Deripaska will sell miners of Siberian electricity for a billion rubles

En + Oleg Deripaska's group of companies has begun negotiations with several funds that attract investment in the construction of mining farms. En + Group will offer miners to build their farms near their power plants in Irkutsk, Bratsk and Ust-Ilimsk, said Maxim Sokov, the general director of En + Group, in a commentary to the Vedomosti newspaper.

The deal will be beneficial to both parties. En + Group will increase the utilization of generating capacity and financial income, and the owners of mining farms will receive electricity at a reduced price. The cost of electricity is a significant part of the cost of mining, so the price reduction can significantly increase the profitability of the business. Since the rate of cryptocurrency has fallen, electricity tariffs have become even more important for the level of profitability.

According to En +, in 2018 the miners' aggregate demand for the company's electricity could reach 100 MW. Now the funds are collecting investors for the construction of farms, among them are Chinese and American investors.

The En + Group includes the enterprise of JSC EuroSibEnergo, one of the largest private energy companies in the country in terms of installed capacity. She owns four hydroelectric power stations and eleven CHP in the Siberian region, including:

• Bratsk Hydroelectric Power Plant (4500 MW)
• Irkutsk Hydroelectric Power Station (662 MW) and Thermal Power Plant (665 MW)
• Ust-Ilim hydroelectric station (3840 MW) and CHP (525 MW)

These five sites are offered to host miners.

EuroSibEnergo JSC produces about 8% of all electricity in Russia (about 90 billion KWh). Now the electricity goes to other enterprises of Deripaska - the Krasnoyarsk Metallurgical Plant, UC RUSAL (Russian Aluminum) plants and other consumers. But the excess generating capacity of the hydroelectric station and CHP probably still remain. Therefore, cooperation with miners will be very helpful. “This step will allow En + to diversify its client portfolio,” said CEO Maxim Sokov.

En + Group can earn about 980 million rubles from the sale of electricity to miners in 2018, if we estimate this 100 MW at 2017 prices.

According to Vedomosti, in December 2017, the average price of electricity in the Russian Federation ranged from 2.69 to 3.89 rubles / kWh. The investment manager of the fund Runa Capital believes that miners can be attracted to Siberia if the tariffs do not exceed 2 rubles / kWh.