New Life for Gas-Fueled Power Plants?

Ukraine’s Energy Ministry has proposed a barter arrangement with Russia’s Inter-RAO-UES, the Russian state company that deals with international trade of electricity, in which Inter-RAO-UES would supply natural gas to the gas-fueled power units of Ukrainian thermal power generators (GenCos) which would in turn export electricity to Russia. Alexander Paraschiy: The crucial question for this proposal is whether Inter-RAO-UES could get permission to independently export Russian gas to Ukraine and at what price. Currently, all eight of the gas-fueled power units operated by GenCos are idle due to high gas prices, including 3 GW of capacity at Centrenergo (CEEN: HOLD) and 2.4 GW at Dniproenergo (DNEN: BUY) (see our report on GenCos of June 26 and our desknote on Centrenergo of Jan. 3). If this deal is realized it would certainly breathe new life into these power units, but the potential economic effect for CEEN and DNEN from the project is hard to judge, as it is unclear how much profits would be made from the new business and who would get them.