Group generation:

Installed capacity at the end of reporting period, GW

34.336

33.326

3.1%

Electricity generation, billion kWh

68.724

72.278

-4.9%

Utilization of installed capacity

46.5%

49.9%

-

Heat distribution from collectors, million Gcal

23.353

23.641

-1.2%

Russian generation:

Installed capacity at the end of reporting period, GW

28.371

27.361

+3.8%

Electricity generation, billion kWh

61.766

65.128

-5.2%

Utilization of installed capacity

50.6%

54.8%


Heat distribution from collectors, million Gcal

23.203

23.528

-1.4%

Reduced power generation by Russian assets of Inter RAO Group primarily reflects reduced power consumption across the country and optimized utilization of power generation equipment of certain stations during the periods of their negative profitability. Power generation units of several stations, including Nizhnevartovskaya TPP and Karmanovskaya TPP, had scheduled repairs in 2014.

Reduced heat delivery reflects early end of the heating season.

International generation:

Installed capacity at the end of reporting period, GW

5.965

5.965

-

Electricity generation, billion kWh

6.958

7.15

-2.7%

Utilization of installed capacity

26.9%

27.6%

-

Heat distribution from collectors, million Gcal

0.15

0.113

+32.6%

The change in power generation by international subsidiaries of Inter RAO Group reflects several different factors. Low water levels in Georgia reduced the output of Khrami HPP-1 (by 22.2%) and Khrami HPP-2 (by 12.9%). Power generation in Armenia (Hrazdan Energy Company) and Moldova (Moldova TPP) increased by 28.9% and 42.2% following the rulings of regulatory authorities. Ekibastuzskaya TPP-2 reduced power generation by 15.5% due to low demand for power in Kazakhstan. Turkish Trakya Elektrik reduced power generation by 26.8% due to scheduled repairs.

All our international assets increased heat delivery due to cold weather.

Sales in Russia

Consumer base, million

12.45

10.698

+16.4%

Retail electricity sales, billion kWh

80.295

75.507

+6.3%

Share of Russian retail market*

15.5%

14.4%


* Share of Russian retail market is defined as the ratio of retail sales to total actual electricity consumption (518.4 bn kWh in 2014 H1 compared to 523.4 bn kWh in 2013 H1 according to System Operator of the Russian Unified Energy System)

Our Russian retailers demonstrated stronger performance due to geographic expansion of our guaranteeing suppliers, St. Petersburg Energy Sales Company to Omsk Oblast, and JSC INTER RAO - Oryol Energy Sales Company to Oryol Oblast.

Independent retailers increased electricity sales by 4.0% by expanding their customer base.

International distribution companies and grid operators (Georgian Telasi and Electric Networks of Armenia):

Total length of power lines, km

35,840

35,127

+2%

Electricity delivery to the grid, billion kWh

4.126

4.087

+1%

Electricity losses

11.7%

11.9%


Our transmission lines in Georgia became 204 km longer following new grid connections and grid development, and also as the result of grid upgrades. Electric Network of Armenia increased the length its transmission lines by 509 km to connect new consumers. Growing power consumption in Tbilisi resulted in higher output of electricity to the grid.

.

Import and export of electricity by JSC Inter RAO across Russian borders:

Export, million kWh

6,462

9,878

-34.6%

Including:

Azerbaijan

26

27

-6.2%

Belarus

1,020

2,164

-52.9%

Georgia

217

264

-18%

Kazakhstan

839

942

-11%

China

1,676

1,893

-11.5%

Lithuania

1,250

1,977

-36.8%

Mongolia

188

175

+7.4%

Ukraine

22

20

+6.6%

Finland

1,152

2,345

-50.9%

South Ossetia

73

70

+4.2%





Electricity import, million kWh

1,846

2,556

-27.8%

Including:

Azerbaijan

59

60

-0.8%

Belarus

0

2


Georgia

138

255

-45.9%

Kazakhstan

1,615

2,189

-26.2%

Lithuania

20

39

-49.8%

Mongolia

14

10

+35.6%

Finland

0.234



Reduction of exports to nearly all countries is the result of challenging pricing environment in domestic and international electricity markets. Average spot prices in Nord Pool in the first six months of 2014 reduced 14.9% (from €40.99 to €34.86 per MWh) compared to the same period of 2013, while Russian prices stayed high due to growing gas prices.

Change in export volumes to Lithuania reflects grid capacity restrictions for power delivery from Russia set by Baltic system operators in the second half of 2013.

Export to China was adjusted to meet the monthly delivery schedules due to lower power consumption.

Export to and import from Kazakhstan reduced due to lack of economic benefit and fewer fluctuations in concurrent operation of the national energy systems.

* * *

Inter RAO Group is a diversified energy holding serving various segments of Russian and international electric power industry. The Group is the leading exporter and importer of electricity in Russia actively increasing electricity generation and sales, and developing new lines of business. Its corporate strategy is focused on making Inter RAO a global energy enterprise and a key player in the global energy market. Inter RAO Group owns and operates over 34.3 GW of installed power generation capacity. www.interrao.ru


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