Inter RAO is going to increase the profitability of electricity supplies to China

Russian operator of electricity export-import “Inter RAO» proposed to increase the profitability of its electricity supplies to China at the expense of consumers of the Far East energy system, writes “Kommersant”.

The regulator artificially limits the marginality of electricity sales to China at 5%, and the remaining funds are used to reduce tariffs in the Far East. From October 1, the duty is 7%, which makes supplies for “Inter RAO“unprofitable,” the material says.

The development of changes to regulate the profitability of supplies was confirmed by Inter RAO itself. According to the newspaper, the idea was supported by the Ministry of Energy, and Deputy Energy Minister Pavel Snikkars explained in a letter to the head of the department, Alexander Novak, that increasing profitability would allow maintaining and possibly increasing energy supplies to China.

On October 2, the operator introduced partial restrictions on electricity supplies to China. reported “Vedomosti” in the company. Wherein “Inter RAO» continues to supply electricity to Mongolia, as the authorities agreed to increase the price. September 28 reportedthat the company is ready to limit or completely stop supplies outside the EAEU from October 1, including to China and Mongolia, as well as Azerbaijan and South Ossetia.

In the first half of 2023 “Inter RAO» decreased net profit under IFRS by 12% to RUB 67.8 billion. EBITDA decreased by 13.8% to RUB 88.4 billion. In the second quarter, Inter RAO received EBITDA in the amount of 34.66 billion rubles. (+1.85% compared to the same period in 2022)

August 30, Chairman of the Board of the Company Boris Kovalchuk statedWhat “Inter RAO“expects a reduction in EBITDA and net profit at the end of 2023. According to him, the decline will be approximately the same as in the first half of this year.