The wholesale hydroelectric generation company created with some 20 GW of capacity culled from Russian energy giant UES is expecting to earn just 13 billion rubles or less than $500 million in its first year, despite being one of the world’s largest generation companies. However, the company can expect to generate more revenue once Russia’s electricity market is reformed as it will be providing system-related services. In addition, the company will have a role to play in price setting for the electricity market. The board of UES finally approved the company’s formation late last year. Originally, Russia had planned to create ten wholesale generation companies, including four based on hydroelectric stations.

In a related development, a further five local utilities – Chelyabenergo, Kurskenergo, Mordovenergo, Nizhnovenergo and Smolenskenergo – have recently been unbundled into separate generation, heating, transmission and supply assets leaving the utility arms with local distribution assets only.