2014 Annual report

Energy Saving and Energy Efficiency

To ensure the implementation of the Energy Saving and Increase of Energy Efficiency Program of JSC IDGC of the North-West in 2014-2019 (hereinafter, the Program), the Company’s Order No. 527 on Organization of Work on the Energy Saving and Increase of Energy Efficiency of JSC IDGC of the North-West dated October 08, 2013 and Order No. 707 on Division of Functional Responsibilities, Authority and Accountability of Senior Managers of IDGC of the North-West" dated December 31, 2014 appointed senior managers responsible for the control over the Program implementation.

In the area of energy saving and energy efficiency, the adopted Program targets include:

Targets and actual values of indicators for 2014
Indicator Unit of measurement Target Actual
Energy losses, including million kW⋅h 2,513.19 2,547.09
% to FA 6.42 6.41
Consumption for substations’ own needs million kW⋅h 90.85 82.48
consumption of energy resources for economic needs, incl. by resource type RUB million 340.02 317.91
fuel and energy, including: thousand TOE 40.52 39.73
RUB million 334.03 313.29
TOE per m2 of floor space 0.07 0.07
electricity million kW⋅h 89.58 88.92
RUB million 245.71 232.45
heat Gcal 59,742.75 56,793.91
RUB million 85.28 78.22
gas thousand m3 674.82 570.57
RUB million 3.04 2.62
motor fuel thousand TOE 14.53 15.42
RUB million 366.19 374.88
hot water supply thousand m3 16.98 13.48
Gcal 631.16 479.07
RUB million 1.03 0.80
cold water supply thousand m3 206.72 152.50
RUB million 4.96 3.81
Provision of modern electricity metering devices for the retail market in accordance with the PRSUE Program % 27.96 27.10

The Program consists of sections, target subprograms (activities) and related measures, consisting, in turn, on measures to reduce electricity losses during transmission and distribution through power grids and measures to reduce energy consumption at the production and economic facilities, which could be divided into organizational and technical measures.

Target activities include measures the implementation of which ensures the reduction of energy consumption (including electricity) and (or) water by at least 15% of annual consumption of the corresponding resource, with a payback of 80% of the investment over 5 years in respect of consumption of energy resources and (or) water used for production and economic needs, and over 10 years in respect of activities ensuring the reduction of losses in the transmission and distribution of electricity.

Accompanying cost optimization measures for the production and economic needs as well as for the reduction of electricity losses include activities with positive energy efficiency that do not meet the criteria of target activities.

At the same time, disabling transformers with seasonal load and transformers working in the small load modes at the substations with two or more transformers, phase load leveling in the 0.38 kV distribution grids, optimization of operating voltages in the medium-voltage grid are performed annually; these activities “maintain” the level of electricity losses and do not affect the electricity balance of the Company.

In 2014, the planned outcome under the Program amounted to 90.07 million kW⋅h and RUB 311.44 million.

At the end of 2014, the overall effect was 72.08 million kW⋅h and RUB 245.63 million.

Overall effect of implementating the program of energy saving and energy efficiency
Programs Effect of the program
target actual
million kW⋅h RUB mln million kW⋅h RUB mln
Target Programs 73.36 256.25 49.42 169.27
Non-Target Programs, including: 16.70 55.18 22.66 76.37
Accounting System Development Program 13.46 48.67 18.99 69.33
Retrofitting and Reconstruction Program 2.95 5.92 3.29 6.28
Repair Program 0.30 0.58 0.38 0.73

The cost of Program implementation totaled RUB 966.15 million. The financing sources under the energy saving program were: investment program — RUB 940.49 million, repair program — RUB 25.67 million.

To analyze the dependence of the effect and the costs incurred we should consider the following. The effect of the activities can be divided into three groups:

Group 1 — organizational activities to be implemented on a continuous basis. Implementation of most of these activities does not require additional expenses and depends on the staff structure of the power grid organization and on the Company’s Human Resources. Provide the most significant effect of loss reduction.

Group 2 makes it possible to significantly reduce losses, especially due to non-normalized working conditions of electricity metering complexes. However, their implementation requires significant investments.

Group 3 activities mainly focus on the development of power grids, increase of their reliability and improvement of electricity quality.

Group 2 and Group 3 activities constitute non-target Programs within the Energy Saving Program and they are the most expensive. Reduction of energy losses (which is lower compared to Group 1) represents here an accompanying effect in solving strategic tasks.

Based on the results of 2014, the effect of implementation of the Company’s target activities to reduce electricity losses was 49.42 million kW⋅h totaling RUB 169.27 million (including activities to maintain the current level of losses). For more information on the implemented target loss reduction activities, see “Reduction of Electricity Losses” section.

