Electricity transmission

^{* The increased electricity losses were caused by changes in UNEG operational mode in 2015.
** In accordance with Order No. 1024 dated 25 December 2015 issued by the Russian Ministry of Energy.}

The core activity of Federal Grid Company is the electricity transmission through the Unified National Electric Grid (‘UNEG’). This business accounts for 92% of the Company’s revenue.

In accordance with Russian laws, Federal Grid Company’s services of electricity transmission via UNEG are monopoly operations regulated by the State.

The cost of electricity transmission services is based on tariffs that are set by the Russian Federal Anti-Monopoly Service (FAS) and includes:

• The cost of electricity transmission for the maintenance of electric grid facilities that are part of UNEG
  
• The cost of electricity losses in UNEG allowed by the relevant technological standards in the constituent entities of the Russian Federation.

Information about export and import of electricity under contracts between Federal Grid Company and INTER RAO is available in Appendix 1

Federal Grid’s Largest Customers in Terms of Revenue from Electricity Transmission Services, 2015

Reducing Electricity Losses

Actual electricity losses in the Company’s grids in 2015 amounted to 23,478 million kWh. The relative level of 2015 losses was 4.47% of electricity supplied by the grid. As compared to 2014, it increased by 0.34%, or 2,217 million kWh as electricity supply increased by 2.04%. The increase of electricity losses was caused by changes in the operational mode of UNEG in 2015, as well as changes in the load of power stations, redistribution of customers’ load and the commissioning of new equipment in the Company’s grids

The measures to reduce electricity losses for the reporting period were approved as part of the Programme for Energy Saving and Improving Energy Efficiency of Federal Grid Company. They were implemented in three key areas:

• Optimisation of scheme and mode parameters in the process of the running and operational management of electric grids
  
• Cutting of electricity consumption for substation needs
  
• Construction, reconstruction and development of electric grids, and commissioning of energy-saving equipment

As a result of implementing the above measures, electricity losses were reduced in 2015 by 49.4 million kWh.

In 2014–2015, the Federal Grid Scientific and Technical Centre (with participation of JSC Scientific and Technical Centre of UES) conducted a “Study of the Possibility for Reducing Technical Losses during Electricity Transmission via UNEG and the Capacity for Reducing Such Losses.” The document includes the findings of a study of thresholds for process losses of electricity in UNEG for the medium term, with regard of an impact that will be made by actions targeted at the reduction of electricity losses during the transmission, and plans for the development of electric grids.