Putin reportedly orders government to keep Russia’s electricity prices 20% lower than China’s
Vladimir Putin has instructed the government to ensure that electricity prices for consumers in Russia are 20 percent lower than in China when drafting the country’s long-term plan for the development of its power infrastructure, Kommersant reports.
Russian President Vladimir Putin has directed the government to keep electricity prices for consumers in Russia 20 percent lower than in China when creating the nation's long-term plan for developing its power infrastructure, according to Kommersant. The order came from a meeting during the EEF, though the reason for selecting China as the benchmark remains unclear to market participants.
Industry experts suggest China is among Russia's top competitors in energy-intensive sectors, with Chinese companies paying some of the lowest electricity rates globally, following only Russia's. The current long-term plan, set to continue until 2042, envisions constructing 88.5 gigawatts of new capacity and modernizing an additional 66.4 gigawatts, at an estimated cost of 40 trillion rubles.
Building the necessary trunk power lines and distribution networks will require an additional 17 trillion rubles. The construction of new capacity in Russia primarily relies on targeted surcharges on the wholesale energy market, which ultimately leads to higher final prices for consumers. The Energy Ministry projects that if this approach persists, electricity prices could surge from 6.4 rubles per kilowatt-hour in 2024 to 12.8 rubles per kilowatt-hour by 2042.
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