Oleg Deripaska is again looking for cheap kilowatts

UC Rusal continues to seek exclusive operating conditions on the energy market for its aluminum assets. Now, for the first time, the company has begun to demand benefits for profitable Siberian plants. As Kommersant has learned, Rusal is asking the government for permission to create a block station for the Bratsk Aluminum Smelter based on the 2 GW capacity of the Bratsk Hydroelectric Power Plant. This will allow Rusal to reduce the price of electricity, but will cost Siberian consumers 3 billion rubles.

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Drawing: Kommersant / Viktor Chumachev

Photo: Kommersant / Alexander Miridonov / buy photo

Oleg Deripaska's Rusal wants to reduce the price of electricity for the Bratsk Aluminum Smelter (BrAZ) with a capacity of 1 million tons of aluminum per year. To this end, Rusal proposed to allow about 2 GW of the 4.5 GW capacity of the Bratsk Hydroelectric Power Plant (BHPP, owned by Irkutskenergo, also controlled by Mr. Deripaska’s structures) to be allowed to “withdraw” from the wholesale energy market, declaring that these units are, in fact, a block -station (that is, a power plant operating for a specific industrial consumer) BrAZ, a source in government agencies told Kommersant. This was confirmed by a Kommersant source close to Mr. Deripaska’s energy assets. This topic will be discussed today at a meeting with Deputy Prime Minister Arkady Dvorkovich, who oversees the fuel and energy sector, according to Kommersant sources familiar with the meeting agenda. One of Kommersant’s interlocutors adds that the Deputy Prime Minister “supported the scheme in principle.”

A representative of Mr. Dvorkovich told Kommersant that such a meeting is not planned in his schedule. But it has happened before that the Deputy Prime Minister had meetings that were not scheduled in advance. Rusal, Irkutskenergo and Inter RAO (owns 40% of Irkutskenergo) declined to comment.

Now Rusal's Siberian plants buy energy at low tariffs from Irkutskenergo and Krasnoyarsk Hydroelectric Power Station, part of Oleg Deripaska's Eurosibenergo, under direct contracts tied to the price of aluminum on the LSE. The average price for BrAZ in 2012 was only 80 kopecks. for 1 kWh. But the benefits from direct contracts have partly decreased since 2011, when Rusal was obliged to compensate other consumers for the difference between the low tariff of hydroelectric power plants and the price for power prevailing on the market.

Legislation requires that stations over 25 MW sell energy on the wholesale market; work with retail consumers requires permission from the regulator (NP Market Council). Permission can be obtained by block stations that are technically integrated into the plant itself.

But the ministries whose opinions Mr. Dvorkovich asked for differed in their assessments of the scheme, Kommersant’s interlocutors say. Thus, according to them, the Ministry of Energy was sharply opposed, since the withdrawal of cheap power from the Bratsk hydroelectric station would lead to an increase in the cost of power in Siberia. This, according to the ministry's estimates, will amount to 3 billion rubles. additional costs for other consumers in this price zone and an increase of 5% in the final price for power.

Kommersant's interlocutor, close to Rusal, noted that block stations are a common practice in Russian metallurgy. According to him, Rusal is actively working to reduce costs and this “will help maintain the profitability of BrAZ,” but the source did not explain how much this will reduce the cost at the plant. According to RAS reporting, BrAZ is quite profitable - 1.4 billion rubles. net profit in 2012. A source familiar with the plans of Rusal and Irkutskenergo notes that the creation of a block station will not entail a change in the legal status of the plant and station.

This is not the first attempt by Rusal to gain a privileged position in the energy market, but previously the company lobbied for a reduction in energy prices only for its unprofitable plants in the European part of Russia. In the fall of 2012, Rusal agreed with Rosenergoatom to supply electricity to the Bogoslovsky Aluminum Smelter (BAZ) at a price of 3 cents per 1 kWh until 2015, which is half the market price. In June, Rusal bought the Bogoslovskaya CHPP, a supplier of steam for the alumina production of BAZ, from Viktor Vekselberg's IES Holding. Rusal is also seeking the sale of the Ondskaya hydroelectric power station (240 MW) in Karelia, owned by TGK-1 Gazprom Energoholding and supplying energy to the Nadvoitsky aluminum smelter. At the same time, Oleg Deripaska actively used lobbying opportunities: for example, agreement in principle on the sale of the Bogoslovskaya CHPP was given in 2011 at a meeting with the participation of Vladimir Putin.

Gazprombank analyst Natalya Porokhova agrees with the calculations of the Ministry of Energy that as a result of the transfer of 2 GW of BHPP capacity to retail, the price of power on the wholesale market in Siberia will increase by 3 billion rubles. But, according to her, this change will have a weaker effect on the final price for consumers, taking into account the network component - a maximum of 1% increase.

Anatoly Dzhumailo, Natalya Skorlygina, Vladimir Dzaguto

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