The Year An Interview with Chairman Electrification in Pictures: of Completed Ins of the State Duma’s Committee some facts from the history and Expected Outs for Energy Ivan GRACHEV of energy posters 14 20 32 Magazine about Russia’s Power Industry ENERGY WITHOUT BORDERS № 6 (31) December 2014 – January 2015 Happy Payments! The industry is anticipating tougher measures against non- payers in the retail electricity market IN RUSSIAN AND ENGLISH peretok.ru ENERGETICS IN RUSSIA AND IN THE WORLD peretok.ru

NETWORKED! Dear readers,

he end of the year is the time to sum up results. One of the un- solved problems of the year of 2014 is the outstanding debt for power supply. As of November 1, the amount owed to guaranteed supply companies in Russia reached 165 billion rubles. At the same time, the guaranteed supply companies have to pay on the wholesale market just in time and are forced to arrange loans to fulfill their obligations. Consumers’ poor payment discipline caus- es payment problems along the entire chain, undermining power companies’ financial stability, while the situation with non-pay- ments adversely affects the industry as a whole. Today, power supply companies do everything possible to get their money from consumers, including sending notices, cutting off electricity supply, filing lawsuits, and, jointly with court bai- liffs, prohibiting debtors from travelling abroad. It is clear that power supply companies will not be able to address this problem independently; this will require a systematic approach at the highest Tlevel. The State Duma is now developing a whole series of amendments to legislation aimed at tightening payment discipline on the retail market. This gives us hope that in 2015, the bulk of the debts will be repaid. These and many other issues are discussed by Ivan GraChev, Chairman of the State Duma’s Committee for energy, in his interview with energy Without Borders. The cover story of this year’s last energy Without Borders issue is called “New Year with No Debts.” A campaign of the same name aimed at tightening payment discipline is now being run by Moscow Power Supply Company. It is described in detail in this issue. I wish you a rewarding reading experience and look forward to your feedback. Please write to our editorial e-mail address: [email protected]. Congratulations on the energy Professional’s Day and many best wishes for a happy New Year and a Merry Christmas!

Sincerely yours, editor-in-Chief anton NaZarOv CONTENTS

MADE IN RUSSIA 16 Gas-Fired. Sought-After. Ours. A new plant that manufactures, sells and maintains 4 NEWS the sought-after 77 MW 6FA gas turbines has opened in Rybinsk, marking another step in an energy strategy COVER STORY which among other things aims at meeting the energy 8 sector’s equipment needs mostly with Russian-made New products. INTERNATIONAL COOPERATION Year with 18 Between East and West Inter RAO Group has unveiled a global strategy that No Debts aims to improve the performance of the company’s existing assets and develop new power equipment As of November 1, Russian electricity consumers’ total supply projects. Inter RAO is not planning any acqui- debt to guaranteed supply companies exceeded 165 sitions within the next two years, but says new joint billion rubles. Power supply companies do everything projects abroad are possible in case they are pro- possible to get their money, including cutting off elec- posed. tricity supply, imposing fines, or filing complaints with courts asking to seize the troublemakers’ property or prohibit them from travelling abroad. However, the INTERVIEW trend is that the companies’ accounts receivable will 20 continue to grow. And the issue needs to be addressed in the near future and at the highest level.

EXPERT CLUB 12 Groundwork for the Future The year of 2014 has been rich in events for the power industry: the approval of the district heating reform, the controversial outcome of the competitive capacity selection, the launches under CDAs, etc. We asked ener- gy company leaders and industry experts to name the key events of the year from their point of view.

GENERATION 14 Expected Ins and Outs Yet another year of mandatory investment programs for generation companies is coming to an end. New power plants have been duly put in operation under capacity de- livery agreements during 2014, with the amount of new capacity in Russia increasing. However, the new plants also bring a growing problem of a surplus of capacity that is being paid for, putting pressure on the market. Failure to decommission old facilities resulted in more than 10 GW of capacity being added to the list of plants that have “I don’t think a revolution is the not been selected but are still being paid for, while the best option, but if something decommissioning system is not working well so far. is objectively wrong in the industry, it needs to be changed.” It has been an eventful year for the Russian energy sector. Yet another competitive capacity selection, the district heating reform, the complex international environment – all this can significantly reshape the industry landscape in the future. In an interview with Energy Without Borders, Chairman of the State Duma’s Committee for Energy Ivan GRACHEV speaks about his view on the nation’s energy sector today and identifies short-time legislative priorities.

2 Founder and publisher: JSC Inter RAO Issue No.6 (31) December 2014 – January 2015 The magazine is registered with the Federal Service for Supervision in the Sphere of Telecom, Information Technologies and Mass Communications (ROSKOMNADZOR). State registration certicate PI No. FS77–54414 dated June 10, 2013. Editorial address: 27 Bolshaya Pirogovskaya Street, Building 2, 24 REGION 32 NB Moscow 119435, Russian Federation The Mother Lode Electrification tel. +7 (495) 664-88-40, fax +7 (495) 664-88-41, of Transnistria’s Power In Pictures [email protected]. Industry Russian energy professionals For advertising inquiries, please call: Transnistria is still an unrecog- celebrate their special day on +7 (495) 664-88-40 (21-24). nized state. However, it doesn’t December 22, the day when the prevent the country from exporting legendary national electrifica- Editor-in-Chief: Anton NAZAROV power. The republic’s Moldovskaya tion plan, GOELRO, was adopt- Executive Secretary: Alexander KLENIN TPP, which has recently celebrated ed. The electrification of the its 50th anniversary, supplies the country was also the beginning Editorial Board of JSC Inter RAO: power needs of both Moldova and of the Soviet energy poster, Alexander BORIS, Member of the Management its neighbors. which illustrated the most Board – Chair of the Editorial Board; interesting chapters of the Anton NAZAROV, Director of Public Relations, ENERGY SAVING TECHNOLOGIES energy industry’s history. Head of the Information Policy Department – 26 Open for Metering Deputy Chair of the Editorial Board; The Russian wholesale and retail Pavel OKLEY, Member of the Management Board – Head of the Operations Unit; power markets use data provid- Sergey PUCHKA, Head of the Human Resources ed by hundreds of thousands of and Organizational Development Unit; automated electricity meters and Yury SHAROV, Member of the Management millions of local metering devices. Board – Head of the Engineering Unit. Regulated metering is the key ele- ment of the market-driven develop- ment model for the Russian elec- tricity market which has currently reached a new stage of technologi- 10 Nizhnyaya Syromyatnicheskaya Street, Building 9, cal development. Moscow 105120, tel. +7 (495) 640-08-38, +7 (495) 640-08-39, www.medialine-pressa.ru, TECHNOLOGIES е-mail: [email protected]. 28 A Kilowatt Saved is General Manager: Larisa RUDAKOVA a Kilowatt Earned Project Manager: Tatyana POSTNIKOVA The role of technologies in the ener- Executive Editor: Irina DEMINA gy sector is more important than in Chief Designer: Mariya TYRYLGINA any other industry. If one does not Designers: Alexey SUKONKIN, Irina SHILINA Color Corrector: Andrey KLOCHKOV skimp on introducing recent techno- Proofreaders: Larisa NIKOLINA, logical advances, the investment will PHOTO EDITOR’S CHOICE Galina BONDARENKO, not only pay back, but also provide a 34 The Energy Industry Alina BABICH permanent source of savings. One of in the Year Just Photo: Dmitrii CHISTOPRUDOV, Press Service of such technologies is the automated Passed Inter RAO Group companies, SHUTTERSTOCK, RIA electricity metering system. What will the year of 2014 be Novosti, Lori photo bank best remembered for? Energy For advertising inquiries, please call: 30 A DISSENTING VOICE Without Borders presents a +7 (495) 640-08-38/39 ext. 150; Change in Priorities photo report of key 2014 events Mobile: +7 (962) 924-38-21 Transition from extensive devel- for industry players. Advertising Sales Manager Alla PEREVEZENTSEVA opment, large-scale construction [email protected], projects and expensive purchases to EVENT CALENDAR [email protected] improving efficiency through the use 36 Major energy industry confer- Proofs approved 24.12.2014. of internal resources – is this the key ences, forums and exhibitions in Printed at TvoLimedia print shop. to overcoming the industry crisis? December 2014 – January 2015.

ENERGY WITHOUT BORDERS | № 6 31 DECEMBER 2014  JANUARY 2015 3 NEWS

% – an increase MW – the average daily capacity of in Deutsche a future oating power generation Bank’s price unit; its design has been put out to target on Inter tender by the Russian Ministry of 20 RAO shares. 1 Industry and Trade. Russian-Finnish Power Flow

FGC UES, Inter RAO and Fingrid entered sia–Finland, which takes into account the into a number of agreements in Helsinki on specifics of the two-way trade. technological and organizational aspects The previous version of the agreement, of the two-way trade in electricity between which had been in force since 2007, had Russia and Finland. The parties signed a partly become outdated. Specifically, it new version of the Intersystem Agreement did not include the technical capabilities on 400 kV Cross-border Connections Rus- required to enable reverse power supply from Finland to Russia. Another two new agreements contain detailed regulations The “First” at the regarding this: the Agreement on Capacity Allocation and Cross-border Trade Manage- Ministry of Energy ment on 400 kV Cross-border Connections The Ministry of Energy has introduced between Vyborg Substation (Russia) and a new position, First Deputy Minister of Yllikkälä/Kymi Substations (Finland) and Energy of the Russian Federation. There the Agreement on Operation of the 400 kV has been no such post at the Ministry Cross-border Connections between Vyborg before. The idea to create the position Substation (Russia) and Yllikkälä/Kymi Sub- and appoint Alexei TEXLER to it was put stations (Finland). forward by Russian Minister of Energy The documents specify key technical Alexander NOVAK. A decree needed to parameters, including the transmission put it into action was signed by Prime capacity from Russia to Finland (1,400 MW) Minister Dmitry MEDVEDEV in late and the one from Finland to Russia (350 November. MW), technically enabling two-way power Alexei TEXLER was born in 1973. supply by Russian (Inter RAO) and Finnish He holds a degree in engineering/ Vyborg substation traders. economy from the Norilsk State Industrial Institute, with a major in Economics and Management in Metallurgy. In 2008–2009, Mr. TEXLER was the Head of Norilsk Discounts at the Expense of Others Administration. In 2011, he joined Polyus as managing director and head of the The Russian Government has made some the construction of grids for the existing company’s Krasnoyarsk business unit. changes to the pricing principles used for infrastructure (the so-called “last mile”). In July 2013, Mr. TEXLER was appointed regulated tariffs in the power sector for Moreover, these costs will be eliminated Deputy Minister of Energy of the Russian small and medium-sized businesses. The altogether from October 2017. Minor Federation. He oversees consolidation of resolution, which was adopted as part of consumers will have to bear the costs of industry development programs into a the Improvement of Energy Infrastructure organizational and technological proce- single strategic system, as well as nance Accessibility roadmap, was published on dures needed to connect them to the grid and implementation of innovations. the government’s website on October 31. only. Alexei TEXLER’s appointment as The changes will make it possible to However, connecting small and medi- First Deputy Minister of Energy shows gradually reduce the cost of connecting um-sized businesses at a discounted rate the importance of cross-industry equipment with a maximum capacity will have to be financed by the rest of con- coordination, especially in light of the of 150 kW or less to the electrical grid. sumers. The document says that grid com- current foreign policy situation, Minister From October 1, 2015, the connection fee panies’ “last mile” costs will include their of Energy Alexander NOVAK told TASS for this consumer group will include no expenses taken into account while setting when commenting on this talent more than 50 percent of investment in rates for power transmission services. decision.

4 % – the annual increase in power consumption million rubles in electricity in Russia within the next debts has been repaid in decade, as estimated by Kabardino-Balkaria. 0,5 the Ministry of Energy. 300 Put to Test An ocial ceremony was held in Yaroslavl Region’s Inter RAO – Engineering will use UEC - Gas Tur- Rybinsk on November 26 to unveil a multifunction- bines’ manufacturing capabilities for implementing al test bench at UEC - Gas Turbines (a subsidiary of its construction projects. The latter has agreed United Engine Corporation). The only equipment to provide the whole range of its products and of its kind in Russia, the bench makes it possible services to the company on a priority basis. These to conduct simultaneous full-scale tests of power include gas turbine units with a capacity ranging generation and gas compressor units of various from 2.5 to 60 MW and reciprocating units with a capacities. capacity from 0.5 to 4 MW, as well as engineering The commissioning ceremony was attended by and technical support, maintenance and routine ocials from the Ministry of Industry and Trade repairs of these units. and the Yaroslavl Region Government. At the Inter RAO – Engineering’s current order book Pkproject/Shutterstock.com event, UEC - Gas Turbines and Inter RAO – Engi- consists of nine projects to build and modernize neering signed an agreement on cooperation in facilities with a total capacity of 2.9 GW in Russia, Coal for the small and distributed generation. Kazakhstan, Ecuador and Bangladesh. Country!

