Profitability of investment projects in the electric power industry grows following OFZ yields

The profitability of investment projects in the power industry may increase to a maximum level over the past seven years due to the growth in the yield of government bonds, analysts predict. The total revenue of new power plants built under capacity supply agreements, according to consumer estimates, will grow to 523 billion rubles in 2023. In the profile regulator, they consider it incorrect to talk about the record profitability of projects, but do not name their forecasts about the load on the market.

The growth in the yield of federal loan bonds (OFZ) against the backdrop of a budget deficit will lead to record profitability of power plants built under the mechanisms of capacity supply agreements (CDA). At the end of 2023, the actual profitability of thermal CSA power units will be above 15%, which will be the highest level over the past seven years, according to experts from the Center for Economic Forecasting (CEP) of Gazprombank.

New power plants in the Russian Federation are being built under the CSA mechanisms, which guarantee the return on investment in construction through increased energy market payments for the capacity of facilities. The payback period for most CSA facilities is 15 years, and for HPPs and NPPs – 20 years. The actual profitability of projects is determined on the basis of the base value, taking into account fluctuations in the profitability of long-term OFZs. The basic parameter of profitability for HPPs and NPPs is 10.5% per annum, for RES – 12-14%, for thermal power units – 14% per annum.

As a result, payments from the energy market for the energy capacity of CSA facilities will increase. The total payment of the energy market for all types of CSAs in 2022 amounted to 517 billion rubles, calculated in the Community of Energy Consumers (which unites industrial consumers of electricity). In 2023, the figure may grow to about 523 billion rubles, the association predicts. The record growth in profitability and the increase in payments for new CSAs, including renewable energy and the modernization of TPPs, is not so noticeable in the overall increase in payments, since payments for part of the projects of the first CSA TPP program are completed at the same time, they note there. “At the same time, the excess profits of power engineers are practically not associated with an increase in costs, since they are derived from the proceeds from already implemented projects,” the Community of Energy Consumers notes. “Apparently, this will accelerate the pace of cash accumulation in the accounts of generating companies, which an average of about 20% annually and made it possible to form an impressive “cap” of more than 1.5 trillion rubles.

The energy capacity of CSA facilities is the most expensive in the country. For example, in the European part of the Russian Federation and the Urals in 2022, the average price of the capacity of TPPs built under CSA was 1.04 million rubles. for 1 MW, HPPs and NPPs – 1.87 million rubles, and RES – 1.92 million rubles. For comparison: the cost of energy capacity of power plants that have already paid off is 358.4 thousand rubles.

The capacity of CSA TPPs last year amounted to 17.3 GW, and the annual revenue of these facilities exceeded 211 billion rubles, according to the Energy Consumers Community. The CSA facility receives full capacity payment regardless of the load. In 2022, the average CIUM (load indicator) for thermal PDM blocks was 56.6%. About a third of the facilities (5.1 GW) were less than half loaded.

Energy companies will apparently receive high profitability until 2025 inclusive. In 2023-2024, the OFZ rate will remain at a high level to finance the budget deficit while reducing demand from non-residents, experts at the CEP say. At the end of 2022, the average yield of ten-year OFZs was about 9.8% per annum, and at the end of the first half of the current year – 10.45%, says Alexander Yermak from BC Region. The average yield of ten-year OFZs by the end of 2023 may be at the level of 10.25-10.75% per annum, Mr. Yermak predicts.

The Market Council (energy market regulator) did not inform Kommersant of the actual volume of the energy market payment under the CSA for 2022, nor did they disclose forecasts for the volume of payment for 2023. They only reminded that CSA mechanisms have been operating for more than ten years, and economic trends over this period have been multidirectional. “It is impossible to say that at the end of 2022 the maximum OFZ yield has developed since the start of the CSA programs,” the Market Council believes. dynamics of the first five months). The regulator also points out that it is incorrect to talk about a direct relationship between the current OFZ yield and the volume of payments under CSA in a particular year, since many factors affect the dynamics of payments, and first of all, a change in the generation structure – the commissioning of new stations and the cessation of supplies through mechanisms that end its action, such as DPM TPP.

Polina Smertina