Board of directors’ progress report
2.2.5

Investments

The investment program of the Company for 2016 was approved by the Ministry of Energy(24).

Value and physical investing parameters of the reported period are presented in the figure below:

Capex New fixed assets Funding Commissioned
RUB million, net of VAT RUB million, net of VAT RUB million, plus VAT MVA km
Permenergo 2 073 2 130 2 480 163 674
Sverdlovenergo 1 994 1 945 2 489 107 651
Chelyabenergo 1 362 1 350 1 493 64 491

Progress in funding of the Company’s investment program for 2013-2016 (RUB million plus VAT):

8,000 6,000 4,000 2,000 0 10,000 12,000 Sverdlovenergo Permenergo Chelyabenergo HQ IDGC of Urals 2013 2015 2014 2016
Total funding in 2016 declined 8% YoY.
mirroring YoY reduction of the investment program slated for 2016.

The program was prepared and adopted on the back of:

  • changes in tariff decisions;
  • updates in connection liabilities comprising new customers, changes and waivers of connection contracts concluded earlier;
  • adoption of construction and reconstruction design estimates to be used under the investment program;
  • real execution of the Company’s investment program in 2015;
  • retention of capex on facilities providing reliable electricity supply of consumers.
In 2016 the capital expenditures totaled RUB 5,429 million, net of VAT, funding reaching RUB 6,462 million plus VAT. Commissioning totaled RUB 5,424 million, net of VAT (in monetary terms), and 334 MVA and 1,816 km (in physical terms).

2016 funding breakdown is as follows:

Refurbishment and upgrade ...
3 337
million
RUB plus VAT
Greenfield construction and extension of existing facilities ...
3 069
million
RUB plus VAT
Other elements of the program (acquisition, R&D, etc.) ...
55
million
RUB plus VAT

In 2016 we concentrated on the following facilities:

Chelyabenergo branch:

Reconstruction of 110 kV power line “Shagol – Sosnovskaya – Isakovo” (1-2 circuits, 4th and 5th stages, 110 kV passages, reconstruction of substation)

Located: Chelyabinsk, the Chelyabinsk region.
Goals and objectives:
  • improvement of electricity transmission to consumers residing in Chelyabinsk and nearby region;
  • enhanced reliable operability of substation equipment;
  • reduction of possible incidents;
  • expansion of 110 kV power line transit “Shagol – Sosnovskaya – Isakovo”.
The project comprises reconstruction of existing transit power line “Shagol – Sosnovskaya – Isakovo”, replacement of AS-185 wire for AS-240 wire) and reconstruction of “Novogradskaya”, “Shershnevskaya”, “Sportivnaya” and “Sosnovskaya” substations.
Project duration: 2008 -2017.
2016 capex: RUB 1.2 million net of VAT, funding: RUB 3.6 million plus VAT.
  • In 2016 we examined design documents;
  • tested timber binding of intermediate Type PP 220 supports (No.95A(57A)-96A(58A) for mechanical resistance;
  • estimated fair market value;
  • purchased materials from contractors.
Commissioning slated for 2017.

Reconstruction of 35/6 kV “AMZ” substation (upgrading to 110 kV)

Located: Chelyabinsk, the Chelyabinsk region
Goals and objectives: enhanced reliable electricity transmission to social facilities and public amenities in Chelyabinsk.
The project comprises reconstruction of 35/6 kV “AMZ” substation, replacement of 35/6 10 MVA power transformers for 110/6/6 kV transformers (output 2х25 MVA), construction of a new 110 kV open switchgear, construction of a 6 kV indoor switchgear to connect facilities named in filed requests and rearrangement of load from existing 6 kV indoor switchgear to designed power transformers.
Project duration: 2015 – 2017.
2016 capex: RUB 93.6 million net of VAT,
2016 funding: RUB 105.7 million plus VAT.
In 2016 we completed the following 1st stage activities:
  • temporary power supply (installation of 110/6 kV “Oksana” mobile substation and its checkout);
  • construction of a construction control building combined with indoor switchgear;
  • 6 kV cable re-laying;
  • construction of a 110 kV open switchgear (installation of line disconnectors and cable coupling sleeve).
Commissioning slated for December 2017.