Russia and China have adopted a roadmap for cooperation in the coal industry. The docu- ment was signed by Anatoly YANOVSKY, Russia’s Deputy Min- ister of Energy, and SHI Yubo, Deputy Director of the National Energy Administration of China, in late October. According to Interfax, the agreement includes the Me- zhegeysky coal deposit project in the Tyva Republic, which is expected to produce 7 million metric tons of coal annually. EVRAZ is responsible for the project from the Russian side, A multifunctional test bench at UEC - Gas Turbines while China is represented by ChinaCoal. The plans also in- clude joint development of the tion. Projects focused on promotion of the energy Elginsky coal deposit in Yakutia. Illustrative Example ecient lifestyle were featured in some of the most This project will be carried out ENES 2014, an international forum held in Moscow competitive nominations. For instance, the follow- by other companies – Mechel in late November, hosted a ceremony to award the ing winners were announced in the “Best Energy and China Shenhua. winners of the National Contest for Energy Saving Eciency Demonstration Center” nomination: Apart from mining Russian and Energy Eciency Improvement Projects. the Kazan State Power Engineering University, the coal deposits and increasing The contest was held for the rst time under the Regional Research and Education Center for Energy coal supply from Russia to auspices of the Russian Ministry of Energy. Over Eciency and Energy Saving Technologies at the China, the parties also intend 400 applications from 67 Russian regions were Vladimir State University, and Altai Power Supply to jointly develop new coal submitted during the federal stage of the competi- Company’s Energy Eciency Center. processing technologies.

ENERGY WITHOUT BORDERS | № 6 31 DECEMBER 2014  JANUARY 2015 5 NAFCO-Law & Tax Advisers

Dear partners, e team of the law rm NAFCO-Law & Tax Advisers heartily wishes you a Merry Christmas and a Happy New Year! We are proud of our long-standing relationship with Inter RAO and its highly professional team and hope to enjoy our continued cooperation to the benet of both companies for many years ahead. We wish you an abundance of new plans, creative ideas, good news and nancial success in the coming year! May prosperity and well-being, new heights and good luck be your constant companions! Happy New Year 2015!

NAFCO-Law & Tax Advisers 8 Presnenskaya Naberezhnaya, Bldg. 1, Moscow, 123317, The City of Capitals, Moscow Tower, Northern Block, 12th oor Phone/fax: +7 (499) 270–04–47 е-mail: o[email protected] www.nafco.ru

OPEN JOINT STOCK COMPANY "INTER RAO UES" Calls the Attention of Its Shareholders to the Following: The Decision on the issuance of shares of Inter RAO, Thus, the securities are expected to be registered The planned date for including the new issue of placed by converting in consolidation, and the Pro- not later than on December 23, 2014. In this case, Inter RAO stock on the MICEX Stock Exchange quo- spectus of shares of Inter RAO, placed by converting trading in Inter RAO stock (state registration num- tation list (rst level) and for the trading to begin is in consolidation, approved by the Board of Directors ber 1–03–33498-E at CJSC MICEX Stock Exchange) no later than 1 month after the suspension of trading of the Company at the meeting held on November will be suspended no later than on December 25, in Inter RAO stock (state registration number 1–03– 24, 2014, following the decision by JSC Inter RAO 2014, and the conversion of ordinary shares of JSC 33498 –E). Annual General Meeting of Shareholders on May 25, Inter RAO, with par value of 0.02809767 rubles per 2014 (Minutes of 25.05.2014 No. 14) will be submit- share (state registration number 1–03–33498-E) into In view of the above, Inter RAO recommends ted to the Bank of Russia for the state registration of ordinary shares of JSC Inter RAO with par value of that all shareholders, by December 26, 2014 the issue of securities no later than on December 9, 2.809767 rubles each is expected to take place on (expected date of conversion), increase the 2014. December 26, 2014. number of shares (state registration number In this case, in accordance with the requirements Consolidation Ratio: one hundred (100) ordinary 1–03–33498-E) to a multiple of 100. of the Regulation of the standards for the issue of registered uncerticated hares with par value of securities, including the registration of an issue (or 0.02809767 rubles each shall be converted into one Shareholders who at the moment of conver- additional issue), state registration of the results of (1) ordinary registered uncerticated share with par sion hold, as indicated in the shareholders’ register, an issue (additional issue), and registration of secu- value of 2.809767 rubles. a number of shares that is not a multiple of the con- rity prospectuses, approved by the Bank of Russia on According to paragraph 5.8.9 of the Regulation solidation ratio, will hold fractional shares. August 11, 2014, No. 428-P, the registering authority on Trading in the Securities Market, approved by According to paragraph 3 of Article 25 of the is obliged to register the securities with the state or order of the FFMS of Russia of December 28, 2010, Federal Law on Joint Stock Companies, a fraction- make a reasoned decision to decline the registration No. 10–78 / pz-n (updated July 30, 2013), the suspen- al share gives the shareholder, its legal owner, the for the next term within 10 working days of receiving sion of trading in Inter RAO shares (state registration rights granted by the relevant category (type) in the the documents submitted in accordance with the number of the issue 1–03–33498-E) is to be eected amount corresponding to the portion of the entire above Regulation for the state registration of the is- on the next trading day following the publication of share that it represents. sue of securities and for the registration of securities the issuer’s statement on the state registration of the Fractional shares are traded on par with whole prospectus following its preliminary examination decision to issue securities, on the basis of which the shares. If one person acquires two or more fractional (taking into account a prior submission of the doc- issuer's securities are admitted to trading subject to shares of one category (type), these shares shall form uments to the Bank of Russia for preliminary exam- conversion. The estimated date for the suspension of one whole and (or) a fractional share equal to the ination). trading is December 25, 2014. sum of these fractional shares.

6 Refrigeration Technologies COVER STORY New Year with As of November 1, Russian electricity consumers’ total debt to guaranteed supply companies exceeded 165 billion rubles. Power supply companies do everything possible to get their money, including cutting off electricity supply, imposing fines, or filing complaints with courts asking to seize the troublemakers’ property or prohibit them from travelling abroad. However, the trend is that the companies’ accounts receivable will continue to grow. And the issue needs to be addressed in the near future and at the highest level.

ith the debts being ity consumers account for 25 percent of NO DEBTS huge, the work of this amount, or 33 billion rubles. those who are in Perhaps, not a single guaranteed supply charge of making company in Russia is clear of debtors. For sure the bills are paid example, Krasnoyarskenergosbyt and Kiro- is increasingly “dirty, venergosbyt have accounts receivable of dangerous and de- about 180 million rubles each, while debts meaning”: they have to Omskenergo total 166 million rubles. to face insults, threats and even beatings The larger the region is the bigger the Was they perform their duties. local consumers’ electricity debts are. For One day in May 2014, Julia STOTSKA- instance, consumers owe 1.348 billion ru- YA, a Moscow Power Supply Company bles to Petersburg Power Supply Company employee, made her rounds in Shkin, and 5.6 billion rubles to Moscow Power non-payers. Petersburg Power Supply a small town in Moscow Region. It was Supply Company. Many of the persistent Company, for example, has cut off regular routine work and the woman did non-payers are wealthy people, popular electricity supply to more than 6,000 not expect anything bad. The house on media gures and other celebrities (read individuals and over 7,500 businesses Tsentralnaya Street looked like most of the more on pp. 10–11). since the beginning of the year. other buildings in the area. After coming “Guaranteed supply companies act as In the first nine months of 2014, up to the electrical panel and writing a buer between retail consumers, who Krasnoyarskenergosbyt filed over 12,000 down the electricity meter readings, Julia generate accounts receivable, and the claims for debt collection, recovering headed for the exit, but suddenly the wholesale market, where payment dead- over 51.4 million rubles, while Omsken- owner of the apartment came in her way. lines are strictly regulated. This creates a ergo brought 2,248 lawsuits to recover He started beating the woman on her large cash gap the companies have to ll the debts in the third quarter of 2014 hands, swearing and threatening to kill her. with the help of loans,” said Maria FADEYE- alone; by now, the court has sustained She eventually managed to escape and VA, an expert analyst at the energy studies 1,809 of the claims totaling 10.1 million ran away. Julia went to a hospital, where department of the Institute of Natural rubles. Working together with bailiffs, the doctors found multiple bruises on her Monopolies Research. Moscow Power Supply Company man- hands, and then to police, who initiated a “Consumers’ failure to pay creates a aged to recover over 66.7 million rubles case against the attacker. Unfortunately, situation where power supply companies in debts from businesses and individuals this is not an isolated case: such things can simply don’t have any money, as banks in the third quarter of 2014, and 288 mil- happen anywhere in the country. cannot give them loans forever,” said Nata- lion rubles in total since the beginning lia NEVMERZHITSKAYA, board chair at NP of the year. Also, the property of fifteen THE SCALE OF THE DISASTER GS & PC, a non-prot organization uniting consumers was seized and nine debtors What do the energy workers run this risk guaranteed power supply companies and were prohibited from travelling abroad. for? Electricity debts now total billions of other retail suppliers. “The guaranteed sup- In fairness, it must be said that the rubles, and the amount is increasing every ply companies may then fail to settle their “stick approach” is not the only one year. According to Market Council, the payments with grid and power generation used by power supply companies. For debts amounted to 113 billion rubles as companies in time, as they do not have instance, to motivate their debtors, of January 1, 2013 and reached 135 billion other sources of funds.” Petersburg Power Supply Company and rubles by early 2014. As of November Petroelektrosbyt promised not to charge 1, the total debt to guaranteed supply CARROT AND STICK APPROACH their consumers any penalties if they companies on the retail electricity market Power supply companies have a settle their electricity debts by Novem- exceeded 165 billion rubles. Retail electric- whole range of legal tools to deal with ber 30.

8 averse to delaying payments for electrici- ty and other energy bills, experts say. It is virtually impossible to recover the energy debts owned by such tenants, as in most cases they are insolvent, and the lessors are not liable for their debts.

A NOTE FOR DEFAULTERS Amendments to legislation on tight- ening payment discipline in the retail electricity market are now being actively debated and revised by the State Duma. NO DEBTS They would aect both businesses and individuals. Specically, they would in- crease penalties for delaying payments on energy bills for more than three months. Today, the penalty is equal to 1/300 of the CUTTING OFF ELECTRICITY SUPPLY NEVMERZHITSKAYA said. “An attempt is Central Bank’s discount rate as of the time TO NON DISCONNECTABLE being made now to apply the principle of of payment. The new bill would almost CONSUMERS nancial guarantees, which is used on the double the penalty to be paid starting Apart from regular people, power supply wholesale market, to the retail markets as from the 91st day of the delay, increasing companies have yet another group of well: this would mean introducing state it to 1/170 of the discount rate. This cor- problem customers – these are called and bank guarantees for those electricity responds approximately to a 17 percent “non-disconnectable consumers,” as consumers who cannot be disconnected. interest rate on a standard consumer loan. cutting o electricity supply to them may This very novelty is key in a bill being Also, regulations have already been ad- have economic, environmental or social currently considered by the State Duma opted for power supply companies to be consequences. Such companies – includ- that has been prepared by the Ministry able to provide information about debtors ing water utilities, public institutions and of Energy and is aimed at strengthen- to credit bureaus starting March 2015, military facilities – abuse their special sta- ing consumers’ payment discipline. The making it much more dicult for the tus. For example, for institutions overseen inability to meet the requirements to defaulters to arrange a bank loan or get a by the Ministry of Defense, the collection provide the guarantees could serve as a credit card. An option is being considered rate of electricity bills does not even basis for holding the indebted company now to introduce regulations that would reach 90 percent (while in case of retail and its head administratively liable.” make consumers administratively liable consumers, the gure is 96 percent), Mar- The Ministry of Energy welcomes the for violating the procedure for introducing ket Council told Energy Without Borders. idea to introduce payment guarantees. energy consumption restrictions, while Public institutions’ debts to guaranteed “We will be able to move towards ad- repeated unauthorized connection to supply companies totaled 12.9 billion dressing the existing payment discipline power and heat networks would in certain rubles as of November 1, increasing by 4.6 issues in the power industry by starting to circumstances be considered a criminal billion rubles since the beginning of the use the method of guaranteed payments, oense. year, while those of non-industrial con- which has proved to be eective for the Those who raise their hand against sumers (including non-disconnectable wholesale market, on the retail markets energy companies’ employees in charge utilities) totaled 76.8 billion rubles (which as well; the method will be especially ef- of making sure the bills are paid will also represents a year-to-date increase of 1.8 fective for non-disconnectable consumer be deemed criminally responsible. By billion rubles). groups,” Alexander NOVAK said. the way, this was the outcome of Julia The impossibility to cut o electricity Therefore, it is very likely that the STOTSKAYA’s case: after she led the claim, supply to non-disconnectable consum- measure will soon be introduced on the a criminal case was initiated for violating ers is one of the key legal and structural retail market. two articles of the Russian Criminal Code problems preventing power companies The regulatory changes aimed at tight- (part 1 of Article 116, beating, and part 1 from reducing debts on the retail electric- ening payment discipline on the retail of Article 119, a death threat). The man ity markets, said Energy Minister Alexan- electricity markets will also aect the was given a sentence of eight months; der NOVAK at a meeting over preparation way how utilities owned by the federal also, the court upheld STOTSKAYA’s of energy system facilities for the autumn or municipal government are rented. The claim for 10,000 rubles in non-pecuniary and winter season in late October. thing is that those who rent these facili- damages. “We have to make non-disconnectable ties (boiler houses and centralized water consumers more responsible,” Natalia supply and sanitation systems) are not By anna MILINa

ENERGY WITHOUT BORDERS | № 6 31 DECEMBER 2014  JANUARY 2015 9 COVER STORY “Your House Will Be Next!”

