Page 163 - RusRPTNov21

On Monday 11 October, OGK2 reported its 9mo21 operating results.
Generated electricity was 11.5% higher than in 9mo20, at 37.4bn kWh, while heat sendout improved 11.8% y/y to 3.7mn GCal. The 0.4% y/y growth in 1H21 is impressively strong, as Krasnoyarskaya GRES-2 was still part of the group in 1H20, while Cherepovetskaya GRES was in repairs for most of 1H21 due to the accident. Now it seems that 3Q21 generation is up by as much as 35% y/y. That suggests higher generation at most of the company’s plants as well as potential good news for Cherepovetskaya GRES (although no details have been disclosed so far on a plant-by-plant basis). Along with the robust RSV prices, the production numbers are supportive for the 9mo21 results, due in November. However, we note the ESG risks for the story due to its large coal exposure and that the insurance/fines in regards to the accident at Cherepovetskaya GRES are yet to be disclosed. We estimate the 2021F dividend yield at 7.8%.
Russian coal major SibAntracite Group announced signing a three-year contract for the supply of wind electricity from Novawind (controlled by state nuclear agency RosAtom) through Novosibirsk supply company. The supply is guaranteed by I-RECs and is to start from January 2022, supplying the Siberian Antracite entity of SibAntracite with 56.6mn kWh annually covering 100% of its consumption. SibAntracite is also assessing green energy supply to other subsidiaries.
Deputy CEO of InterRAO Alexandra Panina has noted that the company expects exports to Latvia and Estonia to grow 38% YoY in 2021, on top of the twofold growth of exports to China announced recently. This implies that the company is expecting 20bn kWh of exports in 2021.
According to Interfax, citing the acting head of InterRAO's trading division Alexandra Panina, the company has raised its 2021 electricity export target to 20 bln kWh, up 5.2% from the previous target of 19 bln kWh. At the same time, the company does not rule out outperforming the new target depending on winter temperatures. In 1H21, the company exported 10.3 bln kWh, meaning the new target implies 2H21 export sales of 9.7 bln kWh, still 5% below the 1H21 level. We see this as a conservative scenario given the energy deficit and increased demand for electricity in neighboring countries. As we understand, the higher export volume target is driven mainly by higher expected sales to China (starting this month, InterRAO almost doubled its sales to China) and to the Baltic countries (starting October 15, the company will increase exports by 38% to Estonia and Latvia).
RusHydro updates emerged during Russian Energy Week.
● Deputy Minister of Energy Evgeny Grabchak noted that RusHydro would be financing the construction of the second stage of the Pevek-Bilibino grid line from its funds, with a potential cost of RUB 16-17bn.
● Member of the Board Roman Berdnikov announced that the company would be assessing more small HPP projects at further renewables DPM auctions and outside of the North Caucasus.
163 RUSSIA Country Report November 2021 www.intellinews.com