Chapter 3
3.2. Electricity and capacity market overview
3.2.1. General installed capacity and electricity production in Russian and in the world
Power plant installed capacity in 2015, GW
* in 2012
Source: Russian Ministry of Energy, EIA, CIA (The World Factbook), Ministry of statistics and programme implementation government of India (Energy statistics 2015), Fraunhofer ISE, Presentation «China’s Rolein Global Emissions», NEB (Canada)
Production, million kW·h
Source: BP Statistical Review of World Energy 2015, Russian Ministry of Energy
The installed capacity of UES of Russia as of December 31, 2015 totalled 235 305.56 MW, that is 1.2 % more than in 2014 (232 451.81 MW.). The growth in the installed capacity of power plants was 5 027 MW (7 694.83 MW in 2014), including:
- commissioning of new capacity in power plants of the UES of Russia counting the power plants of industrial enterprises totalled 4 710.0 МW (7 296.31 МW in 2014);
- an increase in the installed capacity of the existing generating fleet due to its modernisation – by 317.0 МW (398.53 МW in 2014), generating facilities of power plants of the UES of Russia with total capacity of 2 357.25 МW (1 762.6 MW in 2014).
Installed capacity of power plants UES of Russia, MW
Source: SO UES
The installed capacity structure of UES of Russia power plants, %
The structure of power generation by types of UES of Russia power plants, %
In 2015 energy consumption in UES of Russia decreased by 0.6 % and totaled 1,008.25 billion kW·h (1,013.86 billion kW·h in 2014).
Energy consumption dynamics, 1991-2015
Energy production in UES of Russia increased by 0.2 % up to 1,026.88 billion kW∙h (1,024.9 billion kW∙h in 2014).
3.2.2. Competitive advantages
RusHydro Group’s key competitive advantages
| Environmental friendliness | The Group’s main segment is hydropower generation, RusHydro also actively in develops other renewable energy sources, contributing to decrease in carbon dioxide emissions and the preservation of fossil fuel resources. |
| Flexibility | The hydropower industry is the only power industry sector capable of increasing or decreasing the volume of power generation promptly when required to compensate for peak load or excess capacity. |
| Self-sufficiency | The generation of energy using water resources is independent from the use of hydrocarbons, therefore, the Group’s performance is characterized by the high level of predictability of production costs. |
| Social significance | The hydropower industry is socially significant, as HPP water bodies are used to supply water for industrial and household needs, thus encouraging the development of agricultural and transport facilities. In addition, the HPPs serve as major employment providers in the regions. |
RusHydro Group controls numerous Russian hydropower facilities, and is active in the popularisation of renewable energy sources. Group is fully aware of the significance of the tasks it deals with, striving to continuously develop its performance and participating in Russia’s environmental and technological advances, while recognizing the Group’s high social responsibility. The Group currently controls 400 electric power facilities, including 71 hydropower plants, the Kislogubskaya power plant, the only tidal power generation facility in Russia, 3 geothermal power plants generating more than 90% of the country’s geothermal energy, thermal power plants and retail companies.
The fleet of assets makes RusHydro Group a unique power generating company globally, and the third largest company among the world’s hydropower companies (in terms of installed capacity).
Installed capacity of the world’s major peer group companies, GW
Sources: PJSC RusHydro and competitor data
The world’s major hydropower generating companies are controlled by the governments of their respective countries due to the strategic importance of the hydropower industry. Compared with global peers, RusHydro Group activities are characterized by very complex climatic and landscape conditions and widespread operational geography.
The Group’s facilities are located all over the country, ranging from Murmansk Region to the Primorie Region and from Chukotka to the Republic of Dagestan. Furthermore, the Group is engaged in international operations, managing the Sevan-Hrazdan Cascade of HPPs in Armenia. The continuous, reliable and safe operation ofinfrastructural facilities vital for the country, with facilities separated by tens of thousands kilometers, poses a Herculean task for Group employees, who have successfully dealt with these challenges, striving to implement the Group’s Mission and Strategic Goals.
