Page 138 - RusRPTSept22

The basic cost of electricity in Europe rose above €500 per MWh. This represents a 500% price increase over the past year, writes Bloomberg.
The Russian Federation is shelling the Zaporizhzhia NPP to cut off electricity in south Ukraine. Artillery shelling of the Zaporizhzhya NPP is intended to destroy the plant's infrastructure, damage all power lines through which electricity is supplied to Ukraine's power system, and cut off power in the south of the country, stated Energoatom. The disconnection of the ZNPP from the power system is being facilitated by Rosatom representatives located at the station. The shelling of the station will continue until the occupiers reach their goal, said the head of the Zaporizhzhia Regional Military Administration. On August 5, the station's fourth power unit was turned off after the shelling by the Russian occupiers. Currently, only two of the Zaporizhzhia Power Plant’s six power units are in operation.
Day-forward power prices in Continental Europe are generally around EUR 350/MWh, and even at their lowest are generally not expected to drop below EUR 250/MWh. This can be compared to prices that would usually range from EUR 40-70/MWh only a few years ago, reflecting the stress placed on the European grid by a move to a heavy reliance on intermittent power sources such as wind and solar and the effect of record-high gas prices. The latter, of course, is partly due to the 4x reduction in flows of Russian gas vs. August of last year, brought on by disputes over the maintenance of Nord Stream-1 turbines, the ownership of the Polish section of the Yamal-Europe pipeline, and Ukraine’s closure of one of two entry points for Russian gas transiting that country.
The president signed a decree that prohibits deals involving oil/gas/power companies until the end of this year. Presidential decree prohibits the sale/transactions with strategic entities. Given that for Unipro, the future of its core shareholder is important, analysts are keeping an eye on this development.
In case Unipro's controlling shareholder is locked, that may remove the risk of abrupt exit. As highlighted before, at the recent conference call, Unipro's CEO made no comment on the exit of the controlling shareholder (Fortum/Uniper). Management keeps operations as it is, if a new controlling shareholder changes something, so be it, indicated CEO. Earlier, Fortum highlighted that it plans to exit Russia. Inability to exit is possibly the best scenario for minorities of Unipro now.
Power consumption went down 0.2% y/y in July, spot power prices also slightly contracted, according to the Energy Ministry. Details to be released by System Operator later. Russian power consumption reflects different trends – power demand contracts in the European part of Russia (demand in Siberia was up). Spot prices that are critical for gencos earnings slightly declined in July (in European Russia) down by c0.9% (to cRb1,500/MWh).
138 RUSSIA Country Report September 2022 www.intellinews.com