Page 118 - RusRPTOct21

· RUB7,682-7,946/MWh for small hydro vs. RUB7,816/MWh weighted average and RUB7,682-8,507/MWh cap.
Total support for wind and solar projects implies a RUB27.9bn payment annually; average utilisation stands at 46% for wind, 20% for solar and 43% for small hydro.
Among the winning companies were Fortum with Rosnano (75% of the wind capacity), RosAtom (25% of wind capacity), Unigreen power (70% of solar capacity - Hevel related) and two entities of Solar Systems (that secured 30% of solar capacity), RusHydro offtook all volumes in small HPP.
The Ministry of Energy has proposed postponing the 2028 capacity auction due at the end of the year, foroth existing and modernised capacity, to 2024.
As a result, the ministry expects to shorten the pre-set capacity selection from six years currently to three years. According to the press release, this would allow for more precise investment, demand and reserve planning in the energy system, and would give time to analyse the rationale for a higher share of CCGT and combined heat & power capacity at the next capacity auctions.
The existing KOM mechanism, which allows gencos to cover the fixed part of their operating expenses, envisioned the provision of economic price-based signals for the commissioning or decommissioning of capacity during periods of demand expansion/contraction. However, outsourcing of the investment part of the tariff into special mechanisms (DPMs) outside of the scope of the general capacity market, coupled with rigid price control of KOM (price ceilings and floors), has led to the loss of this envisioned functionality. As a result,besides the function of more transparent long-term financial planning – when generators received 100% clarity on the capacity part of their revenues for six years ahead – KOM currently offers little function. For us, the MinEnergo proposal leads to the following conclusions.
Losses from CBAM could cost RUB14bn pa. Interfax has reported that sources aware of Ministry of Energy calculations claim InterRAO’s potential losses from the introduction of the EU CBAM are RUB14bn annually from 2026.
Two scenarios are being assessed by the Ministry of Energy. First, if the EU regulator attributes the CO2 footprint of the Russian generator at par with the average fossil-fuel generator in the EU, this would lead to InterRAO halting exports to the EU, which would imply RUB14bn of lost profits. The second scenario involves InterRAO verifying its
118 RUSSIA Country Report October 2021 www.intellinews.com