Inter RAO

Inter RAO does not have any public emissions reduction targets, which means it cannot demonstrate to its stakeholders that it is considering climate change in its strategy. Any emissions reduction targets it sets should include intermediary targets to incentivise management to take short-term action as well as long-term targets (2050) to enable strategic consideration of the lifetime emissions of new generation assets. Inter RAO’s emissions intensity is currently expected to decline from 580 gCO2e/kWh in 2018 to 555 gCO2e/kWh in 2023. This decrease is far less than that required by its well-below 2-degree pathway, which requires a fall to 493 gCO2e/kWh by 2023.

Inter RAO recently joined the UN Global Compact, a voluntary initiative based on CEO commitments to implement universal sustainability principles and to take steps to support UN goals. The company can demonstrate its commitment is credible by developing a low-carbon transition plan. This should be informed by climate scenario analysis, in order to establish how it will finance its transition and quantify what its low-carbon generation portfolio is likely to look like. It should also include targets for reducing emissions and increasing low-carbon electricity generation, such as renewables or nuclear, as well as suitable new low-carbon business models, for example providing energy services.

Inter RAO does not disclose publicly its R&D expenditure on technologies with significant potential to mitigate climate change. Given that the company’s current electricity generation capacity is over 98% coal or gas, it will need to develop new technologies such as hydrogen or carbon capture and storage. The alternative is that a large amount of Inter RAO’s existing fossil fuel infrastructure risks becoming stranded assets, which suffer from premature write-downs or devaluations. This may be driven by more stringent climate regulation or lack of access to capital, as the financial sector moves away from fossil fuels.

Inter RAO does not have any emissions reduction targets or low-carbon generation targets. Its strategic priorities do not recognise the need to transition to a low-carbon economy. It has committed to making 6.7 GW of its fossil fuel capacity more efficient and reliable by 2025, as part of the Russian government’s modernisation programme.

Inter RAO does not have a public low-carbon transition plan and shows no intention of increasing renewable or nuclear generation. The company’s Energy Conservation and Energy Efficiency Improvement Programme aims to reduce emissions by improving fuel efficiency, but this will not ensure long-term decarbonisation.

Inter RAO is continuing to expand its fossil fuel generation, for example in the Vostok Oil project. It is developing a new 195 MW coal plant, Primorskaya TPP. It recently joined the UN Global Compact and considered climate risks in its 2019 annual report for the first time.

A small reduction in emissions intensity was achieved, from 587 gCO2e/kWh in 2013 to 580 gCO2e/kWh in 2018, as the result of increasing the efficiency of power plants. Inter RAO also sold its 50% stake in a 1 GW coal power plant in 2019. However, these actions are insufficient to achieve low-carbon transition.

Inter RAO does not have a plan to transition to the low-carbon economy. While its emissions may fall slightly in the short term through efficiency upgrades, long-term decarbonisation will require the company to invest in low-carbon generation and technologies.