

10

The current state of the regulatory and legal framework for renewable The current state of the regulatory and legal framework for renewable electricity developmentelectricity development

Government resolution on “Determining the Guidelines of Government Policy for Enhancing Energy Efficiency of RES-based Electricity for the period up to 2020”

Government resolution on “Determining the Guidelines of Government Policy for Enhancing Energy Efficiency of RES-based Electricity for the period up to 2020”

Government resolution on “The Procedure for Keeping the Register of Issuing and Redemption of Certificates confirming the Volume of Electricity Produced at Qualified RES-Based Generating Facilities”

Government resolution on “The Procedure for Keeping the Register of Issuing and Redemption of Certificates confirming the Volume of Electricity Produced at Qualified RES-Based Generating Facilities”

Government resolution on “The Criteria and Procedure for Granting Government Subsidies from budget to Compensate for the Cost of Technological Connection of RES-Based Generating Facilities”

Government resolution on “The Criteria and Procedure for Granting Government Subsidies from budget to Compensate for the Cost of Technological Connection of RES-Based Generating Facilities”

Government resolution on “The Procedure for Markup Pricing of Electricity Produced at RES-Based Generating Facilities”

Government resolution on “The Procedure for Markup Pricing of Electricity Produced at RES-Based Generating Facilities”

Government resolutions on the introduction of amendments and additions to the current documents (retail markets and wholesale market regulations, pricing principles) designed to facilitate triggering

of the above mentioned mechanisms of RES energy support

Government resolutions on the introduction of amendments and additions to the current documents (retail markets and wholesale market regulations, pricing principles) designed to facilitate triggering

of the above mentioned mechanisms of RES energy support

Establishes markups to be applied for RES-based generation with differentiation according to RES types and validity periods

Establishes markups to be applied for RES-based generation with differentiation according to RES types and validity periods

Establishes the procedure for keeping the Register of issuing and redemption of “green” certificates.

Establishes the procedure for keeping the Register of issuing and redemption of “green” certificates.

Determines the guidelines of government policy in RES, formulates its goals and objectives Establishes quantitative targets for RES development over a long-term period

Determines the guidelines of government policy in RES, formulates its goals and objectives Establishes quantitative targets for RES development over a long-term period

Establishes the criteria and procedure for granting subsidies for technological connection of RES-based facilities Instructs Minenergo to develop the procedure for granting such subsidies

Establishes the criteria and procedure for granting subsidies for technological connection of RES-based facilities Instructs Minenergo to develop the procedure for granting such subsidies

Government resolution on “Government Support for the Implementation of RES Projects”

Government resolution on “Government Support for the Implementation of RES Projects”

Establishes additional measures of government support of RES: compensation for interest on credits and lease payments, and partial insurance costs

Establishes additional measures of government support of RES: compensation for interest on credits and lease payments, and partial insurance costs

A package of subordinate acts to support RES-based energy developedA package of subordinate acts to support RES-based energy developed

WWW.RUSHYDRO.RU

11

Government resolution on “Determining the Guidelines of Government Policy on energy-efficiency and renewable energy sources ”

RES Target indicators adopted in the Resolution:by Y2010 – 1,5%by Y2015 – 2,5%by Y2020 – 4,5%

RES Target indicators adopted in the Resolution:by Y2010 – 1,5%by Y2015 – 2,5%by Y2020 – 4,5%

The signed document contains basic long-term renewable energy policy guidelines as well as numerical targets till 2020.

The whole range of documents allows business community shift its investment interests towards renewable energy sources.

The signed document contains basic long-term renewable energy policy guidelines as well as numerical targets till 2020.

The whole range of documents allows business community shift its investment interests towards renewable energy sources.

The Resolution № 1-р on the Government resolution “Determining the Guidelines of Government Policy for Enhancing Energy Efficiency of RES-

based Electricity for the period up to 2020” was signed by the Prime Minister on January 8th, 2009

The Resolution № 1-р on the Government resolution “Determining the Guidelines of Government Policy for Enhancing Energy Efficiency of RES-

based Electricity for the period up to 2020” was signed by the Prime Minister on January 8th, 2009

WWW.RUSHYDRO.RU

12

The current state of the regulatory and legal framework for renewable The current state of the regulatory and legal framework for renewable electricity developmentelectricity development

A package of draft subordinate acts submitted to the RF Energy MinistryA package of draft subordinate acts submitted to the RF Energy Ministry

Government resolution on “Determining the Guidelines of Government Policy…”

Government resolution on “Determining the Guidelines of Government Policy…”

Government resolution on “The Procedure for Keeping the Register of Issuing and Redemption of Certificates…”

Government resolution on “The Procedure for Keeping the Register of Issuing and Redemption of Certificates…”

Government resolution on “The Criteria of and Procedure for Granting Subsidies from budget to Compensate for the Cost of Technological Connection of RES-Based Generating Facilities”

