Page 119 - RusRPTFeb21

business daily Kommersant reported on Monday, citing a letter by CEO Alexander Chuvayev. "The executive suggests redistribution of the energy market payment for inefficient generation in favor of the renewable energy sources," the newspaper said. Chuvayev wants to redistribute the 50bn rubles per year paid for excessive thermal power capacities for construction of renewable energy facilities. The official said that support of green generation would save Russian exporters US $3.0–4.8bn per year of a new hydrocarbon tax in the E.U. as calculated by BCG.
The Deputy Minister of Energy, Evgeny Grabchak has noted on the television channel Rossia-24 that YTD electricity consumption is up by 4.3% with the key underlying reason being the colder weather. ​Excluding the temperature effect, demand is up by 0.6%, which is a confirmation that economic activity is recovering, according to Grabchak. The news is supportive for Russian utilities. Given the 2.3% YoY slide of electricity demand recorded in Russia in 2020 (on the back of warmer weather conditions and the COVID-19 outbreak, which, together with RSV prices and other adjustments, wiped 14% off our net income year-beginning forecast FY20 forecast), the recovery in demand is to support the 2021 financials. YTD, RSV prices are showing a slight YoY improvement in Zone I, although they are still depressed in Zone II. We estimate that electricity demand will climb 1.4% YoY in Russia in 2021 (vs. the more aggressive recovery expectations by Ministries) vs. a 2.4% YoY growth in RSV prices in 2021 - for details see Utilities Quarterly – 4Q20; FY21 outlook, kaleidoscope of forecasts of 13 January 2021.
Lukoil​ might buy a 20MW solar power plant from Hevel in Volgograd Oblast​, Kommersant reports. The construction of the power plant is to be completed in 2021. After the purchase, Lukoil would be able to collect payments for the provision of renewable generation capacity (DPM). The company expects the deal to close in the next few months. Our View: Lukoil already owns a 10MW solar power plant near its Volgograd refinery and is financing capacity expansion of 20MW, as well as financing the construction of a 2.5MW of solar generating capacity in Krasnodar. We treat the news of expanding renewable generating capacity as slightly positive from the ESG standpoint, as it will allow the company to reduce its carbon footprint. According to the estimates of our utilities team, the power plant might be worth RUB 2.2-2.5bn, including the capex required to finish construction, or less than 0.6% of Lukoil’s 2021F capex, on our numbers. As a reminder, at the end of 2020, there were media reports that Lukoil was contemplating selling its traditional power generating assets, possibly in order to lower emissions.
9.1.11 ​Metallurgy & mining sector news
119 ​RUSSIA Country Report​ February 2021 www.intellinews.com
More than 38 tonnes of gold was produced in Russia’s republic of Yakutia in 2020​, Governor Aisen Nikolayev said on Friday. “Coal and gold are