Households owe 2.93 billion rubles to Moscow Power Supply Company, or 250 rubles per individual, assuming that the total population of the capital is 12 million. The distribution of non-payments is not as even as the rough, anonymized calculations suggest. Joining a team of Moscow Power Supply Company staff members, our correspondent went on a raid on defaulters. The list of non- payers included actor Vladimir TISHKO, who is famous for featuring in a laundry detergent commercial in which he said, “Then your house will be next!” His electricity debt exceeded 100,000 rubles.

DON’T UNSEAL  YOU’LL GET “Our” non-payer lives in an apartment PUNISHED building for quite wealthy people At this moment, the door handle starts to move, as if by a miracle, and the owner of the apartment appears on the threshold. “Moscow Power Supply Company. You did not pay your electricity bills…” “I know…” After saying this, he shuts the door. The attempt to make a conversation has not been a success. Now it’s time to get down to business. With the swiftness of a professional, the technician opens the electrical panel and nds the debtor’s electricity meter. But then, surprise! “It’s not under tension,” Dmitry says. “This is why the doorbell does not work.” However, the technician seals o the meter, placing a scotch tape-like piece of red paper to the place where wires should be connected. WE’LL HAVE TO CUT OFF ers fail to pay electricity bills for two months “He’ll reconnect it after we go away, and The apartment building near the Aeroport and more. However, at rst the companies it’s all down the drain,” I say, interested in metro station, where TISHKO lives (he is listed go through the complaints process, sending the eectiveness of the measures. “Actually, as the owner of the apartment), looks like a notices demanding that the bills are paid reconnecting wiring after a technician cuts place for quite well-o people. It’s the Ru- and using robocalls to appeal to the default- it o is a matter of ten minutes and a smoke blevka of the 1970s, where writer Konstantin er’s conscience. The sixth month marks the break for a person who has completed a SIMONOV and poet Alexander GALICH once end of the idle talk and start of a new phase, semester at an electrical engineering college.” lived. that of ling lawsuits. “If you take o the seal, it will say ‘opened,’ “Is the thing we’re going to do now legal?” “Our client has not been paying his which will be very clearly seen.” Dmitry I ask Alexey DEULIN, acting head of Moscow electricity bills since October 2013,” Alexey explains. “For the one who does this, it would Power Supply Company’s Northern Branch. DEULIN explains. “So, along with cutting mean criminal responsibility for unautho- “It’s absolutely legal,” he says. “First, the o electricity supply, our lawyers are also rized connection to the power grid and electrical panel – the border between the preparing lawsuits.” therefore, inicting of damage by deception. power supply company’s power grid and This is when we reach the oor we need. He may face a ne of up to 3,000 rubles or a the consumer’s electrical wiring – is in the Dmitry DENISOV, one of Moscow Power sentence of up to two years. It’s up to him to stairwell, which is a public place, so we are Supply Company’s rst level technicians decide.” not trespassing on private property. Second, specializing in cutting o electricity, rings It seems that the client has already we gave the debtor a month’s warning of the the doorbell. There is silence. It looks like the violated at least one article. The technician date the electricity supply will be cut o. So it doorbell does not work; there are no sounds has found that the apartment has been won’t be a surprise to him.” coming from the apartment. The technician connected to the power grid bypassing the Moscow Power Supply Company knocks. Silence again. meter, which means that a large amount explained that electricity providers have the “We did all we could,” Dmitry says. “We’ll of electricity has been consumed without right to cut o power supply when consum- have to cut o.” authorization and metering. Dmitry cuts

10 Dmitry DENISOV, one of Moscow Power Supply Company’s rst level technicians specializing in cutting o electricity, has detected unauthorized connection and sealed o the switches the wire and seals o the switches. The cutting-o process is complete. OPINION “It was simple,” Dmitry says, laughing. STATUS OBLIGES “They would sometimes swear, shout or Why do quite wealthy people who have no money even attack you with a knife.” problems forget to pay their bills, amassing huge “Are there many more apartments to cut debts of one, two or even three hundred thousand o today? rubles? Oleg IONOV, psychologist, head of the Mos- “Twenty-ve at least,” Dmitry says, show- cow branch of the Family and Marriage Psychology ing a pack of electricity bills. “This debt is not Center, candidate of medical sciences, believes that that big really. Today, the maximum will be people who have achieved high social and nancial 350 thousand.” status often have a feeling that carrying out small The electricity cut-o is not for ever. Alexey household duties is not a must for them. “It’s just a DEULIN explains that the only thing a de- couple of thousands of rubles, they can wait; it’s not faulter has to do is to settle his or her debts traces: when we open a bank account, pay that much,” IONOV said, trying to explain the nature and pay a reconnection fee of 1,000 rubles. with a credit card, buy a plane ticket or a train of the phenomenon. “You have probably seen ex- Electricity supply will be resumed within 24 ticket, arrange car insurance, etc. The baili pensive cars rushing along bus lanes. By doing this, hours. service sends requests to all these places. If it their owners seem to be saying that the ne, even “We even meet them halfway,” he says. nds a bank account, it simply withdraws the a large one, is not much money for them. The same “Picture this: a payment is received at 6 p.m., amount owed. But if there’s no bank account, story is with electricity bills.” people have already left. But we still nd an it has to seize the property. opportunity to connect the debtor. If he or “Naturally, the value of the property she cannot repay the total debt at a time, should be proportional to the amount owed,” debts. Nobody would want a baili to come the company is ready to restructure it. Fifty Ivan KRAVTSOV says, explaining the proce- to his or her company’s accounting depart- percent should be paid immediately and the dure. “If the debt is about 10 to 15 thousand, ment: this may result in a dismissal.” rest by installments.” the judge will not allow us to seize a car.” I don’t know what the accounting depart- But when a debtor does not want to From this moment, the seized property ment of our today’s debtor will say, but, to pay or does not react to warnings and becomes state property and is given to the tell you the truth, I checked my electricity summonses – that’s another story. Court debtor for temporary safekeeping. Its loss bills when I came home, to stay on the safe sittings can be postponed twice due to the or disappearance is considered as criminal side. defendant’s failure to come, and at the third oense (specically, embezzlement). Within session, the court makes a default judgment. a certain time frame, the debtor has to either By andrei ZhIGaLIN In a month, the judgment comes into force, pay back the debt or sell the property, with Photos by Daria ZhIGaLINa the claimant receives a writ of execution and, the baili’s permission, to clear the debt with at its discretion, either tries to get the money the money made from the sale. itself or turns to court bailis. “We do not have a goal of humiliating or oending debtors. We act according Vladimir TISHKO has WE’LL FIND YOU BY ALL MEANS to the law only,” KRAVTSOV explains. “But not been paying his If it comes to court bailis, they initiate they should understand that delaying debt electricity bills since enforcement proceedings and seize the repayments or, worse still, evasion, would October 2013 debtors’ property, or start looking for their cause lots of nasty problems. After nding property and funds, or sometimes even the themselves in such a situation once, people debtors themselves. Ivan KRAVTSOV, head usually start being more careful about their of the Zamoskvoretsky oce of the Federal Bailis’ Service’s Moscow branch, said that the person will be looked for almost ev- erywhere. The thing is that we constantly leave CUT OFF ENERGY WITHOUT BORDERS | № 6 31 DECEMBERFOR 2014  JANUARY 2015 NON-PAYMENT 11 EXPERT CLUB 12 | Groundwork for the Future

VALENTIN MEZHEVICH, MANAGEMENT BOARD MEMBER, RUSSIAN GRIDS SERGEY PIKIN, ALEXANDRA PANINA, DIRECTOR, ENERGY VICE PRESIDENT OF MARKETING DEVELOPMENT FUND AND SALES, INTER RAO POWER GENERATION MANAGEMENT “This has been the first full-fledged year for our company. We started working on “Most of this year’s key events and our long-term development program, trends started to emerge back in 2013. “I think that the main problems faced by and we are currently discussing the I’m talking, rst and foremost, about the generation companies in the wholesale concept of the strategy with regulatory freezing of taris, which relieved indus- electricity and capacity market in 2014 bodies. We also continued to develop tries of an extra burden – an increase in were brought by the fact that the existing and bring forward legislative proposals. power and gas rates. This country hasn’t market mechanisms had been developed I’m talking, first of all, about government seen anything like this since the 1990s, for a growing market. At the same time, regulations on connecting consumers when some similar restrictions were the surplus-based demand forecast made to the electrical grid. The problem is introduced. during the period of RAO UES of Russia’s that only slightly over 10 percent of “The second important decision was to reorganization caused a substantial consumers connected to the grid after slow down the rate at which the taris amount of capacity to become redun- applying for this actually start consum- will be increasing in 2015–2016. The dant, which was clearly shown by the ing power in the amount specified in gures are currently being discussed, they 2015 CCS. The faulty forecast of supply their applications. It means that con- haven’t been set yet, but they will anyway and demand provided at the time has sumption hardly grows at all. It is not be on a par with the ination, or probably given rise to a number of serious issues. proportional to the costs we incur while a little higher. This decision demonstrates “Moreover, I believe that the power connecting the consumers (especially the government’s intention to hold down industry has somewhat lingered on in at the discounted rate). This significant- burden increases. This policy is extremely the transitional period of the reform. The ly affects our work, which is primarily important, especially taking into account reform’s target model suggested that aimed at ensuring reliability. Instead of the economic situation in the country. long-term market segments (both the modernizing our infrastructure, we have “The intense debate about the heat mar- long-term capacity market and the long- to bear the costs of building additional ket, which has been taking place through- term market for bilateral contracts, where transformers, which eventually turn out out 2014, is expected to be over late this the bulk of electricity and capacity was to be unnecessary. year or in early 2015. In my opinion, it will supposed to be sold) will become the “Also, despite considerable efforts, be the most signicant change in the key commercial mechanisms. However, we failed to come close this year to Russian power industry since RAO UES of we have only been moving further away resolving the problem of non-payment Russia’s reorganization. Also, this year saw from discussing any long-term forecast of services provided by power grid the continuation of commissioning of instruments in the recent years. I’d like to companies. The problem exists for both generation facilities under CDAs. New as- highlight that, in any scenario, decom- households and businesses, with the sets started to replace old and inecient missioning (or mothballing) programs, housing and utilities sector accounting ones. At the competitive capacity selec- as well as appropriate modernization for the majority of the debtors. Next tion for 2015, 15 GW of capacity proved programs will be essential to achieve year, we’ll continue to devote significant redundant. Those were the least ecient a balance between the interests of effort to making sure that we get paid plants, and due to this capacity surplus the state, consumers and generators for what we do. But to achieve this, we competition nally started working. As because, in spite of the large number of need the legislative changes proposed a result, the cost of some of the facilities new plants being commissioned under by Russian Grids to be introduced. We’ll has gone down, which will also inuence CDAs, the aging of the existing facilities do everything possible to have the reg- consumer power prices.” remains an issue.” ulatory bodies support our proposals.” The year of 2014 has been rich in events for the power industry: the approval of the district heating reform, the controversial outcome of the competitive capacity selection, the launches under CDAs, etc. We asked energy company leaders Groundwork for the Future and industry experts to name the key events of the year from their point of view.

