The key objectives of Federal Grid’s investments are to modernise and enhance the reliability of the unified energy system to ensure uninterrupted electricity supply to consumers. As part of its investment activities, the Company is currently implementing projects on construction of new facilities of the electric grid infrastructure and upgrade of existing ones.
HOW CAN THE CURRENT ECONOMIC ENVIRONMENT IN THE COUNTRY INFLUENCE THE IMPLEMENTATION OF THE INVESTMENT PROGRAMME?
“The approved investment programme for 2016–2020 has been developed with due consideration of the current economic environment, the need to maintain the Company’s financial stability at the existing level under high volatility of financial and currency markets, much more expensive borrowings and payment discipline deterioration.
As compared to the earlier approved investment programme for 2015–2019, there are some changes in funding of certain facilities to develop the electric grid infrastructure in Eastern Siberia and Far East, addressing also the expansion of the Baikal-Amur Mainline (BAM) and the Trans-Siberian railway, as well as changes in the required financing of the connection of electricity receivers of the Skolkovo Innovation Centre”.
KEY OBJECTIVES OF FEDERAL GRID’S LONG-TERM INVESTMENT PROGRAMME
- Maintain the reliable operation of the Unified Energy System to assure uninterrupted electricity supply to consumers
- Assure electricity supply to the facilities of national importance
- Ensure the high quality of electricity transmission and consumer connection services and access thereto
- Improve the efficiency of backbone electric grids through cost reduction and energy efficiency programmes
- Synchronise the development of generation facilities and distribution grids
- Establish an efficient system of management of Federal Grid’s operations with the view to improve the observability of grid facilities
- Ensure uninterrupted electricity supply in the conditions of separate functioning of the Unified Energy System of Russia and the Integrated Power System of Ukraine
Investment Trends, RUB billion
Federal Grid’s Capacity Commissioning Trends
Capital Investment Structure in 2015 (by financing), RUB billion
Long-Term Investment Programme
Federal Grid’s investment programme for 2016–20201 was developed in the conditions of current economic situation characterised by much more expensive borrowings, less accessible financial markets, inflation escalation, currency rate increase and consumer non-payments.
Total planned investments in 2016–2020 reach RUB471.1 billion to be spent on commissioning of 44.3 thousand MVA of capacity and 11.8 thousand km of transmission lines as Company’s fixed assets.
The 2016–2020 investment programme is supposed to be financed with the use of Federal Grid’s own funds, bonds, loans and federal budget resources. The programme provides even distribution of investment costs over the 5-year period that enables the Company to maintain a balanced structure of its sources of funding.
Federal Grid’s Capital Investments by Project in 2016–2020, RUB billion
Structure of Federal Grid’s Capital Investments, RUB billion
| Managing capital construction quality |
|---|
| As regards management and control of the quality of capital construction, Federal Grid issued Resolution No. 428 dated 29 November 2015 “On approval of the Regulation for interaction of Federal Grid’s branch ‘Technical Supervision Centre’ and structural units of its Executive Office, branches and subsidiaries in the course of technical supervision”. The Construction Supervision and Industrial Safety Department of the Engineering and Construction Supervision Centre of the UES of Russia and certain units of its branches organise and perform the construction supervision at constructed and reconstructed facilities. There was no independent third-party’s construction supervision at Federal Grid’s facilities in 2015. |
| Specialists that performed construction supervision at Federal Grid’s facilities in 2015 | ||
|---|---|---|
| Total number of employees | 132 | |
| Employees with higher education | 127 | |
| Employees with the following length of service in the electric enegry sector: | ||
| above 5 years | 89 | |
| 3–5 years | 24 | |
| below 3 years | 19 | |
Overall, the 2016–2020 programme has been optimised to address the completion of electric grid facilities that construction was started before, on the one hand, and to be able to finance new investment projects under current economic conditions, on the other.
In pursuance of the Development Strategy of the electric grid complex of the Russian Federation approved by the RF Government resolution No. 511-r dated 03 April 2013 and with regard to meeting the target for 30% reduction in unit investment costs against a 2012 baseline by 2017, Federal Grid Company implemented a set of measures aimed at reducing investment costs and then contractually engaged an independent advisor, PricewaterhouseCoopers Advisory Services LLC, to assess the effectiveness of the above measures. Within the framework of the contract No. MOS-ADV-PI-204/16 dated 13 January 2016, an assessment was made of the unit costs reduction under the Federal Grid’s investment projects launched in 2015 in terms of the compliance with the above mentioned Development Strategy of the electric grid complex. According to the consultant’s report:
- Average actual unit investment costs per1 km of transmission lines reduced by 25.6% in 2015
- Average actual unit investment costs per 1 MVA of transformer capacity reduced by 35.6% in 2015
Structure of 2013–2015 investment programme financing sources
| Sources of financing | Amount of financing, RUB mln |
|||
|---|---|---|---|---|
| 2013 | 2014 | 2015 | ||
| 1 | Own funds | 86,794 | 54,219 | 46,088 |
| 1.1. | Profit allocated to investments | - | 89 | 2,831 |
| 1.2. | Depreciation | 68,506 | 54,130 | 42,729 |
| 1.3. | VAT refund | 7,217 | - | - |
| 1.4. | Other own funds | 10,401 | - | 528 |
| 1.5. | Technological connection fee | 670 | - | - |
| 2 | Borrowings | 62,902 | 36,638 | 39 801 |
| 2.1. | Credits | - | - | - |
| 2.2. | Bond loans | 60,000 | 35,784 | 39,801 |
| 2.3. | Loans of organisations | - | - | - |
| 2.4. | Government funding | 2,902 | 854 | - |
| 2.5. | Funds of external investors | - | - | - |
| 2.6. | Lease financing | - | - | - |
| 2.7. | Other borrowings | - | - | - |
| TOTAL | 149 696 | 90,857 | 85 889 | |
Key Investment Projects
Federal Grid’s investment programme covers the construction and reconstruction of energy infrastructure for projects of national significance, oil transportation projects and development programmes for Russia’s regions. We fully realise the importance of such projects and endeavour to construct and upgrade grid facilities on schedule and to the highest standards.
Development of electric grids in Yakutia
The construction of the 220 kV Neryungrinskaya HPP – Nizhny Kuranakh – Tommot-Maya OHL and the substations in Tommot and Maya is still in progress.
In 2011–2015, 709.6 km of transmission lines were commissioned. It is planned to commission in subsequent years. The full cost of construction amounts to RUB19.3 billion. The project completion (final commissioning of 158 MVA of transformer capacity and 45.5 km of transmission lines) is scheduled for 2016.
To ensure parallel operation of the IPS of Siberia and the IPS of the East it is planned to construct the Amur transformer complex at the Khani substation.
Development of energy infrastructure for oil transportation (ESPO – I, II)
The project provides for construction and upgrade of the Federal Grid’s electric grid infrastructure in Siberian and Far-Eastern Federal Districts. The project objective is to meet the electricity demand of facilities of Expansion Phase I and II of the Eastern Siberia-Pacific Ocean pipeline.
The action plan for this electric grid construction and reconstruction project covers 11 facilities for the total value of RUB21.95 billion. It is planned to commission 972MVA of transformer capacity and 612.76 km of transmission lines.
Programme to contain the fallout from the accident at the Sayano- Shushenskaya HPP
Federal Grid’s investment programme provides for construction of the 668 MVA substation ‘Voskhod’ and 40.97 km of overhead lines, which commissioning is scheduled for 2016.
On the whole, our Company has commissioned 501 MVA of transformer capacity and 632 km of transmission lines under the Sayano-Shushenskaya HPP Restoration Programme.
The commissioning of the 500kV transit line will assure energy security, greatly enhance the integrity of the UES of Russia and concurrently reduce the transmission of electric power and capacity via the Republic of Kazakhstan and respective Federal Grid’s expenditure on KEGOG transit services.
Actions to implement power transit via the Kurgan – Ishim – Voskhod connection enabled to increase the reliability of electricity supply to consumers of the Omsk grid and the south of Tyumen oblast and increase flows between the IPS of Siberia and the IPS of Ural up to the maximum allowable level.
Compensatory measures for separate operation of the Unified Energy System of Russia and the Integrated Power System of Ukraine
To ensure reliable power supply to the north-western part of the Rostov grid, Federal Grid’s investment programme provides for installation of a 125 MVA autotransformer at the Pogorelovo substation and construction of a 95.3 electricity transmission line between the cities of Shakhty and Donetsk (Rostov Oblast). The work is on track and the commissioning of these facilities is scheduled for 4th quarter 2016.
Improvement of the access to the Krasnodar Krai electric grid infrastructure
One of the most important objectives at the level of regional infrastructure is to provide the technological connection for consumers in Krasnodar, including a large-scale housing construction project.