Having implemented a large-scale investment programme, the Group has increased the installed capacity of its generating facilities more than 1.5 times.
3.2.2.1. RusHydro Group’s major Russian competitors in the electric energy generation sphere
Russian generating facilities are mostly concentrated in the several large holding companies.
RusHydro’s major competitors
| N | Holding companies | Holding Company’s Generating Companies |
|---|---|---|
| 1 | Rosatom | Rosenergoatom Corporation PPGHO SHK CJSC "VetroOGK" |
| 2 | Inter RAO | INTER RAO Electricity Generation (incorporates the assets owned by OGK – 1 and OGK – 3) |
| 3 | EuroSibEnergo | Irkutskenergo Krasnoyarskaya HPP LLC "Avtozavodskaya CHP" JSC EnSer LLC "Novokondrovskaya CHP" |
| 4 | Gazprom Energy Holding | TGK – 1 JSC Mosenergo OGK 2 (incorporates the assets owned by former OGK – 2 and OGK – 6 MOEK |
| 5 | KES-Holding | TGK – 5 TGK – 6 TGK – 7 (Volzhskaya TGK) TGK – 9 |
| 6 | E.ON | OGK–4 |
| 7 | Enel | OGK–5 |
| 8 | SGK (SUEK) | Kuzbassenergo (TGK – 12) Eniseiskaya TGK (TGK – 13) JSC "Krasnoyarsk CHP– 1" JSC "Kansk CHP" JSC "Nazarovo GRES" JSC "Kemerovo Generation" JSC "Barnaul CHP-3" JSC "Barnaul Generation" JSC "Kuznetsk CHP" JSC "Novo-Kemerovo CHP" |
| 9 | LUKOIL | LLC"LUKOIL-Kubanenergo" LLC"LUKOIL-Rostovenergo" LLC "LUKOIL-Astrakhanenergo" LLC"LUKOIL-Volgogradenergo" LUKOIL – Ekoenergo LLC "LUKOIL-Stavropolenergo" |
| 10 | RU-COM | SIBEKO (Novosibirskenergo) JSC "Biyskenergo" |
| 11 | Sintez Group | TGK – 2 |
| 12 | Unexim | Quadra (TGK – 4) LLC "Shekinskaya TPP" Kursk CHP-4 |
| 13 | Fortum | Fortum (TGK – 10) |
| 14 | RZHD | TGK – 14 |
| 15 | TAIF | TGK – 16 |
The RusHydro Group’s main competitors on the power generation market include independent Russian utility companies formed as a result of RAO UES of Russia reform. The Group considers the use of renewable energy sources as one of its priorities and stably increases installed capacity by building new power plants and commissioning new power generation facilities.
The Group’s domestic market share in terms of installed capacity and power generation*, %
3.2.2.2. Competitors at the Armenian electric energy generation market
In 2011 PJSC RusHydro acquired 90% of the Sevan-Hrazdan Cascade of HPPs shares with total capacity of 562 MW in Armenia. Thus the Group took the significant share of Armenian electric energy generation market.
Installed capacity of the Armenian market players, MW
3.2.3. Prospects of the Group development
In accordance with the Scheme and the Programme of the Russian Unified Energy System Development in the period of 2015 – 2021, approved by the Order of the Ministry of Energy from 09.09.2015 No 627, based on the analysis of the investment programme and the business – plan of PJSC RusHydro, as well as on the results of the data analysis about the other subjects of the Russian electric energy generation industry investment plans, it is expected that:
- 1. The share of “RusHydro” generating facilities’ electricity production will grow steadily from 12.13 % in 2015 to around 13 % in 2019 in the total consumption of the Russian Federation for the period until 2019;
- 2. The installed capacity of “RusHydro” power plants as a share of the Russian power plants’ installed capacity will grow from 15.89 % in 2015 to 16.9 % in 2019.