The main target activities that reduce the consumption of resources for domestic needs are: implementation of heating, water, natural gas consumption schedules, and installation of energy-efficient lamps.

Based on the results of 2014, the effect of the implementation of target measures to reduce the consumption of resources for domestic needs across the Company was 0.088k TOE in the amount of RUB 0.48 million, with the target of 0.107k TOE in the amount of RUB 0.72 million.

Technological and economic effect of implementing of Program of energy saving and increase in energy efficiency
Measures Unit of measurement 2011 2012 2013 2014
real quantity RUB mln real Quantity RUB mln real quantity RUB mln real quantity RUB mln
Program total million kW⋅h 69.41 130.35 61.04 126.99 106.97 290.52 72.08 245.63
Target Programs/ measures (funded under the Program) million kW⋅h 58.36 111.15 44.14 94.68 47.15 139.36 49.42 169.26
Energy loss reduction measures million kW⋅h 58.36 108.42 44.14 89.45 47.15 136.53 49.42 168.78
Organizational measures million kW⋅h 55.86 104.84 43.94 89.19 46.76 135.92 49.17 168.35
Technical measures million kW⋅h 2.49 3.58 0.20 0.26 0.39 0.61 0.26 0.42
Targeted measures to reduce energy consumption at the production and business facilities TOE 453.4 2.73 642.58 5.22 401.68 2.83 88.56 0.48
Non-target Programs/measures (activities that directly or indirectly affect targets and goals funded under the other Programs) million kW⋅h 11.05 19.20 16.89 32.32 59.82 151.16 22.66 76.37
Accounting system development Program million kW⋅h 5.89 12.56 11.33 26.05 50.71 133.99 18.99 69.33
Within the framework of technical re-equipment and reconstruction: million kW⋅h 5.16 6.64 5.00 5.39 7.97 14.64 3.29 6.28
Repair Program activities million kW⋅h 0.56 0.85 0.58 1.15 0.38 0.73
Program of future development of the distribution grid million kW⋅h 0.001 0.002 0.56 1.18
Non-target household needs TOE 3.77 0.03 1.64 0.20 2.55 0.02

Comparative analysis of implementation indicators of the Energy Saving and Energy Efficiency Improvement Program for the period 2011-2014 shows that the main effect on the loss reduction is produced by activities aimed to identify non-metered consumption of electrical energy in industrial and domestic sectors. The effect of maintaining the level of electricity losses during transmission is mainly produced through the identification of non-contractual consumption.

In 2014, improvement of the overall results within the Program was due to the activities under the Program for perspective development of electricity metering systems, which cost amounted to RUB 235.31 million (excluding VAT) in 2013[32].

As a result of the implementation of measures to reduce consumption of energy resources by industrial and household facilities, a more significant effect was achieved in 2012. Main performed activities: implementation of heat, water, natural gas consumption schedules; installation of energy efficient lighting fixtures, replacement of windows with plastic and wooden multiple glazed units; heat insulation of flat roofs, replacement of heating stoves with heat convector.

Implementation of targets of the energy saving program:

The greatest reduction of losses compared to the targets was achieved by Arkhenergo (-0.12%), Vologdaenergo (-0.11%), Karelenergo (-0.14%).

The target of electricity losses was not met by Novgorodenergo branch. The actual amount of electricity losses amounted to 343 million kW⋅h, or 9.44%, which is above the target by 0.63%. The cause of failure is that the work the branch to reduce electricity losses was not efficient enough, including due to inefficient identification of off-the-meter consumption.

In 2014, the Company took measures to reduce electricity losses with the general effect of 60.1 million kW⋅h, including:Not including measures, maintaining the current level of losses (12 million kW⋅h).

The plan to provide the retail market with modern electricity metering devices in accordance with the long-range development Program for electricity metering systems (LRDPEMS) performed by 97 % due to lower amount of financing.

Implementation of the energy saving program in respect of target and non-target measures:

Reduction of losses through the implementation of target activities under the energy saving Program amounted to 49.42 million kW⋅h or 67% of the plan. Planned activities to identify non-metered and non-contractual consumption were not implemented. The causes of failure are listed above.

Reduction of losses by performing non-target activities amounted to 7,811.96 TOE or RUB 76.37 million; implementation of the plan amounted to 136 % in physical terms and 138% in monetary terms. Achievement of values above the planned ones occurred under the long-range development Program for electricity metering systems (Vologdaenergo branch, the result of changing the metering systems during the grid reconstruction in 2013), the program of technical re-equipment and reconstruction (Kolenergo branch, part of the investment Program for the replacement of transformers completed ahead of time).