Russia Power Report

Published 09 February 2015

  • 87 pages
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$1,295.00
Russia Power Report

BMI View : There is little to like about the Russian utilities market and weak electricity demand, a severe economic contraction and tightening credit conditions will weigh on domestic and foreign power companies over 2015. Ratings downgrades and aggressive monetary tightening will heighten financing costs for domestic players, while foreign companies will repatriate profits rather than invest capital.

The outlook for domestic and foreign utilities operating in the Russian power market is bleak and the operating environment will become increasingly challenging over 2015. Our Country Risk team expect Russian real GDP to contract by 5.6% in 2015 as a consequence of credit market tightness and elevated inflation - a result of the sharp Russian rouble sell-off at the end of December 2014. This will present significant challenges for domestic utilities such as Inter Rao, RusHydro, Gazprom and Rossetti, as well as foreign firms like E.ON and Fortum, which have domestic subsidiaries.

The impact of the steep losses suffered by the Russian rouble - due to plunging oil prices and US sanctions - will take some time to unwind. We cannot identify any drivers of rouble strength (apart from a rebound in oil prices) over the coming quarters, which underpins our recessionary stance. This means there is limited upside to our outlook for the Russian economy - and by extension the power market and electricity demand growth. Domestic electricity demand remains highly correlated with industrial output in Russia and, as such, we are forecasting electricity generation will contract 1.0% in 2014 and 0.8% in 2015.

We warn weak electricity demand could feed through into lower capacity payments in some of Russia's wholesale electricity pricing zones - weighing on the margins of utilities that have capacity in those zones. We have already highlighted that a two-year freeze in electricity tariffs will have an impact on earnings as inflation surges.

We do not expect an exodus of...

Table of Contents

BMI Industry View
7
SWOT
9
Industry Forecast
12
Russia Snapshot
12
Table: Country Snapshot: Economic And Demographic Data (Russia 2013-2018)
12
Table: Country Snapshot: Economic And Demographic Data (Russia 2018-2023)
12
Table: Country Snapshot: Power Sector
12
Russia Power Forecast Scenario
13
Electricity Generation And Power Generating Capacity
13
Table: Total Electricity Generation Data And Forecasts (Russia 2012-2017)
13
Table: Total Electricity Generation Data And Forecasts (Russia 2018-2023)
14
Table: Electricity Generating Capacity Data And Forecasts (Russia 2012-2017)
16
Table: Electricity Generating Capacity Data And Forecasts (Russia 2018-2023)
16
Electricity Consumption
31
Table: Total Electricity Consumption Data And Forecasts (Russia 2012-2017)
31
Table: Total Electricity Consumption Data And Forecasts (Russia 2018-2023)
31
Transmission & Distribution, Imports & Export
33
Table: Electric Power T&D Losses Data And Forecasts (Russia 2012-2017)
33
Table: Electric Power T&D Losses Data And Forecasts (Russia 2018-2023)
33
Table: Trade Data And Forecasts (Russia 2012-2017)
33
Table: Trade Data And Forecasts (Russia 2018-2023)
33
Industry Risk/Reward Ratings
37
CEE Power Risk/Reward Index
37
Table: CEE Power Risk/Reward Index (Scores Out Of 100)
42
Russia Power Risk/Reward Ratings
43
Rewards
43
Risks
43
Market Overview
45
Key Policies And Market Structure
45
Regulation And Competition
45
Sustainable Energy Policies
46
Pricing
47
Russia Power Projects Database
50
Table: Major Projects - Power
50
Competitive Landscape
56
Federal Grid Company (FGC)
56
Inter RAO UES
57
Gazprom Energoholding
57
E
58
Enel
59
Company Profile
60
E
60
E
62
Inter RAO
73
Regional Overview
77
CEE Power Regional Overview
77
Glossary
84
Table: Glossary Of Terms
84
Methodology
85
Industry Forecast Methodology
85
Sources
88
Risk/Reward Index Methodology
88
Table: Power Risk/Reward Index Indicators
89
Table: Weighting Of Indicators
90

The Russia Power Report features BMI Research's market assessment and independent forecasts covering electricity generation (coal, gas, oil, nuclear, hydro and non-hydro renewables), electricity consumption, trade, transmission and distribution losses and electricity generating capacity.

The Russia Power Report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing national and multinational operators by sales, market share, investments, projects, partners and expansion strategies.

Key Benefits

  • Use BMI's independent industry forecasts for Russia to test other views - a key input for successful budgeting and strategic planning in the power market.
  • Target business opportunities and risks Russia's power sector through our reviews of latest power industry trends, regulatory changes, and major deals, projects and investments in Russia.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Competitive Landscape analysis.

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts, views and trend analysis, covering power markets, regulatory changes, major investments, projects and company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the power sector and within the broader political, economic and business environment.

BMI’s Power Forecast Scenario

Forecasts to end-2024 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:

  • Generation: Electricity generation total, thermal, coal, natural gas, oil, nuclear, hydropower, hydro-electric pumped storage and non-hydropower renewables.
  • Transmission and Distribution Losses: Electric power transmission and distribution losses.
  • Trade: Total imports and exports.
  • Electricity Consumption: Net consumption.
  • Electricity Capacity: Capacity net, conventional thermal, nuclear, hydropower and non-hydroelectric renewables.

BMI’s Power Risk Reward Index

BMI’s Risk Reward Indices provide investors (power companies, service companies and equity investors) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors,

Market Overview

Structure, size and value of the industry sector; overview of the industry landscape and key players; an assessment of the business operating environment, sustainable energy policies, pricing and the latest regulatory developments.

Key Projects Database

Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by location, sector type, capacity, value, companies and operational status.

Competitive Landscape

Illustration of the power industry that exploits our data-rich, in-depth analysis of the leading players in the sector and examination of operational results, strategic goals, market position and the potential for investment.

Power Outlook long-Term Forecasts

Regional long-term power forecasts covering electricity generation, consumption and capacity for thermal, hydroelectric and nuclear power. These are supported by a country specific  overview, alongside an analysis of key downside risks to the main forecasts.

Regional Overview

Providing BMI’s near-term economic outlook for the region as a whole, as well as taking a close look at countries of particular interest and the latest trends and developments.

Sources

The Power Market Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports, including Energy Information Administration (EIA), World Bank (WB) and United Nations (UN).

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc