Annual Report 2015

Transmission and Distribution of Electric Power

Commentary-interview of the Deputy Director General for Transport and Electric Power Metering V. A. Kimerin

How would you describe the situation with electric power consumption in the Moscow area?

The Moscow area is characterized by dynamic growth and development; therefore, growth of electric power consumption is observed annually. The output to the grid over the period of economic stability from 2012 to 2014 was increasing steadily at the rate of 1.5%. In 2014, the growth slowed down to 0.62%; and according to the operation results of 2015, the volume of power output to the grid dropped by 1.29% relative to 2014. The lower power output to the grid (net power supply) was caused by reduction in electric power consumption.

Lower consumption was observed due to the following reasons:

  • slowdown of production rates;

  • relocation of large companies to other regions (Constitutional Court of the Russian Federation, PJSC “Gazprom”);

  • absence of demand for residential housing (both renting and acquisition). The earning power of rented apartments in Moscow is the lowest among other Russian cities with a million-plus population (4.6%), according to RBC);

  • relocation of production facilities from Moscow to other regions (including furniture factories, liquidation of industrial zones which were previously located within Moscow boundaries);;

  • change of migration policy in relation to the CIS countries (outflow of immigrants);

  • implementation of the Moscow Government Program for small retail businesses.

The electric power consumption in Moscow dropped by 2.41% against the previous year to 45.2 bln kW•h.

The electric power consumption in Moscow region in 2015 was 42.4 bln kW•h, which matches the level of 2014. Better situation in the region is explained by the high growth rates of electric power consumption by the population due to intensive construction of new residential buildings and villa communities in Moscow region.

How will the demand for electric power change over the next few years?

Considering that small and medium businesses have already implemented their own Energy-Saving Programs in accordance with Federal Law No. 261-FZ dated November 23, 2009 On Energy-Saving and Improvement of Energy Efficiency and on Amendment of Certain Russian Federation Legal Acts and considering the overall slow-down of growth rates due to the economic crisis, the Company’s Business Plan provides for the annual energy consumption growth in 2016-2020 at the level of 0.26%. The losses are expected to decrease from 7.75% in 2016 to 7.09% in 2020. The growth of net supply in 2016 and further in 2017-2020 will be achieved due to considerable reduction of electric power losses.

Over the year 2015, the volume of electric power transmission to consumers was 70,533 mln kW•h. Compared with the actual indicators for 2014, the volume of delivered power transmission services decreased by 1,351 mln kW•h or 1.9%.

The volume of net supply by PJSC MOESK according to uniform tariffs in 2015 relative to 2014 decreased by 3.62% in Moscow and by 0.27% in Moscow region, which is explained by economic stagnation, low business activity and, as a result, reduced volumes of power consumption as well as abnormal temperature in December 2015. Considerable drop in the net supply according to the uniform tariffs in Moscow is associated with transfer of electrical facilities owned by state unitary enterprise “Mossvet” to JSC UEC under a leasing agreement. However, despite the considerable reduction of net supply to industrial consumers (by 4.2%) and non-industrial consumers (by 3.8%), the overall growth dynamics of net supply to consumers is positive for the Company.

Results and Forecast of Electric Power Balance Indicators

Category 2013 2014 20152016* 2015/2014
Electric power output to the grid, mln kW•h 88,215 88,765 87,61888,160 -1.3
Electric power output from the grid to consumers and associated LGOs within the limits of balance and operation responsibility, mln kW•h 80,133 80,980 80,12781,328 -1.1
Losses, % of output to the grid 9.16 8.77 8.557.75 -0.2
Losses, mln kW•h 8,082 7,785 7,4916,832 -3,8
For reference:         
Volume of electric power transmission to consumers (boiler net power supply according to uniform tariffs), mln kW•h 71,412 71,884 70 53371,315 -1.9
* Business plan for 2016 was approved at the meeting of the Board of Directors on December 10, 2015 (minutes No. 271 dated December 11, 2015).

Electric Power Losses Incorporated into Tariff and Balance Resolution and Business Plan

Description Regulatory losses Business plan Actual Actual/ regulatory losses Actual/Business plan
mln kW•h 7,927 7,617 7,491 -5.50% -1.65%
% 8.93 8.55 8.55 -0.38 pp 0 pp

Structure of Power Transmission Service Volumes with Breakdown to End Consumer Groups

Structure of Power Transmission Service Volumes with Breakdown to Voltage Levels, mln kW•h (total)

According to the operation results of PJSC MOESK, the volume of electric power output to consumers and associated LGOs within the limits of balance and operation responsibility in 2015 was 80,127 mln kW•h, which is 853 mln kW•h or 1.05% lower than in 2014 (80,980 mln kW•h). The decrease in the net supply was mainly caused by reduction of power consumption volumes due to the economic situation in the country, which affected Moscow on a larger scale. Additionally, abnormally warm weather in Moscow region also contributed to reduction of power consumption. The average annual ambient air temperature in 2015 was 0.85° higher than in 2014 (7.94° and 7.09° respectively).

The actual losses of electric power in the electrical grids of PJSC MOESK were 7,491 mln kW•h or 8.55% of the output to the grid. Compared with the same period in 2014, decrease in the output to the grid by 1.29% resulted in decrease in electric power losses by 193 mln kW•h or 0.22 pp.

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