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Russia Power Report Q4 2012

Russia Power Report Q4 2012

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Additional Information

Price	$1,175.00
Publisher	Business Monitor International
Date of Report	Oct 24, 2012

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Quick Overview

BMI View: Whilst the Russian power market benefits from considerable market size and widespread
electricity export links, a whole host of challenges still face prospective investors in the sector.
Macroeconomic trends, coupled with declining population, are set to take a toll on power demand. In
addition, while we expect Russia to converge steadily towards developed standards of wealth, we caution
that structural risks, including a weak business environment and poor institutional capacity will pose
challenges to project development across all segment of power sector over the long term.
The Russian Federation is currently one of the top electricity generating economies in the world. Yet, a
number of concurring factors point to the fact that the diverse components of Russia’s power market will
see rather moderate growth over our forecast period to 2021. BMI’s Country Risks analysts anticipate
that Russian growth will slow markedly over our 10-year forecast horizon, with real GDP growth to
average 3.9% between 2016 and 2021.
A slowdown in exports on the back of developments in the commodity sector could potentially reduce
power consumption in energy-intensive industries; with elevated domestic demand growth likely to cover
the gap only partially, hindered by an adverse demographic trend. Hence, BMI believes that during the
period 2012-2021 electricity consumption will see an average annual increase in consumption of 2%
year-on-year (y-o-y), mirrored by 1.9% average annual growth for generation, as the country continues to
play an important role as exporter of energy in the region.
This considered, we believe that:
§ Refurbishment and substitution of ageing plants will represent one of the main drivers for
new investments, with gas remaining the most significant source for power generation,
owing to its abundance.
§ There is considerable scope for the Russian government to increase divestment within the
electricity market, and introduce greater private sector involvement into the industry.
However, we note that downside risks appear on the rise as stakeholders have voiced
concerns that a trend towards consolidation of government-owned companies is beginning
to emerge.
§ Attempts to lessen the country’s strong reliance on thermal sources could create
opportunities for other segments. Most notably, as a result of the Energy Strategy 2030,
nuclear and non-hydropower renewable expansion are at the top of Russia's energy agenda.
However, delays in the construction of nuclear installations and the lack of appropriate
policy and regulatory framework to stimulate demand and attract investors within the
renewable industry, leads us to believe that these targets will not be met, perpetuating gas
predominance over the next decade.

Table of Contents

BMI Industry View........................................................................................................................................... 5
SWOT Analysis ............................................................................................................................................... 6
Russia Power SWOT............................................................................................................................................................................................. 6
Regional Overview.......................................................................................................................................... 7
Industry Forecast Scenario .......................................................................................................................... 10
Table: Country Snapshot: Economic and Demographic Data ............................................................................................................................. 10
Table: Country Snapshot: Power Sector............................................................................................................................................................. 10
Russia Forecast Scenario......................................................................................................................................................................................... 11
Electricity Generation and Power Generating Capacity..................................................................................................................................... 11
Table: Russia Total Electricity Generation Data And Forecasts, 2010 - 2016 .................................................................................................... 11
Table: Russia Total Electricity Generation Long-Term Forecasts, 2015 - 2021.................................................................................................. 13
Table: Russia Electricity Generating Capacity Data And Forecasts, 2010 - 2016 .............................................................................................. 15
Table: Russia Electricity Generating Capacity Long Term Forecasts, 2015 - 2021 ............................................................................................ 16
Electricity Consumption...................................................................................................................................................................................... 21
Table: Russia Total Electricity Consumption Data And Forecasts, 2010 - 2016 ................................................................................................. 21
Table: Russia Total Electricity Consumption Long-Term Forecasts, 2015 - 2021............................................................................................... 22
Transmission & Distribution, Imports & Exports ............................................................................................................................................... 23
Table: Russia Electric Power Transmission And Distribution Losses Data And Forecasts, 2010 - 2016 ............................................................ 23
Table: Russia Electric Power Transmission And Distribution Losses Long-Term Forecasts, 2010 - 2016.......................................................... 23
Table: Russia Trade Forecasts, 2010 - 2016...................................................................................................................................................... 23
Table: Russia Trade Data Long-Term Forecasts, 2015 - 2021 ............................................................................................................................ 23
Key Policies/Market Structure...................................................................................................................... 25
Regulation And Competition............................................................................................................................................................................... 25
Sustainable Energy Policies................................................................................................................................................................................ 25
Pricing ................................................................................................................................................................................................................ 26
Key Projects Database............................................................................................................................................................................................. 27
Table: Key Projects............................................................................................................................................................................................. 27
Power Risk/Reward Ratings ......................................................................................................................... 30
Central and Eastern Europe Regional Power Risk/Reward Ratings........................................................................................................................ 30
Table: CEE Power Risk/Reward Ratings (Scores Out Of 100) ............................................................................................................................ 33
Russia’s Power Risk/Reward Ratings ................................................................................................................................................................. 33
Rewards .............................................................................................................................................................................................................. 33
Risks.................................................................................................................................................................................................................... 34
Competitive Landscape ............................................................................................................................... 35
Enel..................................................................................................................................................................................................................... 36
Company Profiles ......................................................................................................................................... 38
E.ON................................................................................................................................................................................................................... 38
Inter RAO UES ................................................................................................................................................................................................... 46
Glossary of Terms ........................................................................................................................................ 48
Table: Glossary of Terms.................................................................................................................................................................................... 48
Methodology And Sources ........................................................................................................................... 49
Industry Forecasts ................................................................................................................................................................................................... 49
Power Industry - Data Methodology................................................................................................................................................................... 50
Russia Power Report Q4 2012
© Business Monitor International Ltd Page 4
Generation and Consumption Data .................................................................................................................................................................... 50
Electricity Generation Capacity Data................................................................................................................................................................. 51
Power Risk/Reward Ratings Methodology............................................................................................................................................................... 51
Table: Power Risk/Reward Indicators ................................................................................................................................................................ 53
Sources ............................................................................................................................................................................................................... 55