2.6

Energy transmission and enhancement of energy efficiency

2015 operating performance is presented in the table below:

Total supply, mn kWh Net supply*, mn kWh Losses
Mn kWh %
Permenergo 18,137 16,151 1,986 10.95%
Sverdlovenergo 30,875 29,059 1,816 5.88%
Chelyabenergo 20,588 18,982 1,607 7.80%
IDGC of Urals 69,600 64,192 5,409 7.77%

* Energy supply to consumers and neighboring regional grid operators at the boundaries

In 2015 net supply of the Company to consumers and neighboring regional grid operators at their boundaries totaled 64,192 mn kWh, -3,025 mn kWh or -4.5% YoY (67,217 mn kWh in 2014 respectively). Key factors of decline are: i) large industrial enterprises, such as Lukoil-PNOS (OOO) and SIBUR (PAO), have commissioned own generating facilities (Permenergo); ii) SUMZ (OAO) has commissioned own generating facilities and NTMK (OAO) and Russian Railways (OAO) have reduced their consumption (Sverdlovenergo); and iii) large industrial enterprises, such as MMK (PAO), ChMK (OAO) and ChTZ Uraltrak (OOO), have reduced their consumption (Chelyabenergo).

Actual losses of electric energy in 2014-2015 are presented in the table below:

Energy losses
2014 actual 2015 actual Change*
млн кВтч % млн кВтч % %** млн кВтч %
Permenergo 2,095 11.05 1,986 10.95 10.79 -109 -0.10%
Sverdlovenergo 1,835 5.75 1,816 5.88 5.87 -19 0.13%
Chelyabenergo 1,661 7.56 1,607 7.80 7.50 -54 0.24%
TOTAL 5,591 7.68 5,409 7.77 7.64 -182 0.09%

* 2015/2014.
** 2015/2014 compar.

Actual losses of electric energy in Company’s networks totaled 5,409 mn kWh (7.77% of total supply). Compared to 2014, 4.31% reduction of supply resulted in 182 mn kWh or 3.27% loss decline. Actual energy losses in Company’s networks totaled 7.77% mirroring the target (7.77%). The voltage breakdown structure of energy losses in 2015 is presented in the table below (mn kWh/ %):

Branch TOTAL HV MV1 MV2 LV
Permenergo 1,986 938 214 471 363
Sverdlovenergo 1,816 1,229 81 266 240
Chelyabenergo 1,607 817 101 359 330
IDGC of Urals (OAO) 5,409 2,985 396 1,095 933
Permenergo 10.95% 5.83% 5.85% 4.67% 10.32%
Sverdlovenergo 5.88% 3.78% 4.18% 2.90% 10.51%
Chelyabenergo 7.80% 3.90% 2.44% 4.32% 9.24%
IDGC of Urals (OAO) 7.77% 4.29% 4.07% 3.97% 9.95%

Reduction of technological energy losses

The Company implements a series of activities to optimize (reduce) energy losses as one of its priorities. These loss-reducing activities in 2015 resulted in 144.1 mn kWh or RUB 348.1 mn economy, administrative activities contributing 77.109 mn kWh or RUB 189.9 mn economy, technical activities saving 1.12 mn kWh or RUB 2.01 mn and enhanced metering economizing 65.87 mn kWh or RUB 156.2 mn. 2015 upgrade target comprised 25.166 thous metering devices and RUB 345.9 mn expenses, while 2015 actual upgrade totaled 18.541 thous. metering devices and RUB 263.03 mn expenses. We also collected data in a remote manner from 11.828 thous. metering devices (target – 20.056 thous.). Loss-reducing targets are outperformed 117% (in physical terms).

Progression of the Energy-saving and Enhanced Efficiency Program in 2015.

Target indicators for energy-saving and enhanced efficiency, in line with the program, are energy losses occurring during network transmission and consumption of power resources for economic needs. Target values of the program are approved for 2015-2019 and presented in the table below:

M.u. 2015
Target Actual
Energy losses, incl.: Mn kWh 5 547,48 5 408,51
% of supply 7,82% 7,77%
In-house load of substations Mn kWh 104,39 79,94
Economic needs, fuel type breakdown: RUB mn 304,59 273,07
Fuel and energy, incl.: Thous. tfoe 19,98 17,81
RUB mn 297,85 268,04
Tfoe/1 m² 0,04 0,04
Electricity Mn kWh 85,78 79,89
RUB mn 227,53 201,73
Thermal power GCal 65 828,82 56 255,62
RUB mn 69,10 65,56
Gas Thous. m³³ 239,95 156,53
RUB mn 1,22 0,74
Other (diesel, kerosene, gasoline, etc.) Thous. tfoe 0,00 0,00
RUB mn 0,00 0,00
Hot water Thous. m³ 29,96 13,76
GCal 451,83 490,10
RUB mn 0,89 0,86
Cold water Thous. m³ 189,92 153,14
RUB mn 12,97 10,58
Other indicators Thous. tfoe 15,80 15,49
RUB mn 383,25 364,41
POL Thous. tfoe 15,80 15,49
RUB mn 383,25 364,41

The program consists of target and supporting subprograms, incl. loss-reducing activities during network transmission and activities to reduce consumption of power resources for economic needs. All activities of the program, in their turn, are divided into administrative and technical. Target activities are activities, implemented to reduce consumption of power resources and water at least 15% of annual consumption, with return on 80% of investments within 5 years (for consumption of power resources and/or water as in-house load or for economic needs) and 10 years (for loss-reducing activities during network transmission). Supporting activities dealing with optimization of in-house load and economic needs and reduction of energy losses are activities with positive energy efficiency, non-compliant with target-activities criteria.

Target effect * for 2015: 92.72 mn kWh 39.55 GCal 48.0 thous. liters of POL RUB 168.35 mn
Target activities 45.87 mn kWh - 48.0 thous. liters RUB 83.36 mn
Supporting activities 46.85 mn kWh 39.55 GCal - RUB 84.98 mn
Actual effect *: 120.2 mn kWh 39.55 GCal 52.63 thous. liters of POL RUB 204.69 mn
Target activities 53.19 mn kWh - 52.63 thous. liters RUB 89.59 mn
Supporting activities 67.01 mn kWh 39.55 GCal - RUB 115.1 mn

* Excl. activities to support existing loss level

Expenses on target activities totaled RUB 8.39 mn, funded by the investment program (RUB 1.09 mn) and prime cost (RUB 7.29 mn). Technological effect from target loss-reducing activities totaled 52.3 mn kWh and RUB 86.53 mn

Key target activities to reduce consumption of resources for economic needs are improvement of lighting on Chelyabenergo premises and refurbishment of the heating system at Chebarkul distribution unit premises. Effect from target activities to reduce consumption resources for economic needs in 2015 totaled 0.04 mn kWh or RUB 0.1 mn (target - 0). We also installed automated heating regulation system in 4Q 2015 to reduce consumption of resources for economic needs, effect to be perceived in 2016. Due to capped funding we have not refurbished the heating system at Kizel distribution unit premises.