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Kamchatka’s Geothermal Surge: RusHydro and Zarubezhneft Join Forces to Power Russia’s Green Future

Russia is making a bold move toward renewable energy independence with a groundbreaking partnership between RusHydro and Zarubezhneft, two of the country’s energy giants. 

By: Robert Buluma

This strategic alliance has resulted in RusHydro acquiring a controlling 51% stake in Geotermalnaya Energetika, a subsidiary of Zarubezhneft that oversees renewable energy projects. The crown jewel of this venture? The construction of Mutnovskaya GeoPP-2, a 66.5 MW geothermal power plant set in the geologically rich region of Kamchatka.

This milestone isn’t just another investment—it’s a calculated response to Kamchatka’s growing energy needs. With electricity demand in the region’s Central Energy District (CER) projected to soar to 1.85 billion kWh and 315 MW by 2030, authorities anticipate a looming power shortfall of up to 31 MW. To bridge this gap, RusHydro and Zarubezhneft plan to deploy a binary-cycle geothermal system at Mutnovskaya GeoPP-2, which promises over 90% capacity utilization and a significant reduction in the region’s reliance on imported fossil fuels—by up to 172,900 tons annually.

The binary-cycle approach, praised by Kamchatka Governor Vladimir Solodov and President Vladimir Putin, will enhance the efficiency of geothermal energy extraction while laying the groundwork for long-term energy resilience. The two companies also plan to explore additional geothermal licenses, including the Koryak-Ketkinsky, Verkhne-Zhirovsky, and Bolshe-Banny fields.

Kamchatka already hosts three operational geothermal plants—Mutnovskaya GeoPP-1 (50 MW), Verkhne-Mutnovskaya GeoPP (12 MW), and Pauzhetskaya GeoPP (12 MW)—all under RusHydro’s management. The addition of GeoPP-2 and a new 16.5 MW binary block at GeoPP-1 will solidify Kamchatka’s role as a geothermal powerhouse and reduce its dependence on costly imported diesel and LNG.

The project’s financing model is equally innovative. By entering the renewable energy (RES) tender system on Kamchatka’s retail market, the partnership aims to secure funding while avoiding any hike in regional energy tariffs. Moreover, the planned designation of the project as a Kamchatka Advanced Development Territory (TOR) resident opens doors to tax benefits and preferential treatment—vital incentives for large-scale green infrastructure.

Experts like Sergey Rozhenko (Kept) and Igor Chausov (Energinet Center) underscore the rationale behind this geothermal push. In isolated regions like Kamchatka, geothermal energy offers a secure, localized, and cost-effective alternative to imported hydrocarbons. It also delivers a consistent power output, unlike intermittent sources such as wind or solar. Beyond electricity, geothermal systems can power district heating and support recreational and therapeutic industries, forming complete geothermal clusters.

Globally, Russia’s move aligns with trends seen in geothermal leaders like Turkey, where the levelized cost of electricity (LCOE) ranges from $0.09–$0.12/kWh. In Kamchatka, where imported fuels dominate and drive up energy costs, geothermal offers an economically sound and sustainable solution.

Related: Geothermal Colonialism or Global Partnership

As the design and exploration stages of Mutnovskaya GeoPP-2 continue through 2027, Russia’s far east is poised to become a beacon of clean energy innovation—powered not by oil or coal, but by the earth’s own internal heat.


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