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Russia's electric power monopoly, RAO UES Rossii, intends to export more electricity to China
According to the proposed agreement, the company would be able to earn $2 billion a year from the new project. However, the effort would require a $7-15 billion investment. Alexander Kozlovsky, head of the Far Eastern division of Inter RAO UES, said an agreement with China's state electric grid corporation would stipulate an increase in electricity exports to 20 billion kWt/hr, and up to 50 billion kWt/hr in the future. However, new electric power stations and electric grids will be needed in order to meet China's requirements for at least 30 billion kWt/hr a year, RAO UES representative Marita Nagoga said. In the coming months, the electric power monopoly will prepare its first feasibility studies, she said. In particular, the company will have to decide whether the electricity will be supplied from Siberia or the Far East. In the initial stages, idle capacities and electric power stations under construction, in particular, the Bureya electric power station, are expected to be used to expand electricity exports, Anatoly Yanovsky, head of the fuel and energy department of the Ministry of Industry and Energy, said. The cost of electricity in China will be a benchmark for the electric power monopoly, head of the Russian-Chinese Center for Trade and Economic Cooperation Sergei Sanakoyev said. Electricity costs 4-6 cents per kW in China. Consequently, RAO UES will be able to get $0.8-$1.2 billion a year for 20 billion kW/hr and about $2 billion for 50 billion kW/hr, Antanta Kapital analyst Denis Matafonov said. However, the Russian electric power monopoly will also have to invest a large amount of money. It will have to build electric power stations with a capacity of several thousand megawatts. RAO UES will need to spend $2-$5 billion to supply 20-30 billion kW/hr a year, vice president of Trust investment bank Andrei Zubkov said. According to his estimate, another $1.5-$2 billion will be required to build electric power grids. General director of Integrated Energy Systems Mikhail Slobodin estimated the expenses for the delivery of 50 billion kW/hr to China to be $10-$15 billion. Today RAO UES exports electricity to China within the framework of border trade, Nagoga said. The Heihe province received 338.48 million kW/hr of electricity from Russia in 2004 and is expected to receive 500-550 million kW/hr in 2005. RAO UES Rossii can increase electricity supplies under this contract to 5 billion kW/hr by 2009-2010.
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