Page 142 - RusRPTJul21

● Unipro was cautious and did not apply for projects with localised turbines for 2027-29. The modernisation of Surgutskaya GRES was fully selected, while if the auctions with localised turbines are prolonged, Unipro could be interested in CCGTs for Yavinskaya GRES and in the future for Smolenskaya and Shaturskaya GRES. CCGT is a modern technology, making it possible to reduce the burden on nature. Unipro supports the idea of adding more volumes for CCGT projects and hopes that auctions with CCGTs will be prolonged.
● Unipro is assessing both wind and solar projects in renewables DPM and understands that renewable projects would not allow it to cut emissions with the base portfolio of assets intact. However, the overall portfolio could become more balanced, so it is important to develop ESG competencies. It is also important to make the thermal assets more ecologically friendly. It is planned to keep Berezovskaya GRES in operation for the next 35 years and the current construction of the coal-intake would reduce the pressure on the environment.
● Unipro, together with Uniper and Novatek, has formed a working group on blue hydrogen projects.
● Unipro continues to support the development of the agro project (that is getting up to speed) at Berezovskaya GRES, with no direct investments.
Overall, we believe the messages are supportive for sentiment. Unipro is interested in DPM2, is looking to upgrade capacities at all gas-fired assets (apart from the chosen Surgutskaya GRES) and those could be CCGT, is working on improving the ESG profile with an appetite for renewables, and improving the environmental standing of coal assets, in addition to the potential favourable upgrade to CCGT of gas-fired generation. Dividends remain top of the agenda and the company is trying to find a balance between investments and dividends. Nevertheless, Unipro actually has to deliver on the ESG improvement and decarbonisation for the story to rerate further, in our view (post the rerating on dividends to a 7-8 dividend yield, from the current 10-11%) and its green transformation could be bumpy, as we have seen with Enel Russia.
On Wednesday 2 June, En+ announced that it had signed Russia's largest supply deal for I-RECs to deliver 1mn certificates to BitRiver (the operator of the country’s largest data centre, offering colocation services for bitcoin mining in Russia) in 2021-22. I-RECs correspond to the electric energy produced by EuroSibEnergo (Krasnoyarsk HPP) and Abakansk Solar Plant.
Also on 2 June, TGK1 and PhosAgro signed an extension to the contract for supplying green energy. In January, they had already signed an agreement for 323mn kWh of green electricity to be supplied in 2021, covering 20% of the Apatite plant’s consumption. PhosAgro is expecting further cooperation, and
142 RUSSIA Country Report July 2021 www.intellinews.com