Russian President Vladimir Putin has instructed officials to ensure that average final electricity prices for Russian consumers remain at least 20% lower than those in China.

The directive was issued following a meeting held as part of the Eastern Economic Forum, according to Kommersant.

To achieve this target, Russia plans to build power plants with a combined capacity of 88.5 gigawatts (GW) and modernize facilities with a further 66.4 GW of capacity by 2042.

The total investment is estimated at 40 trillion rubles, although the funding sources have not yet been determined.

However, the financing model could create challenges for consumers. Such projects are typically funded through additional charges in the wholesale electricity market, which can push up end-user tariffs.

According to estimates by Russia's Energy Ministry, under this scenario, the final electricity price could double by 2042, rising from 6.4 to 12.8 rubles per kilowatt-hour.

Experts have also warned that linking Russian electricity prices to Chinese levels could make domestic pricing dependent on China's energy pricing policies.

They stress that a meaningful comparison must account for differences in taxes, subsidies, exchange rates and electricity consumption patterns.

Sergey Sasim, director of the Center for Electric Power Industry Studies at the Higher School of Economics, said that household electricity prices in Russia are approximately 15-20% lower than in China when measured in US dollars.

In the industrial sector, however, prices are roughly at parity, or China has a slight advantage, he noted.

Russia’s Energy Ministry believes that establishing a state-controlled entity called Rosenergoproekt could help contain electricity price increases. The organization would oversee power plant construction, project costs and the allocation of new generating capacity.

The plans highlight Russia’s challenge of expanding electricity generation while keeping energy affordable for households and businesses over the coming decades.