ELENA VISHNYAKOVA, VLADIMIR SHELKOV, PRESS SECRETARY, GENERAL DIRECTOR, DMITRY BULGAKOV, RUSHYDRO QUADRA  POWER GENERATION ANALYST, DEUTSCHE BANK “One of the key events for the industry this year was capacity market liberalization. We “This year has been marked by a number “As far as the stock market goes, this year believe it to be an eective measure for of milestones and important events. First has been dicult. The market value of eliminating the discriminatory conditions of all, it’s the heat sector reform, which is energy companies, as well as the liquidity that existed for hydro power generation about to start. The future of the industry, of their securities and investors’ interest in in Siberia. The changes in the rules for the as well as the decisions that will be taken them has weakened compared with the market restore the previous capacity sales for modernization and further develop- previous year. The reduction in the market scheme, which provided for fair revenue ment of the heat sector, are now more value of most companies was particu- distribution between Siberian generation or less clear. The rules of the game over larly noticeable in the generation and companies. the long term, clear and transparent for power grid segments. It was caused by “Yet another important change was further investors, are being established. In my the geopolitical situation and the general enhancement of state support for RES. opinion, these have been the rst import- economic slowdown. Thanks to a set of regulatory documents ant decisions since the reorganization “Speaking about positive results, I’d like approved by the Russian Government, state of RAO UES of Russia. All that is needed to highlight that a number of compa- support for renewable energy develop- now is to start the reform. That’s the most nies have completed their investment ment has nally become a reality. This is an important thing. programs, while some cut back on their important step toward the energy sector’s “The recent results of the 2015 CCS show investment activity, using the freed cash sustainable development. that the market model itself has serious to nance dividend payouts. E.ON Russia “Two milestones of this year for the Russian aws: it does not properly take into ac- and Enel Russia showed their worth this hydro power industry are the completion of count the actual situation in the industry. year: they paid over 100 and 40 percent of the reconstruction of Sayano-Shushenska- We need to make prompt decisions to their annual net income, respectively. This ya HPP and the launch of Boguchanskaya introduce eective mechanisms for de- means two things. Firstly, that the compa- HPP, a long-delayed Soviet construction commissioning of inecient power plants nies are market-oriented and their leaders project, at full capacity. The year also saw and their replacement by new, alternative try to maximize their net income, which the start of construction of main facilities heat sources. is shared with all the shareholders. This, in at Verkhne-Narynsky hydropower dams in “Quadra’s actions are in line with the turn, has a positive eect on the compa- Kyrgyzstan. The project is implemented by market situation. We are optimizing our nies’ capitalization. For example, the value RusHydro in accordance with an agree- asset structure and we have completed of E.ON Russia, with its 11 GW of capacity, ment between the Russian and Kirghiz the spin-o of our district heating oper- is estimated at around 3.4 billion US dol- governments. ations into a separate business unit. The lars, while OGK-2, with 18 GW, is worth 420 “The year’s special milestone for RusHydro company is trying to acquire the status million US dollars (which is one-eighth of is, no doubt, the beginning of construction of a unied heat supply organization the former). Secondly, we can nally see and installation work at four heat gener- in the areas where it operates. Quadra’s companies that are committed to best ation projects in the Far East, which are number one priority is to implement its practices in corporate governance. carried out in accordance with a presiden- investment program which focuses on “Another important event was the tial decree. RusHydro is expected to receive the construction of new power facilities consolidation of IES-Holding to create a total of 13.4 billion rubles in public funds under capacity delivery agreements. Six Russia’s largest heat generation company. under the presidential decree in 2014. The out of the ten new power plants included There are hopes that the move will help funds are aimed at developing the Far East’s in the program have already been built improve IES-Holding’s corporate gover- power industry and will be used to nance and commissioned.” nance.” projects to build new power facilities.

ENERGY WITHOUT BORDERS | № 6 31 DECEMBER 2014  JANUARY 2015 13 GENERATION 14 | Expected Ins and Outs

Yet another year of mandatory investment programs for generation companies is coming to an end. New power plants have been duly put in operation under capacity delivery agreements during 2014, with the amount of new capacity in Russia increasing. However, the new plants also bring a growing problem of a surplus of capacity that is being paid for, putting pressure on the market. Failure to decommission old facilities resulted in more than 10 GW of capacity being added to the list of plants that have not been selected but are still being paid for, while the decommissioning system is not working well so far.

NO MORE THREAT OF POWER South and the UES of the Mid-Volga – 141 installed capacity on the domestic market), SHORTAGE MW and 81 MW, respectively. but is also a vitally important project from According to System Operator of the United This year, the major Russian energy compa- the point of view of the development of the Power System, 4.26 GW of new capacity was nies operating in the rst pricing zone (Eu- region’s energy system,” said Boris KOVAL- commissioned in the rst nine months of rope and the Urals) completed the construc- CHUK, Inter RAO Group’s Management Board 2014. The Unied Energy System (UES) of the tion of new power plants, with the launches Chairman. In April, Inter RAO commissioned Urals and the UES of Siberia account for the peaking in November. For instance, Inter a 413 MW power generation unit (No. 3) at bulk of it (with 1.8 GW and 1.52 GW, respec- RAO nished a large-scale project to build Nizhnevartovskaya TPP, completely resolving tively). The UES of the Center commissioned two new units at Yuzhnouralskaya TPP-2, 420 energy shortage problems in Khanty–Mansi 817 MW of new capacity, while the UES of the MW each. The rst unit was commissioned in Autonomous District. The Group plans to February; the second one was launched on commission a 200 MW pulverized coal-red November 24. The 840 MW of new capacity generation unit (No. 8) at Cherepetskaya TPP at Yuzhnouralskaya TPP-2 will help satisfy the in December, and the same type of unit (No. growing demand for electricity in the South 9) in early 2015. Urals region (including the demand from the On November 20, Gazprom Energoholding region’s large manufacturing plants), which commissioned a new 420 MW power gener- has not been able to meet its power needs ation unit under a CDA at Cherepovetskaya so far. “The completion of the large-scale TPP. After the launch of the new combined construction project at Yuzhnouralskaya cycle power plant, the facility’s fuel mix TPP-2 is not only in line with one of Inter currently dominated by coal will shift towards RAO’s strategic priorities (i.e. increasing the gas, which earlier accounted for only 15 per-

The completion of a large-scale construction project at Yuzhnouralskaya TPP-2 is in line with Inter RAO’s strategic priorities cent. The rest of the plant’s power generation inecient plants does not work. The balance units did not pass the competitive capacity surplus is growing, impairing the eciency of selection (CCS) this year, which jeopardized equipment utilization.” the sales of coal produced near the cities of Indeed, the year of 2014 has shown that the Vorkuta and Inta, but the government com- decommissioning of old power plants is a mission listed them as must-run generation, big issue. The problem is that companies removing the threat. fail to retire the plants they should. A record Gazprom Energoholding’s MOSENERGO plans number of power plants (totaling 15.4 GW) to commission a new 420 MW power gener- failed to pass the competitive capacity ation unit at CHPP-16, the holding company’s selection in 2015. This is ve times as much as Director General Denis FYODOROV said. a year before. The government commission IES-Holding was another company which is expected to deem 10.8–13.4 GW of plants implemented the bulk of its investment meeting the criteria of must-run generation, program this year: it commissioned a 165 which should be paid for by the market MW gas turbine unit at Permskaya CHPP-9 irrespective of its inability to compete with and 230 MW units at Izhevskaya CHPP-1, other plants during the competitive capacity Sayano-Shushenskaya HPP has reopened its second hydro power Vladimirskaya CHPP-2 and Kirovskaya CHPP-3. selection. Consumers will have to pay an extra generation unit, which was destroyed in the 2009 accident The holding company plans to launch a total 28–35 billion rubles to cover their mainte- of 1.3 GW of new capacity by the end of the nance costs in 2015. estimates, the country has to decommission year. Also, TGC-2 commissioned a 110 MW System Operator of the United Power System 25–28 GW of capacity for its energy system to unit at Vologodskaya CHPP (its launch was suggested replacing unwanted power plants work properly. delayed for more than a year beyond grace on a competitive basis; the authorities and period, which caused the Federal Tari Service industry associations are now discussing the TEMPORARY SHUT DOWN to set a lower rate for the company’s plants.) possibility of introducing a mechanism for Naturally, energy companies have their own The second pricing zone also witnessed a temporarily shutting down power plants, retirement plans. Inter RAO said it intends considerable increase in the number of new which would be re-opened if demand grows. to shut down 3.5 GW of old plants by 2020, plants, both CHPPs and HPPs. As part of its However, none of the proposed mechanisms including 276 MW at Yuzhnouralskaya TPP mandatory investment program, Siberian has been properly developed and approved and Verkhnetagilskaya TPP, which will retire Generating Company commissioned 656 so far. as soon as on January 1, 2015. Irkutskenergo MW of new capacity, modernizing power “The approach to decommissioning should plans to decommission 166 MW at Irkutskaya generation units at Barnaulskaya CHPP-2, and be the same as the one to capital investment CHPP-1. Gazprom Energoholding also has a Nazarovskaya, Tom-Usinskaya and Belovskaya programs,” KOZHUKHOVSKY said. He believes retirement program; however, according to its TPPs, as well as building Novokuznetskaya that the problem with retirements is that the First Deputy Director General Pavel SHATSKY, GTPP (gas turbine power plant) and a new shutdown strategy should be developed for the company’s own decommissioning plans power generation unit at Abakanskaya CHPP. each power facility individually. “For a com- (which are based on the plants’ performance) Also, by the end of the year, the company bined cycle unit, for example, the district heat- and the list of power plants that have not plans to open new power generation units at ing system needs to have a replacement, i.e. passed the CCS overlap by only 20 percent. Belovskaya TPP and Barnaulskaya CHPP-2. a district heating layout should be developed Therefore, it would not be reasonable to build In early November, a dicult period nally that does not have this unit in it,” the expert the decommissioning strategy on the results came to an end for RusHydro, which complet- explained. “Many municipalities in Russia of the CCS as it is today, even if it is there for ed the reconstruction of Sayano-Shushenska- do not have any district heating layouts. a long time, he said. Alexandra PANINA, Vice ya HPP. November 12 saw the grand opening Unfortunately, the new heat market does not President of Marketing and Sales at Inter RAO ceremony of the plant’s second, and last, hy- pay enough attention to them either. As for Power Generation Management, said that dro power generation unit (the one that was the retirement of power plants, they perform generators are ready to decommission the destroyed in the 2009 accident.) The power a number of other functions apart from power plants that have not been selected, plant again reached its design capacity of 6.4 generating power, including power transmis- but there is no guarantee that these plants GW. By the end of the year, RusHydro plans to sion, etc. We have to develop compensating will not be needed in a year or three. Being commission the last hydro power generation measures that are in line with the needs of aware of the fact that electricity consumption unit at Boguchanskaya HPP, completing this the energy system as a whole.” may rise again in the future, System Operator construction project as well. Additionally, statistics for 2012–2013 suggests suggests introducing a mechanism for that 2 GW of distributed generation facilities is temporarily shutting down old power plants RECOMPENSING FOR THE PAST added to the energy system every year. These instead of completely decommissioning “New power plants are being commissioned are in-house power plants owned by indus- them and paying the associated costs at the under CDAs as they should, the program runs trial consumers seeking to avoid the need to expense of the market. The proposal has not smoothly,” said Igor KOZHUKHOVSKY, Dep- pay for maintenance of the energy system’s been widely discussed yet, but a number of uty General Director of the Russian Energy shared infrastructure. This makes the need generators have welcomed it. Agency. “However, unfortunately, the existing to remove old power plants from operation program aimed at the decommissioning of even stronger. According to Market Council’s By Natalya SeMaShKO

ENERGY WITHOUT BORDERS | № 6 31 DECEMBER 2014  JANUARY 2015 15 MADE IN RUSSIA 16 | Gas-Fired. Sought-After. Ours

A new plant that manufactures, sells and maintains the sought-after 77 MW 6FA gas turbines has opened in Rybinsk, marking another step in an energy strategy which among other things aims at meeting the energy sector’s equipment needs mostly with Russian-made products.