Construction of 110 kV “Bakalinskaya” substation, 110 kv power line from 110 kV power line “ChTES-3-Lazurnaya” (Krasnoarmeysky district)

Located: Chelyabinsk, the Chelyabinsk region
Goals and objectives: enhanced reliable electricity transmission to connected facilities of the Chelyabinsk region and connection of Chelyabinsk Compressor Plant (OOO).
The project comprises construction of a 1-transformer 110 kV substation (6.3 MVA transformer), construction of a 110 kV power line from 110 kV power line “ChTES-3-Lazurna.
Project duration: 2015 – 2016.
2016 capex: RUB 57.08 million net of VAT, 2016 funding: RUB 65.8 million plus VAT.
Commissioning slated for December 2016.

Permenergo branch:

Reconstruction of 110/35/6 kV “Chusovaya” substation.

Located: Chusovoy, the Perm region.
Goals and objectives: improved electricity supply to residential and industrial consumers.
Project duration: 2010-2016.
2016 accomplishments
  • seven 110 kV power line segments dismantled and re-assembled;
  • 40 MVA power transformer installed;
  • ACS for 110/35/6 kV Chusovaya substation installed;
2016 capex: RUB 177.9 million net of VAT, 2016 funding: RUB 171.3 million plus VAT.
Commissioning slated for December 2016.

Sverdlovenergo branch:

Reconstruction of 35/6 kV “Verkhnyaya Sysert” substation (upgrading to 110 kV).

Located: Verkhnyaya Sysert, the Sverdlovsk region.
Goals and objectives: build-up of necessary output capacity and satisfaction of residential demand in Verkhnyaya Sysert.
Reconstruction will help connect both existing and new consumers.
Project duration: 2007 -2017.
As of the year-end we completed 2 stages of construction:
  • construction of a substation with 2*16 MVA transformers;
  • installation of 110 kV open switchgear and substation control modular building, 4 km of 110 kV power line “V.Sysert – Malakhit, V.Sysert – Gydromash”.
2016 capex: RUB 118.8 million net of VAT, 2016 funding: RUB 147.7 million plus VAT.
End of the reconstruction slated for 2016.

Reconstruction of 110 kV power lines “Sibirskaya-Yuzhnaya-1,2,3”, “Sibirskayya – Chkalovskaya”, “Sibirskaya – Aviator”, feeders to “Nadezhda” substation.

Located: Ekaterinburg, the Sverdlovsk region.
Goals and objectives: Enhanced electricity supply to consumers located in Oktyabrskyi municipal district of Yekaterinburg.
Project duration: 2012-2017.
As of the year-end:
  • design and construction documents prepared;
  • positive findings of state appraisal of D&C documentation and site investigation obtained;
  • public hearings arranged;
  • expert commission issued positive findings of ecological D&C documentation appraisal.
2016 capex: RUB 0 million net of VAT, 2016 funding: RUB 0.1 million plus VAT.
Completion slated for 2017.

Reconstruction of 110 kV power line “Pershino substation-Atymya 1 substation” and feeders to “Ous” substation

Located: the Sverdlovsk region, Ivdel and Pelym municipal districts.
Goals and objectives: enhanced reliability of supply to facilities owned by Gazprom and Russian Railways as well as residents of Pelym.
2016 capex: RUB 62.8 million net of VAT, 2016 funding: RUB 48.8 million plus VAT.

Reconstruction of 35/10 kV “Shchelkun” substation with transformer capacity upgraded to 20 MVA

Located: Shchelkun.
Goals and objectives:
  • provision of output capacity for consumers residing in Shchelkun;
  • enhanced reliability of supply to existing consumers;
  • greenfield construction as well as loss decrease;
2016 capex: RUB 57.2 million net of VAT, 2016 funding: RUB 59.0 million plus VAT.

