Peretok Light: highlights of the Russian and global power sectors for 26 November to 2 December
NLMK wants to increase its industrial generation 1.5 times by putting its project on Belousov's list
Despite the high likelihood of grid capacity charge being introduced, major customers continue exploring this option in search of an optimal (least costly) way to secure power supply for their businesses. It became known early last week that NLMK is lobbying for the inclusion of its 300 MW CHP plant construction project on Belousov's list. The plant will have a price tag of 35 bln roubles, but smelters will be able to save on fuel down the road: The CHP Plant will burn secondary fuel gas. The project, decreasing as it does the capacity of the Russian electric power market, may be eligible for property tax relief.
The government of Kostroma Oblast reported the completion of a similar project by the Sveza company last Wednesday. The CHP Plant, which also burns core process waste, set back the export-oriented manufacturer of birch plywood 1.5 bln roubles. It is true, though, that here the new generating asset will solve the problem of supplying the core process with steam.
The need for heat generation forced Bashkhim group to expand in-house generation too. Russia's largest alkali manufacturer buys Bereznikovsky TETs-4, which T Plyus planned to close 1 January 2019. The station, which is 87 this year, cost Bashkhim 10 times less than Sveza's new but lower-capacity CHP plant.
The Russian power market continues to closely monitor the situation around Oleg Deripaska's entities hit by the sanctions 6 April. The parent company of the En+ group, which controls a major independent generator (Yevrosibenergo) and consumer (Rusal) in the second free-price zone, has been trying for nearly eight months now to get the USDT to take it off the US sanctions list. On 20 December the group's management, from whom Mr Deripaska tries to distant himself, are expected to make a decision on reincorporation under the Russian jurisdiction – in the Kaliningrad offshore zone.
In an attempt to recapture its status of full-fledged participant in the international market, Oleg Deripaska's entities, which export 80% of aluminium output, are continuing their efforts to gain preferential treatment from the Russian government, citing sanctions complications. On 28 November the Cabinet published a decree by premier Dmitry Medvedev allocating of Rosrezerv 10 bln roubles to purchase up to 50 thou. tonnes of aluminium. Given these figures, the treasury's cost of metal will be 1.5 times above the current LSE rates (about $2 thou. per tonne). Earlier, a source close to RUSAL, said that the company needed to sell aluminium to the government for two years until a new distribution system was put in place with a focus on Asia.
Of vital importance for the energy community is Rosnano's decision to exit a major RES project – the Hevel company. Mikhail Silvodayev, ex-manager of Renova, will be the new holder of 54% of the solar generator by the end of the year. However, Rosnano's head, Anatoly Chubais, is likely to remain the main lobbyist for RES generators: no longer a shareholder, Rosnano is now a major creditor – by 2025, Hevel is expected to have repaid more than 10 bln roubles to Rosnano.
Having been sued by US state and municipal governments, major oil corporations started pushing the idea of a special national tax on CO2 emissions through their lobbies. The oil producers are willing to pay an extra $40 per tonne of emissions and accept further indexation of this charge. In the event of redistribution of carbon tax between citizens, the average US household will be paying about $2k per year. The oil producers will be able to recover their expenses by including them in their wholesale prices, immunizing themselves against possible trillion-dollar lawsuits into the bargain.