A Russian-made 6FA turbine

COUNTING ON YOURSELF Besides, the very scale of the Russian Russia already has joint ventures and for- With the volatile economic situation and power industry and the strong need to eign companies’ factories producing energy the U.S. and EU’s adoption of a series of upgrade its assets create prerequisites for equipment for the electrical grid. Power Ma- unilateral restrictive political and economic the development of the Russian electrical chines and Toshiba have a joint venture that measures against Russia and a number power engineering. In 2007, a project was manufactures high voltage transformers in of Russian individuals and organizations, launched to build a series of power gen- Saint Petersburg, Siemens makes the same the need to develop local production has eration facilities following the start of the type of products in Voronezh and Hyundai become one of the most urgent issues. restructuring of RAO UES of Russia. Unfortu- produces switchgear in Primorsky Territory. Speaking at the St. Petersburg Internation- nately, the domestic industry was not ready The construction of a new high tech al Economic Forum in May this year, Pres- back then to respond to the project’s needs, plant in Yaroslavl Region manufacturing ident Vladimir PUTIN set the government forcing the company to order equipment highly ecient gas turbines for industrial a task of developing a strategy aimed at produced by Siemens’, Alstom’s, General purposes was yet another step on the replacing imports with goods manufac- Electric’s and other gas turbine manufac- industry’s path to development. tured at home. The strategy was expected tures’ plants located in other countries. to be developed by fall. Although the It was clear that the country needed MADE IN YAROSLAVL REGION energy sector is not among the industries to set up its own energy equipment Back in 2004, at a meeting with General where this issue is especially urgent, it production. A number of fundamental Electric’s CEO Jerey IMMELT, President would be wrong to say that it does not policy papers were adopted to support the Vladimir PUTIN said he believed that mak- face such problems at all. Market players industry’s future development. For example, ing the Russian economy more diverse was estimate that imported equipment make according to the Russian Government’s en- a top priority. The head of the U.S. corpo- up over 50 percent in local distribution ergy strategy, domestic production should ration promised to assist Russia in this. Fol- networks and about 70 percent in bulk be able to fully meet the energy sector’s lowing lengthy negotiations, in September power systems (with a voltage of 220 kV equipment needs by 2035. Imported equip- 2011, Inter RAO, General Electric and United and higher). According to the Ministry of ment is expected to make up no more Engine Corporation (UEC, part of Rostec Energy, imports account for up to 45 per- than 12 percent at the end of the rst stage Corporation) signed an agreement to create cent and 30 percent of all gas turbines and and 8 percent at the end of the second a joint venture called Russian Gas Turbines. water turbines used in the electric power stage, while by 2035, the gure should be October 2014 witnessed the grand opening industry, respectively. decreased to 3–5 percent. ceremony of a new plant in Rybinsk (Yaro- will meet the existing requirements and quality standards,” Rostec’s Deputy CEO Dmitriy SHUGAEV said. Gas-Fired. Sought-After. Ours PROSPECTS AND HOPES The future success of the project depends on the market for the turbines and the slavl Region), which manufactures, sells and mechanisms for guaranteeing return on maintains the sought-after 77 MW 6FA gas investment that will be used by those who turbines. will carry out new construction projects “The Russian Gas Turbines joint venture after the CDA program ends in 2017. will contribute to the strengthening of Rus- In 2012, the Ministry of Energy devel- sia’s energy security,” Inter RAO’s Manage- oped an energy industry modernization ment Board Chairman Boris KOVALCHUK program through 2020. The move was said at the opening ceremony. Russian Gas Turbines’ manufacturing facilities driven by the high levels of wear and tear Next year, the Rybinsk plant will assemble of the existing energy infrastructure. Ac- its rst two 6FA turbines, which already cording to the agency, about 74 percent of have a buyer – Rosneft. Thanks to a decree This is when mid-capacity turbines will combined heat and power plants currently on construction of gas-red generation become the most sought-after, as they will operating in the country were commis- facilities in Kaliningrad Region, which help achieve much higher economic and sioned more than 30 years ago; 22 percent was signed by the Russian Government, environmental performance when building of them opened more than 50 years ago; Rybinsk-made turbines are also likely to be new combined heat and power plants or for hydro power plants, the gures are 77 delivered to this region. The plant’s total introducing combined cycle technologies percent and 20.9 percent, respectively. annual production capacity is twenty 6FA at the existing facilities. Nuclear power plants that are older than 30 gas turbines. Inter RAO’s partners in Latin The 6FA is being continuously improved. years account for 34.5 percent of all NPPs. America (specically, in Argentina) have In 2015, the plant will start making a new More than 50 percent of the existing grid shown interest in the Russian gas turbines model, the 6F.03, with a capacity increased infrastructure has been used for more than as well. by 2 MW, to 79 MW, and an energy conver- 30 years. The most important thing, however, is sion eciency of 36.0 percent for simple cy- The Ministry of Energy estimates that the that the turbines will in the near future be cles and 55.6 percent for combined cycles. country will need 6.8 trillion rubles to mod- in demand in our country. Their advantages One of the prerequisites for Russian Gas ernize its power facilities. The money would include high eciency and reliability; also, Turbines was that all the modied versions be spent on decommissioning outdated they have more fuel exibility than their of the turbine (which would be part of the power plants with a total capacity of 26.4 competitors. Besides, the multiple projects improvement process) should be pro- GW and increasing the cumulative installed to build large power generation facilities duced locally. UEC undertook to meet this capacity by 50 GW. under capacity delivery agreements (CDA) requirement. However, the program has not been will come to their logical end by 2018, “A local production team has been adopted yet as the parties have not been giving the center stage to modernization of formed from GE and UEC sta members able to come to an agreement about the outdated power plants, including, rst of all, and it is actively working; we are condent mechanism for paying back the invest- the combined heat and power plants that that together we’ll be able to get concrete ments, which exists in CDAs. In anticipation produce electricity for cities and factories. results, and the Russian-made components of a clear regulatory environment, all power generation companies have cut back on their long-term investment plans. Expecting a decline in demand in the near future, Russian Gas Turbines’ share- holders took steps to cut down production costs and reduce the plant’s administrative expenses. This has already allowed them to keep their expectations about the JV’s prof- itability at the same level without raising turbine prices. After all, sooner or later, the debates over the cost of modernization will come to a point when the country will have to take urgent measures to bring its energy The grand opening ceremony of the new plant was attended by (left to right): Russian Gas Turbines’ CEO assets to date. Fortunately, we already have Nadezhda IZOTOVA, Inter RAO’s Management Board Chairman Boris KOVALCHUK, President and CEO of GE in manufacturers to help us with this. Russia and CIS Ronald J. POLLETT, Rostec’s Deputy CEO Dmitriy SHUGAEV, United Engine Corporation’s General Director Vladislav MASALOV, and Yaroslavl Region’s Governor Sergei YASTREBOV. By elena SheSTerNINa

ENERGY WITHOUT BORDERS | № 6 31 DECEMBER 2014  JANUARY 2015 17 INTERNATIONAL COOPERATION

Inter RAO Group already has an important asset in Turkey – Trakya Elektrik 18 | Between East and West Inter RAO Group has unveiled a global strategy that aims to improve the performance of the company’s existing assets and develop new power equipment supply projects. Inter RAO is not planning any acquisitions within the next two years, but says new joint projects abroad are possible in case they are proposed.

urkey is currently the ager said, explaining that the company Europe. Secondly, Inter RAO Group already most attractive for- does not exclude the possibility of creating has an important asset in the republic – eign market for Inter an alliance for acquisition of assets in the Trakya Elektrik power plant, which is why RAO, said Ilnar MIRSI- region. There are a few reasons for being the company is trying to develop a most YAPOV, a member of interested in Turkey. First of all, the country ecient strategy for its operations in the the company’s Man- ranks second after China in terms of power Turkish market. agement Board and consumption, with an average growth rate However, Inter RAO will stick to its “no head of its Strategy of 7 percent per year. The high power de- foreign acquisitions” policy, Ilnar MIRSI- and Investment Unit. mand is due to the nation’s growing pop- YAPOV said. “Today we need to focus en- He also said that the ulation, improved quality of life and rapidly tirely on the economic eciency of asset Turkish government developing tourism industry. According to management. This applies not only to the plans to implement a program to privatize the Turkish government, the country’s cur- Group’s international operations, but to all Tgeneration assets in 2014–2015. “We are rent per capita power consumption is 2.5 lines of business,” he said. “Assets acquired taking a lot of interest in this,” the top man- MWh per year; this is the lowest gure in by the Group have potential both for cutting-edge facilities. This combined heat INTER RAO GROUP FOREIGN ASSETS: and power plant is exceptionally com- EBITDA BREAKDOWN BY COUNTRY pact and technologically advanced. The Million rubles region’s unique climatic conditions make KZ 1 898 811 GE it possible to use sea water for cooling, while its moderate temperatures help GE 1 539 668 MD improve the overall power generation eciency. TR 664 666 AM “This is a landmark asset for us. It took us a long time to choose the plant and a MD 534 -92 TR lot of eort to eventually acquire it in De- cember 2012,” Ilnar MIRSIYAPOV said. “Now AM 325 -339 KZ Inter RAO has an important (although rather small) outpost to support the de- 2013 H1 2014 velopment of our international operations in Turkey,” he said. It is worth mentioning that the Mar- growth in value and improvement in oper- mara Region where the plant is located ational and nancial performance. Overall, is one of Turkey’s leaders in terms of GDP the company has extensive experience growth. Besides, with an LNG terminal that in diversied asset management, which handles 6 billion cubic meters annually, it allows us to convert the existing capacity is the national hub of gas transportation. into a positive cash ow.” However, the good location is not Mr. MIRSIYAPOV highlighted the follow- the only reason for the plant being a ing among the key initiatives of Inter RAO’s landmark asset. The potential of the Turk- global strategy: oering turnkey equip- ish market and the unique portfolio of ment solutions, laying the groundwork Trakya Elektrik’s control panel purchase and delivery contracts shouldn’t for Russian companies to enter promising be overlooked either. All the contracts markets, participating in privatization pro- are long-term and backed by the Turkish cesses in the target markets, getting new government’s guarantees. According to assets to manage in foreign markets, build- TRAKYA ELEKTRIK CHPP FEATURES Trakya Elektrik Director Andrei TASKAYEV, ing partnerships for joint management Capacity: 478 MW this removes fuel and commercial risks, of generation assets, collaborating with The CCPP operates in the combined cycle mode i.e. shortfalls in delivery or income. Also, international development institutes on (natural gas/steam) and features two gas turbines the power plant is one of the Group’s nancing construction of new cross-bor- and one steam turbine. most eective assets in terms of head- der power infrastructure, etc. Primary fuel: natural gas (backup fuel: diesel). count-to-capacity ratio. It employs only Natural gas supplier: state-owned company BOTAŞ 80 people, including administration sta, OUTPOST IN TURKEY (a take-or-pay contract expiring in June 2019). power plant workers, and maintenance Located 100 kilometers away from Istan- Power buyer: state-owned company TETAŞ (a take- personnel. bul on the coast of the Sea of Marmara, or-pay contract expiring in June 2019). Trakya Elektrik is one of the Group’s most By Tatyana SLOBODChIKOva

This combined heat and power plant is exceptionally The CCPP operates in the combined compact and technologically advanced cycle mode (gas/steam)

ENERGY WITHOUT BORDERS | № 6 31 DECEMBER 2014  JANUARY 2015 19 INTERVIEW

20 “I don’t think a revolution is the best option, but if something is objectively wrong in the industry, it needs to be changed”

It has been an eventful year for the Russian energy sector. Yet another competitive capacity selection, the district heating reform, the complex international environment – all this can significantly reshape the industry landscape in the future. In an interview with Energy Without Borders, Chairman of the State Duma’s Committee for Energy Ivan GRACHEV speaks about his view on the nation’s energy sector today and identifies short-time legislative priorities.

hat do you think to perform an energy audit would lead to mushroom- were the major 2014 ing of pseudo-audit firms and issuing of useless scraps events in the coun- of paper. With the new amendments, the situation is try as a whole and expected to change. the energy sector in The regulatory framework for heating has also under- particular that most gone significant changes. Amendments have been signicantly aected adopted that give a more important role to municipal the industry, the governments and formulate regulatory principles. We market and individ- have not been able to complete this work this year, so ual energy compa- we’ll continue in 2015. nies? Additionally, the year of 2014 marked the appearance First of all, it’s the so- of a new important concept, the so-called “alternative called liberalization boiler house,” which is an element of the rate regula- of gas exports. Now, at least two more companies, NO- tion mechanism. It is clear that market mechanisms WVATEK and Rosneft, will be able to export gas besides don’t work well in district heating simply because there Gazprom. This is expected to spur the development of are very few providers. And since there are no market the country’s exporting potential. The second is the tax mechanisms, regulated rates are a must. The district breaks that have been partially extended for deposits heating reform adopted this year is a step towards in the east following the creation of the eastern oil and addressing the existing problems. gas province. Speaking about energy efficiency, I’d like to highlight WAITING FOR INVESTMENT the amendments that broaden the scope of the rele- Looking back at the year just passed, one cannot but vant law and create a more diversified environment. mention the controversial results of the competitive After all, most experts with practical experience are capacity selection (CCS), which nished this past fall. aware of the fact that a requirement for all companies What do you think about them?

21 Interview

The CCS results were part of a bigger problem. I actually positive results, and therefore, is wrong in essence, while believe that the electric power industry reform has been the other half would disagree with this. essentially wrong. Has the pricing system adopted fol- lowing the reform resulted in fair pricing? No. By the way, Most projects under CDAs will be completed in 2016. both consumers and power companies agree on this. What’s next? There’s some pricing going on, but then it becomes clear I think the program will be extended, in one way or that capacity delivery agreements (CDA), for example, another. The architects of the reform believed that they have nothing to do with market mechanisms. Market would make market mechanisms work, but this did not mechanisms are a flow of private investment driven by happen. There has been a tenfold difference between market signals. If this does not happen and you have to capitalization and construction costs, and it has re- wriggle out somehow, putting some props, these are no mained the same. This means that the government will market mechanisms but some type of state regulation. still have to take on responsibility and ensure power In other words, the bulk of investments are still made by supply reliability in developing regions using non-mar- the government. Ask yourself a few simple questions: is ket methods. That is, we will still need a mechanism the flow of private investment in the energy sector now similar to CDA. However, it might be based on different dominating? After all, this is the essence of market-based principles. reforms. Have any market-based pricing mechanisms appeared that adjust, correct the system? The answer is How realistic are the plans to commission a series of obvious: we still don’t have any of these things. But this new facilities with an overall capacity of 173 GW by does not mean that the situation will not change in the 2030 without state support? future. They are not realistic without state support, since, in my opinion, the market mechanisms are not effective, at Top managers of many energy companies emphasize least to full extent. the need to bring the CDA mechanism up to date. Do you agree? QUOTAS AND PREFERENCES The country has regions that cannot meet their energy Replacing imports with goods produced at home has needs and those that produce a surplus of energy. In been identified as one of the government priorities. some regions, the CDA mechanism is completely unnec- How relevant is this for the energy sector and how essary, while in others, on the contrary, it is extremely realistic is it? useful and effective. This problem should be addressed in Replacing imports with goods manufactured at home line with the country’s overall development strategy. is first of all vitally important for the oil and gas industry. When our committee and advisory board held meetings As the head of the State Duma’s Committee for Ener- to make recommendations to companies, the latter gy, do you plan to make any changes to the regulato- considered them to be too revolutionary. A couple of ry framework to legislate for this? years ago we established a rule saying that 70 percent of Unfortunately, the situation is highly politicized. The projects had to become imports free as soon as pos- committee members have opposing views on this; sible. They told us then, “We don’t have this, we don’t I’m sure that it will be the same at the State Duma as a have that.” In my opinion, the government needs to get whole. Half of the MPs would agree with me on the fact involved here. that the power industry reform has not produced any Will the Committee for Energy make any legislative proposals concerning this issue? Yes, sure it will. We are now updating our groundwork IN SOME REGIONS, THE CDA and proposals relating to quotas and tax preferences. I think we’ll have some bills ready by the beginning of MECHANISM IS UNNECESSARY, WHILE next year. In the power industry, in my opinion, the situation is sim- pler as joint ventures with Siemens and General Electric IN OTHERS, ON THE CONTRARY, IT IS already manufacture some of their products completely locally. I think that eventually they will be able to do this EXTREMELY USEFUL AND EFFECTIVE. for the entire range of capacities.