Reconstruction of 110 kV power line “Asbest-Znamenskaya-238 km-Sukhoi Log”

Located: Asbest and Sukhoi Log municipal districts.
Goals and objectives: reconstruction of 110 kV power line due to its undercapacity.
2016 capex: RUB 46.0 million net of VAT, 2016 funding: RUB 72.5 million plus VAT.

Reconstruction of 110 kV power line “Pervouralskaya-SUMZ-3”

Located: the Sverdlovsk region, Pervouralsk and Revda municipal districts.
Goals and objectives: provision of reliable supply of industrial enterprises and social facilities and public amenities located in Pervouralsk.
The project comprises reconstruction of 110 kV power line “Pervouralskaya-SUMZ-3”:
  • section “SUMZ substation portal-Pole No.17” (replacement of wire, ground wire, 17 poles);
  • section “Pole No.36-Pole No.57” (replacement of wire, ground wire, installation of ground wire peaks).
Project duration: 2013 -2017.
2016 capex: RUB 33.9 million net of VAT, 2016 funding: RUB 35.3 million plus VAT.

Reconstruction of 110 kV power line “Verkhoturye-Karelino”

Located: Verkhoturye municipal district
Goals and objectives: reconstruction of 110 kV power line “Verkhoturye-Karelino” (replacement of wire and poles) to provide reliable electricity supply.
2016 capex: RUB 54.4 million net of VAT, 2016 funding: RUB 63.2 million plus VAT.
Reconstruction of 35/6 kV “Rudnik 2” substation
Located: Nizhnyi Tagil
Goals and objectives: reconstruction of the substation, replacement of equipment, relay protection and construction of a substation control building.
2016 accomplishments:
  • substation control building,
  • indoor switchgear,
  • relay protection and automation,
  • HF communication,
  • telematics,
  • auxiliary transformer.
2016 capex: RUB 60.3 million net of VAT, 2016 funding: RUB 75.3 million plus VAT.

Investment funding structure, RUB million plus VAT:

IDGC of Urals (OAO) 2014 2015 2016
Total 7 956 7 043 6 462
Important facilities, incl. 651 403 329
Upgrade and reconstruction 233 341 329
Greenfield construction 418 62 0
Facilities of vital importance 7 1 2
Upgrade and reconstruction 0 0 0
Greenfield construction 7 1 2
Programs, incl. 1 249 930 997
Upgrade and reconstruction 1 243 927 996
Greenfield construction 6 3 1
Connection, incl.: 5 016 4 899 3 801
Facilities with over 670 kW output 1 290 1 525 969
Facilities with 150-670 kW output 833 557 356
Facilities with 15-150 kW output 545 326 259
Facilities with 0-15 kW output 2 348 2 421 2 217
Generation 1 70 0
Distributive grids 222 283 262
Upgrade and reconstruction 198 243 134
Greenfield construction 24 40 128
Computerized management (excl. Automated system of commercial metering) 149 71 163
Metering and control devices 106 84 399
Safety software 15 29 49
Acquisition of grid assets, land plots and other facilities 15 16 50
Other programs and measures 527 328 409
For reference:
Upgrade and reconstruction 3 354 3 108 3 337
Greenfield construction 4 588 3 919 3 069
Acquisitions and R&D 15 16 55

In 2016 the key funding areas were:

59
%
technological connection of consumers privileged category - 58%
15
%
programs primary upgrade and reconstruction
6
%
other programs and measures mainly, acquisition of equipment not requiring assembly
6
%
metering and control devices
5
%
facilities of vital importance
The bulk of funding also covers upgrade and refurbishment of grid facilities.

