Vladislav Solovyov, CEO of UC RUSAL, has suggested Economic Development Minister Maxim Oreshkin study a support program for large industrial power consumers that will stimulate industrial production and boost the gross domestic product (GDP).
According to Solovyov’s calculations, industrial consumers pay for excessive power generation, grid capacities, and many types of cross-subsidization with the payments amounting to 800-900 billion rubles a year. An increase of the cost of power by 1% cuts Russia’s GDP by 0.11-0.12% and raises inflation by 0.2-0.45% in annual terms, Solovyov said citing the data of the Russian Academy of Sciences and the National Research University Higher School of Economics.
Large industrial power consumers should be free from payments for renewable power sources and waste-to-energy facilities under capacity supply agreements. Power intensive productions launched from 2019 should also be free from the surcharge to power tariffs in Russia’s Far East during a five-year payback period.
Solovyov suggested eliminating cross-subsidization using the 222 billion rubles that were currently spent on capacity supply agreements and conventional power generation but would be non-existent after 2021. He also suggested prohibiting new cross-subsidization, increasing the existing measures, and creating a plan to terminate cross-subsidization entirely in 10 years.
An Economic Development Ministry representative said that the ministry received the letter and was studying the proposals. Alexandra Panina, chairwoman of the supervisory board of Council of Power Producers, said that RUSAL’s proposals were raw. (Prime/Ukrainian metal)