THIS PROBLEM SHOULD BE ADDRESSED ENFORCING DISCIPLINE It turns out that despite the fact that the energy IN LINE WITH THE COUNTRY’S OVERALL industry reform is complete, there’s still much to be changed. DEVELOPMENT STRATEGY I don’t think a revolution is the best option, but if some- thing is objectively wrong in the industry, it needs to be

22 The eNerGY eFFICIeNCY LaW ShOULD Be MOre reaLISTIC, aDaPTeD TO rUSSIa aND FLeXIBLe

Non-payment of heat and electricity bills is a hot issue today. The State Duma has been reportedly drafting amendments aiming at tightening the regu- latory framework… I don’t think it’s necessary to tighten up the rules for households, since they are the most disciplined group when it comes to paying bills: their collection rate is 95 percent. As for those who don’t pay, their situation is usually hopeless. But for the intermediaries, I fully support the tougher measures. I know for sure that three new legislative proposals will be brought forward. The rst one is increasing responsibility for all intermediaries. The second is mandatory direct postings. The third one is tightening up the rules for the so-called non-discon- nectable consumers, as they account for a large portion of non-payments.

At the beginning of our conversation, you said that changed. An example for this is power supply compa- the regulatory framework for energy eciency will nies. Russia had implemented the Third Energy Package be improved. What amendments are being drafted? earlier than Europe did. I actually don’t know any other The changes will primarily aect the mechanism for country besides Russia that does not allow combining capturing value from energy eciency projects. It’s generation, transmission and supply. Take Nord Pool (the common knowledge that Russia uses about twice as Northern European energy market – Ed.), for example. It much natural resources as other northern countries do. does not have this; direct agreements are dominating. In So, this area has enormous potential. Moreover, Europe, Germany, Japan, the U.S. and Canada, it’s the same. The for example, is interested in our unlocking this potential, problem is that power supply companies are often used simply because if we do this, gas will be cheaper for in Russia for withdrawing money from companies, or them. I voted against the rst energy eciency bill. It was even from the country. This has already caused an entire a formality: the regulations that worked in Europe were series of bankruptcies. We are going to change this by adapted to our environment, but they did not work here. introducing new regulations saying that there are situa- For instance, in Europe, an increase in prices immediately tions when the fundamental principle that power supply results in higher energy eciency. In Russia, it’s dierent: and generation must be divided should not be adhered following the energy reform electricity prices rose 12- to. By the way, these amendments have already been fold, but no increase in energy eciency followed, which passed by the Committee. A classic example of what I’m means that the system’s eciency did not at all improve. talking about happened in Kursk Region. After a power There are objective reasons for this: holes in pipes, for supply company went bankrupt, IDGC of Center was example. So I think that the law should be more realistic forced to get 350,000 new consumers. All of them usually and adapted to Russia, as well as more exible when it have to sign new agreements, which expire within six comes to its use with respect to dierent facilities. months; after this, according to the law, a competitive selection is announced to choose a new power supply We’ll be soon celebrating Energy Professional’s Day company for them. So, the Kursk Region Duma sent us and New Year. Any holiday wishes for Russian energy many requests asking to legislate for a way to address professionals? such issues, i.e. to allow power generation and grid com- Happy Energy Professional’s Day and New Year! May all panies to work directly with consumers in certain cases, your wishes come true! I would also like to wish you all so that this fraudulent bankruptcy conveyor stops. As for lots of energy, since there is so much to be done! concrete mechanisms, we’ll dene them in the second reading. By andrei ShChUKIN

ENERGY WITHOUT BORDERS | № 6 31 DECEMBER 2014  JANUARY 2015 23 REGION 24 | The Mother Lode of Transnistria’s Power Industry

Although 14 years have passed since Transnistria was declared independent, it is still an unrecognized state. However, it doesn’t prevent the small country from exporting power. The republic’s Moldovskaya TPP, which has recently celebrated its 50th anniversary, supplies the power needs of both Moldova and its neighbors.

TRANSNISTRIA

Area: 4,163 sq. km Population: 505,153 Key facilities: Moldova Steel Works, Moldovskaya TPP, Tirotex (a textile company), KVINT (a cognac distillery) MOLDAVIAN REPUBLIC Key Electricity and Power TRANSDNIESTER Supply Companies

DUBĂSARI DUBĂSARI HPP Installed capacity: 48 MW CHIȘINĂU Owner: Transnistria’s Ministry of Industry Commissioned in: 1954 Features: a run-of-river power plant on the Dniester River. Its rst two power TIRASPOL generation units were commissioned on December 25–27, 1954. Another two units were launched in the rst half of 1955. Dubăsari HPP and a 110 kV transmission line DNESTROVSC between Dubăsari and Chișinău and Dubăsari and Tiraspol were the rst new power facilities built in the Moldavian Soviet Socialist Republic as part of centralization of the country’s power supply system. In 1977, Dubăsari HPP was showcased at the VDNH (the USSR’s Exhibition of Achievements of the National Economy) as a highly reliable and automated power plant. Outlook: a reconstruction project was developed to enhance the safety of the plant’s hydraulic structures and improve the reliability of power supply. The rst stage of the project is currently under way. It includes replacement of all the main and auxiliary equipment (except hydropower turbines and hydro generators).

2,568 MW – the cumulative installed capacity of Transnistria’s power plants 1,200 MW Dubăsari HPP was commissioned as part of is the maximum demand of the GOELRO program and the plans added to the entire Moldavian energy it during the postwar period system The Mother Lode of Transnistria’s Power Industry

FACTS

• The power plant was designed to run on Donbass coal. • It is located on the western bank of the Cuciurgan Reservoir, at the border with Ukraine’s Odessa Region. Its construction took 800 days and used over 1.5 million cubic meters of ground, 85,000 cubic meters of concrete and reinforced concrete, over 15,000 cubic meters of precast concrete and 1,200 metric tons of metal structures. • The power plant was origi- nally called Cuciurgan TPP. Once launched in 1964, it was Moldovskaya TPP was built on the western bank of the Cuciurgan Reservoir renamed Moldovskaya TPP. • It supplies 50 percent of Moldo- MOLDOVSKAYA TPP unique station can be powered by three types va’s power needs. Installed capacity: 2,520 MW of fuel. Since it has both coal- red and oil/ • Moldovskaya TPP can supply Owner: Inter RAO Group gas units, the plant can generate power even electricity via the existing power Commissioned in: 1964 if the amount of one or two types of fuel is transmission lines to Moldova, Primary fuel: coal, heating oil, natural gas insucient. southern regions of Ukraine, Features: one of the biggest thermal power After the dissolution of the USSR, Moldovska- Romania, and some other plants of its kind in Europe. Its rst 200 MW ya TPP supplied electricity to consumers in countries. power generation unit was commissioned on Moldova and southern regions of Ukraine, • The plant is the republic’s sec- September 26, 1964. In August 1974, after the as well as to Bulgaria and Romania. Later the ond largest corporate taxpayer. launch of the tenth unit, the plant’s capacity demand for electricity considerably declined, reached 2,020 MW. In 1980 and 1982, as two forcing the plant to mothball some of its additional 250 MW combined cycle power units. plants were put into operation, the overall Outlook: in March 2015, power generation capacity of Moldovskaya TPP increased to unit No. 7 will be shut down for major repairs. bn kWh 2,520 MW. After this project is over, the plant’s program 400 of electricity has been Those were the rst combined cycle power to renovate the mechanical equipment at generated by Moldovskaya plants to be installed in the Soviet Union. This eight of its generation units will be completed. TPP over 50 years Burnt 90 mn t of coal 30 mn t of heating oil 30 The plant’s main building has ten power The control panel of power generation unit bn cbm of gas generation units. Eight of them run on pulverized No. 9 has a state-of-the-art data control and coal, while two units are powered by heating oil display system Photos by alexander POPOv

ENERGY WITHOUT BORDERS | № 6 31 DECEMBER 2014  JANUARY 2015 25 ENERGY-SAVING TECHNOLOGIES 26 | Open for Metering

The Russian wholesale and retail power markets use data provided by hundreds of thousands of automated electricity meters and millions of local metering devices. Regulated metering is the key element of the market-driven development model for the Russian electricity market which has currently reached a new stage of technological development. We have discussed the multifunction capabilities of metering systems with Silviyan SEU, General Director of the Energoauditkontrol engineering center and one of the thought leaders of the project to develop metering systems in Russia.

the equipment itself and the top-level I am condent that both large software, which makes it possible to do a enterprises and the housing and utilities whole range of tasks, including centralized sector need such systems. The Russian automated control, measuring of Ministry of Energy agrees with this. technological parameters (e.g. electricity Its roadmap for 2013–2018 includes consumption, current, tension – dozens of introduction of smart electricity metering. them), remote control of power facilities, According to the agency’s plans, by 2020, collecting and delivering real-time or about 19 percent of payments will be analytical data, forecasting dierent made on the basis of data provided by technological situations, etc. such meters. By using the data coming from its metering sites, a company can develop a IN SEARCH OF UNTAPPED RESERVES set of eective energy saving initiatives, Next year, Energoauditkontrol will i.e. reduce its expenses and cut its be celebrating its 12th anniversary. production costs. Such systems are Throughout its history, the company has called “smart” systems. They benet the been actively lobbying for introducing company, and their “intelligent” contents smart metering systems at Russian can be customized to meet the needs of enterprises. How successful were your Silviyan SEU, General Director of any type of business. eorts? Energoauditkontrol, an engineering center Drawing on our previous experience, we try Can you give any concrete examples? to explain to our customers where exactly For example, we have recently they have potential savings and untapped SMART APPROACH participated in a pilot project to create reserves. We can show these reserves to Mr. SEU, when speaking about an automated integrated energy them visually – our in-house software, metering systems, you say they should consumption metering system for one of which already collects data from about not be confused with installation of IKEA Russia’s malls. 400,000 metering devices across Russia, individual electricity meters. What’s the The key objective of the project was processes huge amounts of information dierence between the two? to introduce a more accurate system (which people around the world now call First of all, when it comes to metering for estimating utility bills submitted to big data), allowing for building complex energy consumption, customers should the mall’s tenants, as well as obtaining mathematical models and calculations. be divided into two groups – businesses information and controlling the actual Here is a simple example: since 2005, and individuals. For most individual users, consumption by the utility systems that Energoauditkontrol has been building it’s enough to have a multi-rate meter ensure smooth operation of the shopping an automated metering system for the that causes as few problems as possible. center. Under the project, we installed wholesale, and later the retail electricity Periodic inspections, maintenance or IEC-compliant, intelligent electricity, water market, for Russian Railways. proper use issues is something they don’t and heat metering systems. They use Between 2005 and 2013, Russian want to worry about. the smart metering technology, which Railways’ wholesale market automated For businesses, one of the most means that data ows from the metering electricity control and metering system important things is what the setup of devices to the system and vice versa. The was installed at over 1,200 traction their automated metering system is like. capabilities of all the installed metering substations with a voltage of 220 kV, 110 Throughout their evolution, such systems devices include long-term data storage, kV and 35 kV. Given the success of the have had many names, and today they are fault detection, autonomous readings, project and its economic eects, the called information and metering systems multi-rate metering, measurement of company has continued introducing the due to the multifunctional nature of both technological parameters, etc. system. We developed and have been working on those that require on-site visits. Software plays a crucial role in this project, as with the huge number of devices that need reprogramming within such a short Open for Metering period of time, it would be dicult and, what’s important, very costly to do this manually, as it would require engaging many people. Our team has developed a set of software modules that can reprogram metering devices remotely. The law requires that all metering devices and systems undergo initial and periodic metrological inspections to make the companies’ electricity metering and information systems used for commercial purposes legitimate. To help its customers address these issues, Energoauditkontrol provides metrological Automated metering systems enable companies to develop a set of eective energy saving support for all its projects and works. This initiatives, that is, to cut costs includes organizing and holding metering equipment checkups; performing metrological analysis of technical updating the largest smart metering meet our customers’ demands and wishes. documentation; developing and assessing project on the Russian retail market – over We continuously develop our software’s methods for metering electricity, capacity, 240,000 metering sites scattered between functionality and increase the number and liquid and heat consumption; Kaliningrad and Sakhalin. of supported metering technologies. It arranging and doing tests of metering We have carried out large projects to is only by doing so that we have been equipment (including automated create wholesale electricity market systems ensuring demand for it in the industry for electricity metering and information for Federal Grid Company, Gazprom, many years past. Software updates are free systems used for commercial purposes) Transneft, SIBUR Holding, Moscow Metro, for our customers. for type approvals; arranging and doing MOSENERGO, IDGC of Centre, Permenergo Energoauditkontrol has been providing metering device and equipment tests and other companies. comprehensive maintenance services under the GOST R standard, and much A number of Russian measuring for Federal Grid Company’s automated more. equipment manufacturers started electricity metering and information production of smart meters, which made it systems used for commercial purposes The creation of metering systems is possible to minimize the use of imported (both hardware and software) and somewhere on the border between devices. According to the most recent Russian Railways’ metering systems for the power industry and IT. Do you consider data, Russia imports only 5 percent of its wholesale and retail electricity market. yourself to be more of an energy electricity meters; this means that the This year, the decision to re-introduce professional or a programmer? market is saturated with domestic products, daylight saving time in Russia added You are right. This is absolutely true. which makes the systems more aordable. some extra work for us. We will complete However, rst and foremost, I think of reprogramming of meters for our two myself as an energy professional, since this ADJUSTING CLOCKS BACKWARD AND largest customers – which is more than is what I have been doing all my life – I DRIVING TECHNOLOGIES FORWARD 300,000 devices – in the shortest time participated in large energy construction Do the systems being installed require possible, in accordance with contractual projects and oversaw an energy company. maintenance? How complex are they in obligations. Most of the devices have That’s why I’d like to wish my colleagues terms of operation? already been adjusted; we are currently across Russia a happy Energy Professional’s Just like any other systems that combine Day, which is coming soon. We are all hardware and software, metering systems The diagram shows how an electricity metering and united by two very important concepts – need to be updated and kept in working information system works reliable and uninterrupted power supply. condition. This is not only a tribute to I would also like our power industry to be innovations, but a regulatory requirement the most modernized and technologically for systems used to meter electricity for advanced. Let our common enthusiasm commercial purposes. The software, top and strong sense of responsibility level of control – like RDM, which we contribute to the industry’s continuous developed in-house, for example – is development. constantly evolving due to both changing regulatory requirements and the need to By Ivan SOKOLOv