Commissioning metrics in RUB million net of VAT:

2014 actual 2015 actual 2016 actual
Permenergo branch 2 389 1 777 2 130
Sverdlovenergo branch 2 924 2 923 1 945
Chelyabenergo branch 2 017 1 778 1 350
HQ 10 10 0
IDGC of Urals (OAO) 7 339 6 488 5 424

2013-2016 investing metrics of the Company is presented in the figure below:

Measurement unit 2013 actual 2014 actual 2015 actual 2016 actual
IDGC OF URALS (OAO)
Capex RUB million net of VAT 9 079 7 166 6 274 5 429
Funding RUB million plus VAT 10 088 7 956 7 043 6 462
Commissioning RUB million net of VAT 9 078 7 339 6 488 5 424
Capacity commissioning km 1 854 2 060 2 072 1 816
MVA 644 426 384 334
PERMENERGO
Capex RUB million net of VAT 3 436 2 239 1 785 2 073
Funding RUB million plus VAT 3 821 2 590 1 959 2 480
Commissioning RUB million net of VAT 3 484 2 389 1 777 2 130
Capacity commissioning km 598 742 615 674
MVA 168 141 147 163
SVERDLOVENERGO
Capex RUB million net of VAT 3 503 3 006 2 800 1 994
Funding RUB million plus VAT 4 000 3 199 3 191 2 489
Commissioning RUB million net of VAT 3 582 2 924 2 923 1 945
Capacity commissioning km 783 758 771 651
MVA 308 155 129 107
CHELYABENERGO
Capex RUB million net of VAT 2 130 1 911 1 679 1 362
Funding RUB million plus VAT 2 251 2 155 1 881 1 493
Commissioning RUB million net of VAT 2 000 2 017 1 778 1 350
Capacity commissioning km 473 560 687 491
MVA 167 130 107 64
HQ
Capex RUB million net of VAT 11 11 10 0
Funding RUB million plus VAT 16 13 11 0
Commissioning RUB million net of VAT 11 10 10 0
Capacity commissioning km 0 0 0 0
MVA 0 0 0 0

Our 2016 measures to cut per-unit investments are:

  • a)oversight whether the decree(25)is complied with
  • b)the investment and purchase programs are formed under the Guidelines(26)
  • c)reduction of administrative expenses on customer department.

For 2016 is:

4.32
%
Approved
standard
218.4
million
RUB
estimate approved

for 2015 is:

4.88
%
Approved
standard
248.5
million
RUB
estimate approved

Execution of connection contracts as a part of investment program is presented in the following figure:

Reported period Connection of consumers
Execution of connection contracts Incl. privileged connection (up to 15 kW)
pcs GW pcs GW
2014 15 178 0,460 14 412 0,181
2015 16 674 0,702 15 905 0,213
2016 13 138 0,699 12 432 0,163

Losses in 2016 totaled:

2016 losses, million kWh 2016 losses, %
Permenergo 1 935 10,91
Sverdlovenergo 1 783 6,07
Chelyabenergo 1 618 7,73
IDGC of Urals (OAO) 5 337 7,84
2014 investment
program (actual)
2015 investment
program (actual)
2016 investment
program (actual)
Check runs at the end of 2016 revealed 145 closed main substations (seventy eight 110 kV substations and sixty seven 35 kV substations). Total capacity utilization rate was 29% during the reported period.

Depreciation of fixed assets and changes in share of equipment with limit-exceeding service life:

Indicator 2013 2014 2015 2016
Depreciation of fixed assets 57% 60% 58% 59%
Share of equipment with limit-exceeding service life 59% 52% 51% 53%

Incident rates of the Company’s branches (incidents and disturbances in 3 kV and over networks):

Incidents/1000 c.u. 2015 2016
Permenergo 7,50 5,41
Sverdlovenergo 5,07 4,12
Chelyabenergo 9,23 6,06
IDGC of Urals 7,16 5,14
The Company’s investment program for 2016-2020, approved by Ministry of Energy Decree dated as of 22.12.2016 No.1385, stipulates RUB 33,528 million (plus VAT) funding and RUB 28,274 million (net of VAT) capital expenditures.

