Peretok Light: highlights of the Russian and global power sectors for 4 to 10 February

Enel Russia does not exclude a revision of dividend payout in light of CHP plant renovation

This past week was not rich in significant energy news. Power generators continue to openly publish the lists of the facilities they would like to renovate as part of the CHP plant renovation program soon to be launched. In accordance with the schedule published by the “Market Council” Non-Profit Partnership, the “storm selection” (up to 11 GW, within a two-year renovation period, 2022-2024) will be held on March 28-29. Having considered the proposed rules of the game as far as the CHP plant renovation program is concerned, major power generators are talking more about the possible redistribution of their financial flows allocated for this program, while according to the Energy Ministry’s estimation, the generators’ total investments amount to 1.9 trillion rubles. At the end of the past year, Denis Fedorov, the head of Gazprom Energoholding (GEH), confirmed that the holding expects its subsidiaries to maintain the predicted dividend level (at least 26% of their net profit under RAS), as any potential growth is limited, including the renovation costs. On Wednesday, Enel Russia presented its strategic plan and announced that it expected a 2.5 debt burden increase in 2019-2021, as well as a reduction in profits from 7.3 billion rubles to 5 billion rubles a year. If the competitive selection for renovation and RES is completed successfully, Enel Russia may revise its dividend policy, according to which shareholders are now receiving as much as 65% of its net profit under IFRS.

The Supreme Court supported the incineration opponents in Tatarstan

The projects to construct five waste incineration plants (WIPs) funded at the expense of wholesale energy market consumers, continue to face serious challenges, still far from entering the stage of practical implementation. In Tatarstan, local residents stated that they did not agree to the siting of the facility to be built under the PSA (Power Supply Agreement) SHW (Solid Household Waste) program; after a series of litigation, the Supreme Court took their side. According to experts, these conflicts are unlikely to result in the cancellation of the projects, but they view the launch of these plants on time as still doubtful. The delay involves financial losses of the Rostech structures implementing the projects, but last April, the Market Council adjusted the PSA SHW mechanism and actually freed the investors from the need to provide financial guarantees for the fines to be paid in case of the delayed launch of the WIPs.

Rotenberg and Shipelov’s company can become a monopolist in the supply of electricity meters

The introduction of smart metering systems (SMSs) remains one of the most discussed issues in the core community, despite the fact that at the end of December, Russian President Vladimir Putin signed the law on SMS. The key issue is cost funding: according to a number of market experts, the prescribed norms are not enough, and the program is not going to succeed if the relevant bylaw provisions are not specified and, possibly, if SMS tariff costs are not removed from inflationary restrictions. Meanwhile, Vedomosti named the first (and, probably, major) applicants for the funds to be spent by the power sector on the adoption of smart meter and further on, to be retrieved through the tariff among other means.

The Energy Ministry: “Kyrgyzstan offered the Russian Federation to return to the implementation of the Upper Naryn Hydroelectric Power Plant project”

While the Ministry of Defense sappers and engineers are coping with the consequences of the fall of the mud volcano that blocked the Bureya HEPP reservoir (they plan to restore the inflow to the power plant in mid-February), the Russian Federation and Kyrgyzstan have reopened the discussion of the HEPP cascade draft project to be implemented in Kyrgyzstan. RusHydro, the owner of the Bureya HEPP and other HEPPs in Russia, is still unable to recover the $37 million spent on the project by 2016 when it was terminated by the decision of the Kyrgyz parliament.

11-02-2019 11:57