ENERGY WITHOUT BORDERS | № 6 31 DECEMBER 2014  JANUARY 2015 27 TECHNOLOGIES 28 |A Kilowatt Saved is a Kilowatt Earned The role of technologies in the energy sector is more important than in any other industry. If one does not skimp on introducing recent technological advances, the investment will not only pay back, but also provide a permanent source of savings. One of such technologies is the automated electricity metering system.

ousehold electricity consumption increases TYPICAL AECMS LAYOUT every year. People have FOR GARDENERS’ PARTNERSHIP more and more home appliances in their houses and apartments, causing the energy use by residential and utility buildings to Hcontinuously go up. In this situation, electricity metering systems assume key importance. With cost reduction policies being universal practice, introduction of automated electricity control and metering systems (AECMS) may become the most effective measure for this. For DCTU instance, Pskovenergo achieved energy savings of 0.9 million kWh in 2014 alone Operator/user by replacing old metering devices with (consumer) smart meters, which have a higher de- gree of accuracy and are more sensitive to low currents. Meters

BIG SAVINGS FOR SMALL BUSINESSES How does this work? Let’s look at asso- ity bills based on readings of a single all the payments to the power supply ciations of small countryside gardeners, electricity meter. But how well is the company. Besides, electricity consump- the so-called “non-commercial garden- metering inside the partnership done? tion without metering does not at all ers’ partnerships” (NGPs), for example. Are the numbers accurate? Does each help achieve energy savings. In other On the one hand, such organizations consumer pay his or her electricity bills words, it becomes a matter of energy usually consist of quite a lot of electric- in full? Practice has shown that the efficiency, which is a hot topic now. One ity consumers; on the other hand, they majority of NGPs fail to build a reliable of the ways to address this issue is to represent relatively small systems in electricity metering system, which use automated electricity control and terms of the power they consume. means that electricity consumption is metering systems (AECMS). As a rule, an NGP is a client of a power poorly controlled. This, in turn, leads to An AECMS is a combination of supply company and it pays electric- the need for additional funds to settle hardware and software that consists of electricity meters, data collection and Pskovenergo achieved can be transmitted, upon request, along transmission units (DCTU), and com- energy savings of nearly mobile communications channels to a munication channels for transmitting control unit, i.e. a regular PC with a GSM data on electricity consumption from 1 million kWh in 2014 modem. However, even this seemingly the meters to the DCTUs and from the alone by replacing old new technology has already become DCTUs to end users, as well as special metering devices with outdated. The state-of-the-art systems software. The system is quite simple: smart meters now use cloud technology instead data on electricity consumed (or gener- of GSM. With the cloud technology, a ated) is stored in meters installed on the DCTU is permanently connected to the payers’ land plots (or in their apartments, Internet, allowing users to get data with stairwells, production sites, etc.). the last meter is a few kilometers away the help of online services, while special These devices are on the state register from the DCTU, which means that it is software controls collection, storage and of measuring devices; they pass state impossible to transmit the signal directly displaying of data on electricity con- inspection when leaving the factory from it because of attenuation. To make sumed by each customer. where they are manufactured, which sure that even the most remote meters The data contain information about guarantees their claimed electricity transmit data to their DCTUs, the sys- both electricity consumption and the metering accuracy. The data is then tems use relaying: the meter that is clos- so-called power quality, i.e. such pa- transmitted to the DCTU along the er to the DCTU amplifies the data signal; rameters as voltage, frequency and load existing wires. This is when a problem the next meter along the chain does the current. may arise with the accuracy of electricity same, and so on. So, the system works “What is electric power? It’s current metering, resulting in extra costs. So pretty much like a network. Another multiplied by voltage per unit of time. what’s the snag? The thing is that the way of transmitting data from meters to Therefore, by comparing different data biggest problem of such systems is how DCTUs is to use radio waves.” sets received from the system, we to ensure reliability of data transmis- can assess the accuracy of electricity sion from meters to DCTUs. The poor NO SCIENCE FICTION metering,” Sergei USTINOV said. “Another state of NGPs’ electricity equipment Today’s AECMSs are based on PLC (pow- extremely useful function of such sys- makes the problem even worse. Besides, er-line communication) and Wi-Fi, data tems is remote load control. The system the reliability of data transmission is transmission technologies that make it allows the operator to either restrict significantly affected by interference possible to ensure reliable metering of power consumption or completely cut created by the so-called “noisy” land- electricity consumed by every customer. off electricity supply to any customer. owners who use appliances that cause Despite the fact that PLC was invented in Well-designed AECMSs can perform the whole range of interference effects. the middle of the 20th century, it started quite a wide range of tasks. This is why Here is how an AECMS helps address to be used in telecommunications such systems have been lately actively this problem. only recently. PLC is based on using an installed at all kinds of electric power “The system is built in such a way that electric power transmission system as a industry facilities, from power plants and each meter relays the signals generated conductor for carrying data. Wi-Fi, which factories to electrical grid facilities and by the previous meter,” explains Sergei allows an electronic device to exchange end users. In sum, such systems can be USTINOV, CEO of TanKos-elektroprojekt, digital data using radio waves, is some- used almost everywhere. There is only a Russian company that installs AECMSs what newer than PLC; it was created in one necessary prerequisite – a desire to across the country. “The distance be- 1991. These two technologies allow each bring down electricity costs.” tween them sometimes reaches about meter to transmit data on electricity 40 meters; there are systems in which consumption to the DCTU, from where it By andrei ShChUKIN

44 Altufyevskoye Shosse, www.tancos.ru Moscow 129323 [email protected] +7 499 9480183

Over THE FULL RANGE OF ELECTRICITY Over 100 METERING SYSTEM electricity 14,000 SERVICES, FROM metering systems households served by our INSTALLATION TO installed at control center MAINTENANCE gardeners’ partnerships

ENERGY WITHOUT BORDERS | № 6 31 DECEMBER 2014  JANUARY 2015 29 A DISSENTING VOICE 30 | Change in Priorities Vladimir EREMIN, Senior Consultant at Branan, believes that transition from extensive development, large-scale construction projects and expensive purchases to improving efficiency through the use of internal resources is the key to overcoming the industry crisis. Our new column titled “A Dissenting Voice” features his summary of the 2014 results for the Russian power industry.

Following a decade of the power which took place in 2014, conrmed the projects will be cost eective only for industry’s development driv- that investors were ready to build consumers which currently pay more than en by growing demand, the solar plants (with applications 3–3.5 rubles per kWh. outcome of the 2015 compet- exceeding the planned capac- Small cogeneration has considerable itive capacity selection (CCS) ity for selection by 280 MW), potential in boiler house reconstruction. proved shocking to many but the demand for construc- In this segment, power can be supplied to market players. With shrinking tion of wind turbines and distribution grids only, and the economic power consumption and the small hydro power plants was situation is adversely aected by man- commissioning of new power rather low. The key obstacle was datory grid tari payments. Because of plants guaranteed under CDAs, the requirement to produce the additional expenses for transmission ser- 329 generation facilities with a total equipment needed for them locally: vices, power generation costs need to be capacity of 16 GW turned out to be the number of existing production fa- reduced almost to the wholesale market redundant and are now running the risk cilities in Russia is insucient, while their level (1.8–2.0 rubles per kWh), which as a of losing a substantial portion of their reve- construction is hampered by the vague rule makes projects to build new power nue in 2015. outlook for demand for their products plants unprotable. The government’s decision on the pool beyond 2020. *** of “must-run” assets anticipated before Adoption of missing laws and regula- The concept of paying for reserve (max- the end of 2014 will be important for tions on tari support for the renewable imum) grid capacity is an additional risk determining whether the current selection energy in retail markets might give the for investors in distributed generation. For procedure and estimation model need to green power sector a new impetus in consumers, this idea looks like an attempt be preserved. If most requests of the gen- 2015 driven by a more extensive use of to improve the grids’ nancial performance eration companies that failed to qualify at renewable energy sales to oset grid as “last mile” agreements are being termi- the CCS are granted, consumers in the Eu- companies’ losses. At the same time, it is nated and discounts on providing connec- ropean part of Russia will have to nance possible that the lawmakers will restrict tion to the power grid for consumers with about 10 percent of additional redundant the development of RES in the retail mar- a capacity of 150 kW or less expire. capacity. Taking into account the expected ket by regulating the percentage of grid Some drastic changes in the structure economic stagnation, no steady growth losses purchased from “green” sources and economy of the power grid system in power consumption is likely to be seen or even setting out rules requiring that might happen following introduction of within the next three to ve years, and, equipment should be produced locally. benchmarking announced back in 2011 unless there is an eective mechanism for *** and aimed for long-term regulation of decommissioning of costly power plants, It is important that projects to build manageable costs and investment control, the annual redundant capacity may reach small gas-red power facilities are as well as after approval of a tari-setting 22 GW, as estimated by Branan. still able to produce a positive eect principle that takes into account the load The current situation with the CCS for investors. One of the increasingly of supply centers. These concepts were suggests that the generators’ nancial popular types of projects are BOOT, in extensively elaborated by the Federal Tari performance is likely to weaken in years to which power plants are nanced, con- Service and the expert community in 2014. come and causes low investment activity structed and operated by professional *** in the industry overall. power market players, while the risks are Let’s sum it all up. There are strong reasons *** divided between consumers and oper- to expect that 2015 is going to be a year In the context of the problems facing ators. Nevertheless, the outlook for this of priority changes. Backing down from the conventional energy industry, the segment somewhat deteriorated as well. extensive development, large-scale con- renewable energy segment looks more This was partly caused by the freezing of struction projects and expensive purchas- promising. State support mechanisms gas and grid service rates, which resulted es, the power industry will move on to and tari incentives have become the key in a drop in the annual growth rate of improving eciency through the use of drivers for projects in this area. power prices in the retail market to 5–6 internal resources of individual companies The second selection of renewable percent in the foreseeable future (before, and the industry as a whole. This is not energy projects competing to qualify for investors had expected a 10–15 percent only a way to overcome the crisis but also capacity delivery agreements (RES CDA), growth). In this pricing environment, a key to future development. 10 Pervyi Obydenskiy Pereulok, Moscow 119034 +7 (495) 961-12-06; +7 (495) 252-04-32 www.branan.ru

haPPY eNerGY 2015 will be a transitional year for the Russian power industry, since the possibilities for extensive growth are PrOFeSSIONaL’S DaY! exhausted and development is only possible through the use of internal resources and innovative solutions. At The year of 2014 marks the 15th anniversary this stage, all companies need comprehensive support of our company, and throughout all this time to ensure fault-free strategic decision-making processes. we have celebrated the energy Professional’s Our services include: Day with special feelings. Our clients now Carrying out power market research (Russia and neighboring include generation companies which control countries) about 60 percent of the Russian power Designing comprehensive development strategies industry’s cumulative installed capacity, Developing specic strategies (the energy sector, investments, as well as grid companies, power supply innovations and marketing) companies, engineering companies and Carrying out diagnostics and developing nancial and economic major power consumers. models for energy businesses Today, we are proud of our participation Performing comprehensive investment analysis of construction, in over 150 successful projects in the energy modernization and decommissioning projects involving power assets and infrastructure sector, including such milestone initiatives as Developing investment programs and dening nancing assisting in the reorganization of raO UeS of mechanisms and sources Russia, working out development strategies Attracting investment in energy projects for the Far east’s power industry, MrSK Developing ecient organization for energy businesses holding, Inter raO, Moscow Power Supply Comprehensive organizational and legal support to energy projects Company, and many others. Dear colleagues, your work literally lights up our life and warms our homes. On your special day, we sincerely wish you success Branan is a unique energy expert specializing in the and continued development. Russian market. Our strengths:

Branan team Extensive expertise in power, housing and utilities Considerable strategic consulting experience Unique methodology and proprietary tools (power market models and tari and balance models for the regional and federal levels) Large power market data base and vast industry knowledge Long-term contracts with industry experts

ENEENERGY WITHOUT BORDERSERS | № 6 31 DECEMBER 2014  JANUARY 2015 31 NB 32 | Electrification in pictures Russian energy professionals celebrate their special day on December 22, the day when the legendary national electrification plan, GOELRO, was adopted. Back in the early Soviet era, the construction of new power facilities stipulated by the document required complete commitment from workers and factories, creating a need for visual propaganda that would inspire them to extraordinary achievements. This is why the electrification of the country was also the beginning of the Soviet energy poster, which illustrated the most interesting chapters of the energy industry’s history. graphic five-year plan 1920s: science fiction 1930s: records Vladimir LENIN was so passionate about The construction of new power plants spurred the the idea of keeping to the GOELRO plan to development of heavy industry and transporta- electrify the country that he discussed it inces- tion, bringing the dawn of the era of trains powered by santly, including at a meeting with the writer H.G. electricity. Moreover, by mid-1930s, the country’s power WELLS. The science ction author, however, did industry became almost completely independent of not believe that the prospects enthusiastically imports. This was also the time of the launch of Europe’s described by the leader of the international largest hydro power plant, on the Dnieper River. proletariat could turn into reality, later dismissing them as “the utopia of electrication.” Neverthe- The Soviet art gave rise to a new style – socialist realism. less, the GOELRO plan, which included construc- Artists started using photomontage, “played” with tion of 30 new district combined heat and power o cial gures, and drew diagrams and other elements plants and hydro power plants, was completed that would later be called “infographics.” Apart from in full. calling for achievements at work, the posters also told factory and collective farm workers about health and “After the revolution, safety rules. our young generation of artists was full of hidden energy, and living by war time all it needed to show itself were large 1940s: rules commissions from the Dozens of large power facilities were destroyed people,” El LISSITZKY, during the Great Patriotic War, since its very an architect and beginning. Almost 1,500 steam and water turbines and designer, wrote about over 11,000 generators were sent to Germany from the the poster art of USSR. The country had to evacuate equipment from the 1920s. Printing the occupied areas to the east and commission new equipment was power facilities. scarce; copies were made manually, The central themes of posters printed during the Great with the help of Patriotic War were energy saving techniques (which were stencils. The authors expected to benet the front line) and large-scale produc- made up catchy tion of ammunition. The color palette was dominated by rhymes. However, red and shades of gray. After the war was over, the hard- the most famous slogan ever printed on energy edge and vivid graphic images softened, and the angular posters was not rhymed. “Communism is Soviet slogans adopted a lyrical tone. “O lovely Motherland, o power plus the electrication of the whole dear cherished parent, we’ll make you stronger with electric country,” it said. current,” the energy posters of the late 1940s promised. mass metaphorically 1950s: production 1960s: speaking

The target gures for the sev- en-year period between 1959 and 1965 set the energy sector new ambi- tious goals. The country’s energy systems were being extensively integrated; the next step after supplying electricity to the industrial sector was to completely electrify the nation’s countryside. This is when energy professionals got their own day, which was introduced by a special order of the Supreme Soviet of the Soviet Union in May 1966. In memory of the day the GOERLO plan was adopted, it The country launched crash construction projects overseen is celebrated on December 22. by Komsomol (the youth division of the Communist Party) and designed to harness the energy of mighty rivers, making it work Metaphors became rmly entrenched in for the benet of the national economy. These included reconstruc- the poster art, bringing new symbols and tion of the Dnieper hydro power plant and start of construction of signs that had not been used before. The the Kuybyshevskaya and Stalingradskaya HPPs. After power lines dove, globe, hammer and sickle, sun and stars – these and many other elements be- were built between the Volga hydro power system and Moscow, the came part of the visual propaganda arsenal. The theme of peaceful atom was no less nation began extensive research into the development of energy important than that of electrication of the countryside on posters of those times. systems and ways to ensure their uninterrupted operation.

While energy saving techniques was still a recurrent theme of the energy of “energy” posters, by late 1950s, the visual propaganda in general 1970–1980s: consumption had underwent signicant changes. After the cult of Stalin’s personality was denounced, the poster art became more diverse Instead of individual factories, the USSR started building the so-called and witty. The Moscow Union of Artists served as a platform for “regional industrial complexes,” or clusters, which, in turn, had very high elec- establishing Promgraka, an association of artists who received tricity needs. The country commissioned new nuclear power plants and united the commissions from industrial enterprises and the energy sector. HPPs on its largest rivers – the Dnieper, Volga, Kama, Angara and Yenisei – under the umbrella of the Unied Energy System. liberal Although the construc- Post-USSR: economy tion of new industrial The changes happening in the country and energy facilities required restructuring the energy indus- was still on the agenda, try and dividing the former Soviet republics’ fewer and fewer posters energy assets. This was also the time of the were devoted to con- establishment of RAO UES of Russia, which struction projects, and underwent a restructuring a decade later. more and more of them advertised consum- er goods. Calls for Today, posters help energy companies address setting new industrial practical issues such as warning employees records faded into the to be careful at work or asking electricity background: factory consumers to be disciplined payers. They also walls now mostly had use posters in various promotional campaigns, health and safety including for organizing poster contests, while guidelines on them. archive materials turn into art that is much valued by connoisseurs and become highly desired items for collectors.

ENERGY WITHOUT BORDERS | № 6 31 DECEMBER 2014  JANUARY 2015 33 PHOTO EDITOR’S CHOICE 34 |34 | The Energy Industry in the Year Just Passed

What will the year of 2014 be best remembered for? Energy Without Borders presents a photo report of key 2014 events for industry players.

Saint Petersburg celebrated the 100th anniversary of the Russian bulb. In 1914, the rst Russian in- candescent lamp named “Svetlana” was produced at Aivaz plant. The name comes from the three Russian words meaning “an incandescent light bulb,” abbreviated to their rst The XXII Olympic Winter Games and the XI Paralympic Winter Games in Sochi were syllables. The history of the lamp among the most signicant events in the passing year. A number of power generation continues to unfold, with high-tech facilities were built specically for this occasion, including 200 MW Dzhubginskaya CHPP (an light sources, SvetaLED® lamps, be- asset of Inter RAO Group), which satised about one fourth of the peak demand during the ing produced by Svetlana-Optoelec- Games. The power plant generated about 20 million kWh of electricity over the rst week tronics, a Saint Petersburg-based alone, while on the Olympics’ opening ceremony day, February 7, it fed 4.3 million kWh into company. the grid.

Russian President Vladimir China to build a high-capacity PUTIN signed a number of coal-fired plant in the Far East. agreements during his offi- An agreement between RusHy- cial visit to China in late May, dro and POWERCHINA dealt with some of which dealt with the development of small hydropower energy sector. Specifically, Inter plants in Russia, while RAO Energy RAO Group and China Huaneng System of East signed agreements Group signed a letter of intent with Dongfang Electric Interna- on cooperating in the electric tional Corporation to build new power industry. The Russian side gas turbine plants at Vladivostok- expects to attract funding from skaya CHPP-2. In September–October, Inter RAO – Engineering carried out an unprecedented mission to transport a gas turbine with a generator to the construction site of unit No. 12 at Verkhnetagilskaya TPP. To do this, the company used a special 104 meter long road train designed for carrying oversize load and equipped with a Greiner load bed for even distribution of load between trailer axles. Each axle carries 15 metric tons, which enabled the load train to cover a distance of 337 kilometers twice without damage for the Russian roads and bridges. First, the 308 metric ton generator was transported to the destination, followed by the 384 met- ric ton gas turbine. The road train is the only vehicle of this kind in Russia; so far, there have been no precedents of these vehicles covering such long distances in Europe either.

In March 2014, a new region appeared on the map of Russia: the Republic of Crimea, with the capital Simferopol and the federal city of Sevastopol. And a month later, the Russian Ministry of Energy discussed ve scenarios for the future of the Crimean power industry, eventu- ally approving a plan that would make the new region independent of the Ukrainian energy The Omsk branch of TGC-11 is completing system. The two-and-a-half-year plan includes construction of the second stage of Relero, construction of new gas-red combined heat and a district heating pipeline, which will make power plants (CHPPs) with an aggregate capacity it possible to connect new facilities with of no less than 700 MW; building of two dou- a total area of about 200,000 sq. meters ble-circuit 220 kV Buzhora (Anapa)–Feodosiyskaya to the district heating system. The total aerial cable lines; expansion of the 500 kV Buzhora length of the pipeline is 3,400 meters. This substation by installing two 500/220 kV autotrans- year’s investment in the project, which is formers; and other activities. According to Russian expected to be completed within three Minister of Energy Alexander NOVAK, investments years, exceeded 160 million rubles. in the projects will total around 130 billion rubles. In the meantime, the Russian govern- ment issued a decree to approve a road map called “Introduction of the Target The III Energy Sector Spartakiada Games Both events were held in Moscow. The Model for the District Heating Market.” supported by the Ministry of Energy and the Spartakiada Games, which this year included The Ministry of Energy proposed a new V Energy Sector Futsal Cup were the main 12 dierent events, attracted more than one heat market model based on unied heat sports events in the industry. thousand energy sector workers from across supply organizations, or UHSOs (a UHSO the entire country. Inter RAO’s team had a is a unied purchaser and supplier of heat convincing overall team win, with MOESK and and the only organization responsible for IDGC of Center taking the second and the third reliable heat supply), and liberalization places, respectively. of prices, which would align them with Twenty four energy companies from across the so-called “alternative boiler house” fair the country took part in the anniversary energy price. The deadline for transition to the sector futsal cup competition called “Electric new heat market model was extended to and Nuclear Power Industry.” With a 3–1 victory 2023. The power to decide upon the nal over SUENCO team in the nal match, Inter phases of the reform was delegated to RAO’s futsal players won the cup for the third local authorities. time in a row.

ENERGY WITHOUT BORDERS | № 6 31 DECEMBER 2014  JANUARY 2015 35 EVENT CALENDAR December – January

World Future Energy Summit (WFES) 2015 January 19–22, Abu Dhabi, UAE

The World Future Energy Summit is held annually in the capital of the UAE. In 2015, it will be dedicated to renewable energy sources (RES), energy efficiency and clean technologies. WFES 2015 will be co-located with the International Water Summit (IWS), Abu Dhabi Sustainability Week (ADSW), EcoWASTE (a new sustainable waste management exhibition) and other events. Together, the events are expected to attract 3,200 exhibitors and over 30,000 visitors from 150 countries.

Wind Power China 2014: The ХII International Wind Energy Exhibition December 18–20, Shanghai, China

Wind Power China has been held annually since 2003 for key players in the wind energy market. The exhibition will feature recent advances and services in generation and consumption of wind power, one of the main sources of renewable energy worldwide. On an area of more than 10,000 sq. meters, the exhibition will show turbine generators, o-grid and grid-connected wind hybrid power gen- eration systems, wind turbine components, rotor blades, heat exchangers, electrical components, cables, safety controllers, test and measurement equipment, lubricants and much more. Wind Power China 2014 will be co-located with China Power 2014, which is dedicated to power genera- tion, transmission and distribution, Clean Energy China 2014 and Bioen- ergy China. The organizers expect about 100 Chinese and international exhibitors from more than 20 countries and about 5,000 visitors to attend the fairs. ENEX2015/Smart Hydropower & Dam Energy Japan 2015: The Expo 2015: The II International Power International Dams and Hydroelectric Industry Exhibition Plant Fair January 28–30, Tokyo, Japan January 22–24, Ankara, Turkey Held for the 38th time, ENEX and Smart Energy Japan is a great place This international trade fair will attract leading experts in renew- for learning about new energy technology solutions. It will feature able energy sources who will have an opportunity to learn about machines and devices used in the power industry and electrical industry innovations and construction technologies and materials, engineering for electricity generation, transmission and distribution, meet manufacturers of equipment, components and spare parts as well as IT and telecom systems and methods for modernizing and establish new business ties with investors and contractors. The the existing energy systems. Concurrent events will include a series key sections of Hydropower & Dam Expo will be devoted to mate- of exhibitions covering recent advances in various industries and rials and equipment for embankment dam construction, materials designed to assist in selling and promoting new products and tech- for hydro power tunnels, equipment for sluice gates, spillways and nologies: SURTECH 2015, neo functional material 2015, Convertech hydro power plants, as well as auxiliary electrical power systems JAPAN 2015, ASTEC2015, Smart Energy Japan 2015, and others. and diesel engines and generators. Together, the events are expected to attract a total of 50,000 people in 2015.

36 Energy Without Borders Power On – Get Connected 27 Bolshaya Pirogovskaya St., Building 2, Moscow, 119435, Russian Federation Tel.: +7 (495) 664-88-40 | Fax: +7 (495) 664-88-41 www.interrao.ru, [email protected]