On 24 February 2015, the Krasnodar Krai Administration and Federal Grid signed a Cooperation Agreement for 2015–2020, which serves as the basis for construction of the Eastern Promzona substation in Krasnodar. The commissioning of 560 MVA of capacity is scheduled for 2017. The cost of this investment project amounts to RUB2.4 billion.
To provide the technological connection to applicants it is planned to construct a 220kV Novo-Labinskaya sub-station with 220kV OH L approach lines with the total cost of construction of RUB1,150.51 million. The commissioning of 250 MVA of capacity is scheduled for 2018.
Guaranteed supply of generated electricity
The long-term investment programme provides for construction of electricity supply and distribution facilities for currently commissioned NPPs, HPPs and CHPs. Now power distribution and delivery facilities are being constructed for Novovoronezhskaya NPP-2, Leningradskaya NPP-2, Rostovskaya NPP, Nizhnebureyskaya HPP, Zelenchukskaya PSPP, Volzhskaya’HPP, Huadian – Teninskaya CHP, and Zagorskaya PSPP.
To supply electricity generated by power plants, it is planned to commission 953.63 km of transmission lines and 1,127 MVA of transformer capacity in 2016–2020.
Development of the electric grid infrastructure in the area of BAM and TransSib
Pursuant to RF President’s Instructions No. Pr-955 dated 29 April 2014 and No. Pr-1488 dated 24 June 2014, Federal Grid’s investment programme for 2016–202 provides for implementation of the macro-project nearby BAM and TransSib.
It is necessary to invest in aggregate RUB128.33 billion into construction and reconstruction of 21 UNEG facilities in order to meet the prospective BAM and Transsib demand.
The technical upgrade and reconstruction, as well as construction of new facilities will increase the transformer capacity by 4,124 MVA and the length of electricity transmission lines by 4,215.34 km.
Ensuring reliable operation of the Unified Energy System of Russia separately from the energy systems of the Baltic States (BRELL macroproject)
To ensure reliable operation of the UES of Russia upon separation from with the power grids of the Baltic States, the investment programme contains a set of measures designed to compensate the consequences of transmission capacity reduction in connections of the IPS of Centre and the IPS of the Northwest as parts of the UES of Russia and changes in operating modes of the BRELL energy ring, including the reconstruction of the Talashkino substation, upgrade of existing emergency control systems at the Leningradskaya, Chudovo and Pskov substations, construction of the Novosokolniki – Talashkino, Leningradskaya – Belozerskaya, Pskov – Luzhskaya overhead lines and 330 kV OH L approach lines to the Kingisepskaya substation.
“Power of Siberia” gas transportation system
The Power of Siberia, which is currently constructed by Gazprom, will become a unified gas transportation system for gas production centres in the Republic of Saha (Yakutia) (Chyandinskoye oil and gas condensate field) and Irkutsk Oblast (Kovyktinskoye field) that will transport gas from the above gas production fields via Khabarovsk to Vladivostok, and to China as well.
It is planned to supply 61 billion m3 of gas annually, including the export to China of 38 billion m3 per annum and also to the Amur gas processing and gas-derived chemicals integrated plants
Nowadays, Federal Grid is involved in the review of design documentation on the out-of-phase scope for external electricity supply of the Amur gas processing and gas-derived chemicals integrated plants (projected demand –245 MW and 320 MW, respectively) developed by the design institute “ENERGOSETPROEKT” upon request of GEKh Engineering.
The table with basic parameters of key
investment projects is available in
Appendix 1
to the Annual Report
Adjustment of the 2016–2020 Investment Programme
Following the implementation of Federal Grid’s investment programme in 2015, and in accordance with the Rules for approval of investment programmes for electric power entities where the state is a shareholder and for grid companies” approved by the Resolution of the Russian Government No. 977 dated 1 December 2009, a draft adjustment of the Federal Grid’s investment programme for 2016–2020 was developed.
Major draft adjustments of the 2016–2020 investment programme
| 2016, target |
2017, target |
2018, target |
2019, target |
2020, target |
Total | |
|---|---|---|---|---|---|---|
| Total funding, RUB million | 99,000 | 98,100 | 107,655 | 91,012 | 94,301 | 490,068 |
| Capacity to be commissioned, thousand MVA |
9.4 | 9.7 | 10.8 | 8.1 | 6.9 | 44.9 |
| Transmission lines to be
commissioned, thousand km |
1.4 | 1.3 | 3.3 | 2.5 | 3.4 | 11.9 |