The reason is that the production capacity of thermal and hydroelectric power plants in the Russian Far East is too expensive, and the country's regulatory authorities also need to control export profits (5% per year), so part of the profits from power supply to China need to be used to reduce domestic tariffs.

If we continue to forcefully supply electricity to China, it may cause the company to lose money.

In fact, China is able to meet its own needs in terms of power generation.

As the world's largest electricity power, China's power generation reached 7503.4TWH in 2019, accounting for 27.8% of the world's share.

If the transportation distance is too long, it will cause excessive power loss.

Therefore, my country's western provinces will export excess electricity to nearby countries such as Vietnam.

It is reported that Vietnam purchases approximately 2 billion kilowatt-hours (kWh) of Chinese electricity every year.

Buyers from China, which is close to Russia, will purchase electricity from the country nearby, which has lower power losses and lowers transmission costs.

There is another reason why Chinese buyers buy Russian electricity - Russian electricity is cheaper.

Statistics from InterRAO show that in 2019, China purchased a total of 3 billion kWh of electricity from the company, accounting for only 0.04% of total domestic energy consumption.

This electricity only costs China 776 million yuan, or about 0.26 yuan/kWh.

If Russia’s electricity prices increase and the price advantage is lost, Chinese buyers will probably not buy it.

In addition, there is less demand for electricity in winter, so even if the Russian company suspends power supply to China, domestic electricity can keep up with demand.

In addition, InterRAO also pointed out that power buyers also saw the risk of the company's price increases and proposed to allow other power companies to enter the export market.

Extended information: Russia's "News" revealed on Thursday based on relevant agreements that Russian Hydropower Open Joint Stock Company and China Power Construction Group have agreed to invest US$3.5 billion to US$5 billion in the construction of small hydropower stations (capacity below 25 megawatts) in Russia.

Sources explained that Roshydro and PowerChina are discussing the establishment of a joint venture in the form of a fund.

Russian Hydropower Company may invest capital and design into the joint venture, and PowerChina's shares are likely to be paid in the form of funds. About 70-80% of the investment in the joint venture project is expected to be secured by project financing provided by Chinese banks.

Most of the hydropower stations in the agreement are in southern Russia: Kabardino-Balkaria, Krasnodar Territory and other places, but there are also projects in Altai, Karelia, Omsk and Murmansk Oblasts

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