(MENAFNEditorial)
The risks to our already-subdued outlook for the Russian economy - and by extension demand for power - remain firmly to the downside for 2014. Investor confidence has been damaged by the Ukraine crisis and we expect FDI in the power sector to slow. An electricity tariff freeze and retaliatory measures against Western thermal power turbine-supply companies further darken the outlook for investment.
The outlook for domestic demand in Russia is bleak as tensions with the West over the Ukraine crisis weigh on business and consumer confidence. International outrage over the downing of passenger jet MH17 in Ukrainian airspace will heighten negative investor sentiment. Sanctions will ratchet up the pressure on the Russian economy. As such although we have largely maintained our forecasts for electricity generation the risks are to the downside for 2014 and 2015. Domestic power demand is correlated with industrial output in Russia and generation will slump in line with our downbeat real GDP growth forecasts.
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We expect Russia to retaliate to Western sanctions by targeting specific Western companies and restricting their operations in Russia but this will fall short of intentionally disrupting energy exports to the West. In the power sector we do not expect an exodus of foreign-owned power companies but we do expect them to repatriate any profits rather than reinvest in assets during this period of volatility. This will hamper Russia's much needed efforts to replace aging capacity and grid infrastructure.
Furthermore we were already anticipating that capital spending by foreign companies such as Italy's Enel and Germany's E.ON would fall in 2014 - once they meet their government-mandated power plant investment targets (which are decided on the basis of government-led capacity supply agreements). There is certainly scope for any further capital expenditure plans to be put on hold and for a prolonged hiatus of foreign direct investment (FDI).
The Russia Power Report features Business Monitor International (BMI)'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.
Regional Overview
The Regional Overview provides a comparative context from within which one can assess the relative profitability of the power industry in a given country incorporating BMI's country risk macro forecasts into our regional analysis. They also detail any relevant issues or events that might cause market fluctuations as well as evaluate the impact of existing power infrastructure and fresh investments on the regional market.
BMI Industry Forecasts
The Industry Forecasts provide historic data series and forecasts to end-2018 for electricity generation (TWh) and electricity generating capacity (MW) for each individual power segment present in the country. These forecasts are in turn supported by explicit assumptions in conjunction with analysis of the key risks to the main forecast. These in turn are broken down into:
Electricity Generation forecasts for Thermal Coal Gas Oil Nuclear Hydro and Non-Hydro Renewables. For this section we provide information on electricity generation (TWh) % growth year-on-year KWh per capita and the % of total electricity generation. The thermal fuels (coal gas and oil) also have figures for their % of total thermal electricity generation.
Electricity Generating Capacity offers forecasts for the potential net capacity and net capacity growth % change year-on-year for the whole power industry. It also includes individual forecasts for capacity (MW) capacity growth % change year-on-year and % of total capacity for Thermal Nuclear Hydro and Non-Hydro Renewables.
The section also includes historic data series and forecasts to end-2018 for:
Electricity Consumption encompassing information on net consumption (TWh) net consumption growth % change year-on-year and net consumption per capita (KWh).
Transmission And Distribution Losses comprising predictions on Electric Power Transmission And Distribution Losses (TWh) and Electric Power Transmission And Distribution Losses % of Output.
Electricity Trade offering historical figures for imports and exports and forecasts for net imports (TWh).
Market Overview
This section provides an overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments.
Risk/Reward Rankings
BMI's Power Risk/reward Rankings provide fully comparable rankings aimed at investors (power companies services companies and equity investors) in the regional power market. The rankings methodology makes sophisticated use of various industry economic and demographic data points and is part of BMI's integrated Country Risk-Industry Rankings products.
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