Government resolution on “The Criteria of and Procedure for Granting Subsidies from budget to Compensate for the Cost of Technological Connection of RES-Based Generating Facilities”

Government resolution on “The Procedure for Introducing a Price Markup for RES-Based Generating Facilities”

Government resolution on “The Procedure for Introducing a Price Markup for RES-Based Generating Facilities”

Overall, adoption of the package of regulatory and legal acts, amended in the course of their approval, solves the problem of providing support to renewable energy projects but reduces the status of basic documents from the governmental level

to the ministerial and departmental levels

Overall, adoption of the package of regulatory and legal acts, amended in the course of their approval, solves the problem of providing support to renewable energy projects but reduces the status of basic documents from the governmental level

to the ministerial and departmental levels

Government resolution on “Measures of Governmental Support for Implementation of RES-based Projects”

Government resolution on “Measures of Governmental Support for Implementation of RES-based Projects”

The document signed by the GovernmentThe document signed by the Government

Document Current state of and amendments to documents

The document was redrafted as an Energy Ministry Order and signed

The document was redrafted as an Energy Ministry Order and signed

The document establishes only the criteria for granting subsidies; Energy Ministry should develop the relevant procedure. The document is discussed in Ministries.

The document establishes only the criteria for granting subsidies; Energy Ministry should develop the relevant procedure. The document is discussed in Ministries.

The document is under review in Energy Ministry. RF Federal Tax Service is charged with markup calculation and introduction.

The document is under review in Energy Ministry. RF Federal Tax Service is charged with markup calculation and introduction.

The documents have been submitted to Energy Ministry and are under consideration .

The documents have been submitted to Energy Ministry and are under consideration . Government resolution on “Governmental resolutions on

Amending the Current RLA ”

Government resolution on “Governmental resolutions on Amending the Current RLA ”

WWW.RUSHYDRO.RU

13

The concept provides for the enhancement of renewable electricity production net of large and medium HPPs (from 8.0 TWh in 2007 to 80 TWh in 2020 and 120-150 TWh in 2030 (6-8% of the total electricity

production), an increase in the installed capacity of RES-based HPPs up to 22 GW by 2020, net of HPPs with an installed capacity of over 25 MW)

The concept provides for the enhancement of renewable electricity production net of large and medium HPPs (from 8.0 TWh in 2007 to 80 TWh in 2020 and 120-150 TWh in 2030 (6-8% of the total electricity

production), an increase in the installed capacity of RES-based HPPs up to 22 GW by 2020, net of HPPs with an installed capacity of over 25 MW)

Renewable energy development in Russia – a national Renewable energy development in Russia – a national prioritypriority

Target/year 2005 2010 2015 2020 2025 2030

Renewable energy, TWh 7.0 17.8 36.7 80 150 280

Renewable energy share under scenario 1, % 0.73 1.56 2.64 4.71 7.46 12.17

Renewable energy share under scenario 2, % 0.73 1.56 2.57 4.5 6.98 11.2

Renewable energy development targets are laid down in the draft Energy Strategy of Russia up to 2030

Renewable energy development targets are laid down in the draft Energy Strategy of Russia up to 2030

Renewable energy development targets are laid down in the Concept of Long-Term

Socioeconomic Development of the Russian Federation up to 2020,

approved by RF Government resolution No. 1662-4 of November 17, 2008

Renewable energy development targets are laid down in the Concept of Long-Term

Socioeconomic Development of the Russian Federation up to 2020,

approved by RF Government resolution No. 1662-4 of November 17, 2008

WWW.RUSHYDRO.RU

14

Renewable energy developmentRenewable energy development: : legal framework development outcomeslegal framework development outcomes

Final adoption of the package of regulatory and legal acts provided for under effective law

Final adoption of the package of regulatory and legal acts provided for under effective law

Further improvement of energy-saving and renewable energy laws: drawing up a federal law on RES development support, drawing up of draft federal laws on Heat Supply

Further improvement of energy-saving and renewable energy laws: drawing up a federal law on RES development support, drawing up of draft federal laws on Heat Supply

Stimulation of domestic R&D work, support for technology transfer, localization of production of RES equipment in RF

Stimulation of domestic R&D work, support for technology transfer, localization of production of RES equipment in RF

Exploration and protection of RES potentials and resources (geothermal fields, river flow and dam sites, other RES sites)

Exploration and protection of RES potentials and resources (geothermal fields, river flow and dam sites, other RES sites)

Government support for individual RES-based projects (especially in isolated service areas)

Government support for individual RES-based projects (especially in isolated service areas)

Training of qualified personnel Training of qualified personnel

The main step to RES development is establishment of RES development priority on the national level

The main step to RES development is establishment of RES development priority on the national level

Renewable energy and energy-saving promotion as a wholeRenewable energy and energy-saving promotion as a whole

WWW.RUSHYDRO.RU

15

Thank you for your attention!

Renewable Energy Department&

JSC NIIES