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as ​bringing challenges to the company​. In 3Q20 hydropower generation declined by 5.8% y/y, which was generally in line with expectations, Sova Capital commented on October 24. Thermal power generation was up by 8.8% y/y, while renewable electricity generation declined 1.5% y/y.
Unipro​ reported 3Q20 Operating Results. ​Total electricity output was up 5% y/y driven by a recovery in the load factor of fossil fuel power plants, given flattening hydro output. Heat sales, however, fell 25% y/y. Supportive for 3Q20 IFRS, but BGRES remains key driver. Recovery in electricity generation dynamics and the increase in electricity prices on the spot market (+1% and +33% y/y for the European zone and Siberia, respectively) should result in better IFRS numbers (10 November) vs 2Q20. However, the key driver for the company remains the long awaited launch of Berezovskaya GRES’ block, which has yet to be delivered – we await the company’s comment on the restoration process.
OGK-2 reported weak 3Q20 operating results on October 20​. According to the results, electricity generation was down 11.7% y/y to 11.1mn MWh while heat output was down 27.2% y/y to 0.8mn Gcal. The weak results are partly due to the 3.5% y/y drop in electricity consumption in Russia in 3Q20. Optimization, which led to inefficient equipment generating less, also contributed to the negative trend. Compared to 2Q20 though (-31.8% y/y), the decline in generation volumes was lower, as the negative impact from COVID-19 restrictions started to ease. Heat generation was down 27.2% y/y over 3Q20, and electricity generation over 9M20 was down 18.7% y/y to 33.5mn MWh. Electricity prices in the European and Siberian parts of Russia, which were up 1.2% y/y and 25.4% y/y in 3Q20, respectively, should partially offset the negative effect that the weak operating results had on the revenue level.
RusHydro has reported its 9mo20 production results. Hydro generation was up 17.2% y/y (with strong water inflows in 1H20) vs. being 5.8% y/y down in 3Q20, while thermal power plants saw an increase of 2.7% y/y vs. the 8.8% y/y increase in 3Q20 due to demand growth in the Russian Far East. Overall, in 9mo20 production increased 14% y/y. Heat sendout was up 1.7% y/y in 9mo20 vs. the 0.2% slide in 3Q20. Retail sales were almost flat y/y. RusHydro expects water inflows to be close to normal levels in 4Q20. The 9mo20 operating numbers were robust, yet again, but this was not unexpected as they were well supported by impressive water inflows recorded in 1H20, while 3Q20 water levels were closer to the normal levels, as guided by the company. The results continue to be supportive for the 9mo20 financials as well as the FY20 financials, with strong operating data, the launch of DPM projects, write-offs moderating and a positive forward revaluation set to cause a major nominal improvement in net income y/y.
Utilities sector – Russia has no plans to introduce a carbon tax. ​During the Foreign Investment Advisory Council (FIAC) meeting on Monday, Minister for Economic Development Maxim Reshetnikov made a number of comments
148 ​RUSSIA Country Report​ November 2020 www.intellinews.com