The development of Russia’s energy infrastructure requires new mechanisms for attracting investors
Growing electricity
consumption in Russia and new points of economic development require changes in
the structure of generating capacities. New support mechanisms can attract
private investment into the industry, according to experts at the ‘Energy Development:
Who Will Invest?’ session held as part of the Russian Energy Week (REW).
KEY CONCLUSIONS
Energy consumption and industry potential in Russia
are increasing
“Electricity consumption in
the country is growing, and we realize that this is a trend that now has
constant dynamics, especially in a number of federal districts,” Evgeny
Lyapunov, Deputy General Director, Chief Engineer, Rosseti.
“We are now clearly entering
the stage of investment growth in a number of regions, including the East,
Eastern Siberia, and the South. There will probably be other points of
accelerated growth in electricity consumption over time, but the old reserves
of capacity and throughput are no longer available, which means that we need to
build new generating facilities,” Fedor Opadchy, Chairman of the Board, System
Operator of the United Power System.
The quality of investments in the power sector remains
a global issue
“The issue of investment
quality, content and objects [of investment, – Ed.] of investment and
sources of return is the number one issue in the world now, specifically in the
power industry,” Alexandra Panina, Member of the Management Board, Inter RAO;
Chairman of the Supervisory Board, Association “Council of Energy Producers”.
“The goal is to provide
affordable and guaranteed electricity to both domestic and foreign consumers –
we must not forget about export opportunities. Then you start to have
constraints within country policy and domestic policy – this [one of the
constraints, – Ed.] is, of course, low-carbonisation,” Pavel Snikkars,
Deputy Minister of Energy of the Russian Federation.
“When we talk about investment
mechanisms, we need to prioritize,” Alexander Khvalko, Director, Digital Energy
Association.
PROBLEMS
Mechanisms for attracting investors need to be revised
and finalized
“Why don’t these market
mechanisms work in our country? Because there is no stability, we have force
majeure all the time. <...> When everything changes so drastically, the
only correct mechanism is some kind of state guarantee, and that is the CDA
[capacity supply agreement, – Ed.]. But in order to make things easier
for our consumers, I think we need to develop other market mechanisms as well,”
Alexandra Panina, Member of the Management Board, Inter RAO; Chairman of the
Supervisory Board, Association “Council of Energy Producers”.
“The problem is not that there
are no investors, not that there are no mechanisms. Mechanisms exist. But the
economy is a bit out of balance. <...> This requires a rethinking of
government policy: how the energy sector will develop in economic terms.
<...> The need for financing of projects is growing a lot, while the
source is not very clear at the moment. If tariffs are held back, then there
should be some kind of subsidies, state support. Especially for long-cycle
projects. <...> We have very expensive money, and for long projects it
multiplies the final cost many times over,” Fedor Opadchy, Chairman of the
Board, System Operator of the United Power System.
“Our task is to make
competitive trade so that there is an optimal burden on consumers. Again, to do
it quite openly and transparently,” Pavel Snikkars, Deputy Minister of Energy
of the Russian Federation.
SOLUTIONS
Development and introduction of new mechanisms for
attracting investors to create generating capacities
“I understand that the
established market does not want to change, but we have to change, think and
forecast. We already have industrial enterprises that are ready to enter into
investment agreements on certain terms and conditions and reinvest certain
money into the construction of new generation sources without additional burden
on other consumers. It is necessary to introduce new mechanisms for attracting
additional investment in the industry,” Mikhail Khardikov, Operations Director,
En+ Group.
“Let’s come up with new
mechanisms. We are now really thinking about investment agreements. This is a
good topic. <...> Here, of course, the devil is in the details, we still
have a lot to think about along the way,” Maxim Bystrov, Chairman of the Board,
NP Market Council.
“The question is the right
choice of economic model – either it is the state, or the price should allow
the implementation of new projects that we will inevitably have to implement in
order for the energy system to work reliably,” Fedor Opadchy, Chairman of the
Board, System Operator of the United Power System.
Increased focus on the green energy industry
“Investments with colour, i.e.
green investments, are also important now. We are moving forward here too: the
law on generation attributes will come into force in February. We hope this
will create additional cash flow for investors in low-carbon generation,
including nuclear generation,” Maxim Bystrov, Chairman of the Board, NP Market
Council.
“The attributes of low-carbon
generation are a good topic for investment, not only by legal entities but also
by individuals. Such an opportunity exists,” Alexander Khvalko, Director,
Digital Energy Association.
For more information, visit
the Roscongress Foundation’s Information and Analytical System at roscongress.org/en.
The Russian Energy Week International Forum is a key global platform for discussing current trends in the development of the modern fuel and energy sector. This event is traditionally held at the highest level, featuring the participation of leaders from the largest companies in the energy industry. In 2022, more than 70 events, with the involvement of over 270 speakers, were held as part of REW. The Forum attracted over 3,000 participants and media representatives from Russia, as well as 83 foreign countries and territories. The Forum is organized by the Roscongress Foundation and the Ministry of Energy of the Russian Federation, with the support of the Moscow City Government.
Official website of REW: rusenergyweek.com. For news about the event and the industry, please follow the official REW page on VK.
