Putin reportedly orders government to keep Russia’s electricity prices 20% lower than China’s

Vladimir Putin has reportedly told the Russian government to keep consumer electricity prices 20 per cent below China’s when it draws up a long-term plan for the country’s power infrastructure. The instruction, issued after a meeting at the Eastern Economic Forum, sets a price target as Russia plans major investment in its energy system.

The reason for choosing China as the benchmark is unclear to market participants. Experts say Chinese firms in energy-intensive industries are key competitors and pay among the world’s lowest electricity prices, with Russia’s lower still. Russia’s current plan runs to 2042 and envisages 88.5 gigawatts of new capacity and 66.4 gigawatts of modernisation, costing about 40 trillion roubles, plus roughly 17 trillion for power lines and distribution networks. The Energy Ministry estimates that under the current funding scheme, the final price could rise from 6.4 roubles per kilowatt-hour in 2024 to 12.8 roubles by 2042.