Russia will slash electricity prices for industrial users in the Far East of the country to bring them in line with the national average from July 1, 2017, a potential boon for investors in the region.
The Far Eastern territories suffer from large power tariff disparities because of the sheer size of the areas near Russia’s Pacific coast, the low density of the population, and a number of isolated local power systems that are unconnected to the main grid.
«The high cost of electricity in the Far East holds back the development of the region,» Minister for the Development of the Russian Far East, Alexander Galushka, told Asia Times.
The lowering of energy tariffs will allow industrial users in 5 Far East regions to save an estimated $460 million a year.
The cuts will be compensated by increases in wholesale power prices elsewhere in Russia.
The biggest fall in rates will be in Chukotka with 70%, followed by Sakha with 51%. In Kamchatka and Magadan tariffs will slide by 38%, and in Sakhalin by 35.5%.
The Russian Far East is rich in energy resources, although Inter RAO, one of Russia’s largest power utilities, sells surplus electricity mainly to China via the Primorsk Krai region.
According to the latest figures from 2015, Inter RAO sold 17.5 million kilowatt hours of electricity abroad, earning more than $848 million.
Japan has also at times shown interest in importing Russian electricity.