Page 115 - RusRPTOct21

trading in electricity and capacity and, in general, do not provide for the transfer of environmental rights (this has to be adjusted to satisfy international standards). Establishing a system would make it possible to introduce standardised green instruments and solve these issues. One suggestion is to set up the terms of Green unilateral contracts that would need to be signed on top of the usual contracts and would automatically assign green instrument status.
In addition, it haseen proposed to approve that the concept of ‘green instruments’ in the Russian electric power industry stands for a set of all documents and mechanisms with the help of which generators can pass on to consumers reliable recorded information about the characteristics of generation, as well as special rights that make it possible to use the information obtained when calculating the volume of indirect energy emissions of greenhouse gases, make statements about ‘green’ energy consumption and apply ‘green’ labelling.
The Russian government has approved a detailed macroeconomic outlook for 2021-24 that includes proposals to index tariffs for infrastructure companies. Compared to the version released in April, the Russian government has changed its outlook on tariffs for gas, electricity distribution and railway transportation for cargo and passengers. The revised tariffs are the result of higher-than-expected growth in CPI and PPI.
Generation companies. The outlook proposes increasing gas tariffs for manufacturing from 3% to 5% in 2022 (with indexation to go into effect from 1 July 2022), from 3% to 4% in 2023 and from 3% to 4% in 2024. Higher gas tariffs would raise liberalized day-ahead electricity prices in the European part of Russia due to the expected growth in fuel costs for TPPs. We see that HPPs shouldenefit from higher day-ahead electricity prices, as they have no fuel costs in their COGS. A hypothetical 2% increase in the spot price for HPPs, with all other parameters being equal, would result in a 2.3% increase in HYDR’s EBITDA.
Grids. The major indexation for grid companies (from 3% to 3.8%) is proposed only for 2022, while tariffs for 2023-24 are expected to remain stable at 3%. In our models, we estimate tariffs to grow 2.9% in 2022-23 and 3.1% in 2024.
Cargo transportation. Tariffs for railway cargo transportation in the regulated sector could rise from 4% to 4.3% in 2022 (with indexation to go into effect from 1 January 2022), from 4.2% to 4.5% in 2023 and from 3.9% to 4% in 2024. The proposed indexation could impact “empty run” costs for railway operators.
115 RUSSIA Country Report October 2021 www.intellinews.com