Page 119 - RusRPTAug21

9.1.10 Utilities & Renewables sector news
The formation of Russia’s utilities second investment cycle in contemporary Russian history is nearing completion.
With investments of some RUB2.9tn, the plan would allow the energy system to replace 2.5% of capacity annually, drive the carbon footprint down some 30% and still maintain an excess reserve margin.
The price that the Russian economy has to pay for electricity would decrease, we expect, from 3.9% of GDP currently to 3.3% by 2030F, despite the 40% growth in end-user absolute prices.
Analysis shows that growth is limited to a few individual companies, with the potential for EBITDA to double at RusHydro and Enel Russia only.
Second investment cycle. Russian investments in the electricity sector over the next decade are set to total RUB2.9tn, with 62.6GW (25% of current) affected.
Utilities are to undertake the light modernisation of outdated fossil-fuel capacity, build new capacity for two national projects (the Arctic development and the Siberia-Asia railway link expansion), and switch capacity in the Russian Far East from coal to gas.
Reducing carbon emissions is not the cornerstone of the programme, with renewable support schemes accounting for only 5% of total capex (low-carbon capex accounts for 29%, though). However, modernising 27% of fossil-fuel generation would also help, and we expect the CO2 footprint in electricity to dive below the 300gCO2/kWh threshold by
119 RUSSIA Country Report August 2021 www.intellinews.com