The Company’s 2016-2020 investment program is prepared with due allowances to regional development plans, equipment health, importance of grid facilities and current domestic environment. Solutions, adopted when the investment program was drafted, comply with goals and objectives of the Uniform Technical Policy of the Energy Grid Sector and legislation in force. The charts below show year-by-year dynamics in funding, capex and commissioning (in monetary and physical terms), compliant with the approved investment program and compared to 2016 actual numbers.

Funding

target 2017 actual 2016 target 2018 target 2019 target 2020 8,000 6,000 4,000 2,000 0 RUB million plus VAT 6,462 6,679 6,601 6,591 7,109
YoY annual funding is:
+3%
2017
on 2016 actual numbers
+2%
2018
on 2016 actual numbers
+2%
2019
on 2016 actual numbers
+10%
2020
on 2016 actual numbers

Average change in funding for the approved period is +4% on 2016 actual numbers.

Capex

RUB million plus VAT 8,000 6,000 4,000 2,000 0 target 2017 actual 2016 target 2018 target 2019 target 2020 5,429 5,626 5,468 5,596 6,044
YoY annual capex is:
+4%
2017
on 2016 actual numbers
+1%
2018
on 2016 actual numbers
+3%
2019
on 2016 actual numbers
+11%
2020
on 2016 actual numbers

Average change in capex for the approved period is +5% on 2016 actual numbers.

Commissioning

RUB million plus VAT 8,000 6,000 4,000 2,000 0 target 2017 actual 2016 target 2018 target 2019 target 2020 5,424 6,046 5,628 5,759 6,132
YoY commissioning is:
+11%
2017
on 2016 actual numbers
+4%
2018
on 2016 actual numbers
+6%
2019
on 2016 actual numbers
+13%
2020
on 2016 actual numbers

Average change in commissioning for the approved period is +9% on 2016 actual numbers.

km

2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 target 2017 actual 2016 target 2018 target 2019 target 2020 1,816 1,029 1,100 1,024 1,178

МВА

400 300 200 100 0 target 2017 actual 2016 target 2018 target 2019 target 2020 334 291 371 266 288

Changes in launched capacity during the approved target period are linked to distribution of commissioning among large-scale facilities.

ЦЕНТР ЗАГРУЗКИ
Здесь вы можете скачать полный отчет 2016, отдельные главы в формате PDF и наиболее важные таблицы в формате Excel.
1About company
1.1Mission and strategic goals
1.2Market share
1.3Key 2016 events
2Board of directors’ progress report
2.1Letter to stockholders
2.2Production capital formation
2.2.1Network exploitation
2.2.2Electricity transmission
2.2.3Technological connection
2.2.4Development of telecommunications and IT systems
2.2.5Investments
2.2.6Innovations
2.2.7Efficacy enhancement
2.3Financial capital formation
2.3.1Analysis of revenues and expenses
2.3.2Analysis of financial standing
2.3.3Analysis of receivables and payables
2.3.4Analysis of credit portfolio
2.3.5Description of tariff policy
3Corporate governance
3.1Corporate governance practices
3.2Corporate governance system
3.2.1General meeting of stockholders
3.2.2Board of Directors
3.2.3Board of directors’ committees
3.2.4General director and executive board
3.2.5Remuneration and compensation policy
3.3Oversight system
3.3.1Board of internal auditors
3.3.2Independent auditor
3.3.3Internal control
3.3.4Risk management
3.3.5Security and anti-corruption
3.4Investor and stockholder relations
3.4.1Shareholder capital structure
3.4.2 Shareholder rights
3.4.3The company and stock market
3.4.4Communications with market participants
3.4.5FAQ
3.4.6Allocation of profit
4Stakeholder
4.1Human resources management
4.2Customer support
4.3Supplier relationship management
4.4Public and goverment relations
4.5Environment protection
5Appendices
5.1Prepared under Russian accounting standards
5.2Prepared under international financial reporting standards
5.3Related-party transaction report
5.4Corporate governance code compliance report
5.5References
5.6Abbreviations and acronyms