Investment Activities

Commentary-interview of the Deputy Director General for Capital Construction Projects O. V. Ivanov

What are the main achievements and results delivered by the Department under your supervision?

In 2015, the Investment Program was completed in the full scope; the Company operated in accordance with the approved schedules.

Speaking about power facilities commissioned in 2015, I would like to make a special mention of revamp of 220/110 kV station “Tsentralnaya”; 110/10 kV station “Avtozavodskaya”; 110/10 kV station “Lomonosovo” and some other projects.

In addition to feed centers, the Company also commissioned several HV cable lines: 220 kV circuit “Matveevskaya — Presnya” (4.9 km); 110 kV circuit “Butyrki — Smarskaya” (5.76 km); 110 kV circuit “f.GES-1 — TETs-12” (7.17 km); 110 kV circuit “Fili — Presnya” (1.21 km); 110 kV circuit “Kosino- Vykhino” (2.85 km). The second circuit of 220 kV cable line “Avtozavodskaya — Yuzhnaya” (5.67 km) was constructed. The 110 kV overhead transmission line “Radischeva-Klin Z and V” (22 km) was revamped.

In the framework of preparation for the World Cup 2018, PJSC MOESK completed activities in accordance with the approved schedules on the following facilities:

  • development of “Luzhniki” sports field territory and arrangement of power supply for the Great Sports Arena of “Luzhniki”;
  • CSKA football field;
  • Power supply for the facilities included into the special city development program, including revamp of Moscow Cathedral Mosque, arrangement of power supply for subway stations “Salarievo”, “Rumyantsevo”, and “Tekhnopark”.

  • I would also like to mention that PJSC MOESK fulfilled its key task: preparation of the office building located at 7-9 Vavilova St., Moscow for relocation.

    What are the Company plans and forecasts for 2016?

    In 2016, the focus will be made on significant facilities, which are required to ensure reliable power supply in the Moscow area and to the activities associated with connection of consumers.

    The amount of capital investments in the framework of Investment Program 2016 will be around 29.6 bln rubles. The Company will commission 1.1 thous. MVA of transformation capacities and over 3.8 thous. km of transmission power lines.

    Priority projects for 2016: construction of 220/100/20/10 kV station “Khovanskaya” for electric power supply to New Moscow facilities; construction of the first circuit of 220 kV cable line “City-2 — Belorusskaya”; 35 kV station “Molchanovo”; 110/20 kV station “Medvedevskaya”; revamp of the first circuit in 110 kV cable line “City — Mayakovskaya”, etc.

    Additionally, the Company plans to actively participate in improvement of legal aspects: introduction of amendments and supplements into the Land Code, Urban Development Code, Forestry Code of the Russian Federation in terms of reduction of timeframe and simplification of procedures for execution of legal documents on the land lots owned by the government or municipal authorities and approval of design documentation for construction/revamp of power facilities’ infrastructure in Moscow.

Parameters of Investment Activities

The Investment Program 2015 was approved by Order of Russian Ministry of Energy No. 952 dated December 14, 2015.

In total, the Investment Program 2015 covers 35 thous. facilities. Information on the priority facilities in the framework of the investment program which were included into the fixed assets in 2015 is presented in the Annex to the Annual Report.

Implementation of capital investment, RUB mln without VAT

Commissioning of fixed assets, RUB mln without VAT

Financing, RUB mln with VAT
 

Construction in progress, RUB mln without VAT

Commissioning of capacities / lines, MVA

Commissioning of capacities / lines, km

In 2015, the Investment Program became subject to sequestering as follows:

1. The amount of planned capital investments was reduced by 19% to 35,002 mln rubles. The actual scope of plan fulfillment was 105%. Capital investments relative to 2014 were cut by 19% to 36,715 mln rubles.

Similar to previous years, in 2015 over 50% of capital investments were made in Moscow due to the geopolitical location of the capital area; a slight decline in the volumes of capital investments was observed in the region in absolute terms.

2. The planned volume of fixed assets commissioning was reduced by 27% to 32,980 mln rubles. The actual scope of plan fulfillment was 104%. Relative to the year 2014, the volume of fixed assets commissioning decreased by 24% to 34,458 mln rubles.

3. The planned amount of financing decreased by 21% to 39,683 mln rubles. The actual scope of plan fulfillment was 91%. Relative to the year 2014, the volume of financing decreased by 24% to 36,295 mln rubles. The financing was performed within the limits of available funds. The activities were performed; accounts payable were formed as of January 1, 2016.

4. The planned volume of transformation capacity commissioning decreased by 56% to 1,543 MVA. The actual scope of plan fulfillment was 103%. Relative to the year 2014, the volume of commissioned transformation capacity decreased by 54% to 1,593 MVA.

5. The planned volume of transmission line commissioning decreased by 34% to 5,307 km. The actual scope of plan fulfillment was 117%. Relative to the year 2014, the volume of commissioned transmission lines decreased by 28% to 6,206 km. The decrease in the commissioned production capacities was observed due to reduction of capital investments into the fixed assets.

Areas and Structure of Capital Investments

The priority area of financing through capital investments for the Company in 2015 was new construction (59% of the total financing scope) aimed at liquidation of existing deficit in terms of electric capacities and connection of new consumers.

Technology upgrade and revamp projects take 34% of the total financing scope, which is associated with the policy of tariff growth limitation for natural monopolies and prospective development schemes for the territories.

Dynamics of Financing with Breakdown to Areas of Investment Activities, RUB mln

Areas of Financing through Capital Investments in 2015, %
 

In general, the scope of financing in 2015 was reduced by 24% compared with 2014. The decrease of financing was associated with targeted sequestering of Investment Program. Financing was cut for all sections of the Investment Program, except the following areas where the scope of financing actually increased compared with 2014:

  • ECs with power rating over 150 kW (11% increase) — due to the increased number of applications from new consumers, including representatives of small and medium businesses.
  • Other programs and activities (increase over 100%): distribution of interest on borrowed funds for inclusion into the cost of investment assets —2,308 mln rubles;
  • Others (buildings; equipment not included into the construction cost estimates) (18.8% growth) — procurement of equipment and vehicles for mobile work teams in 2015; emergency stock.

Structure of Capital Investments, RUB bln with VAT

Area of Investment Activities 2013 2014 2015 2015/ 2014
Total 42,694 47,795 36,295 -24.1%
Priority projects 9,101 10,958 4,479 -59.1%
R&R 7,436 6,239 3,053 -51.1%
New construction 1,664 4,719 1,426 -69.8%
Programs of special importance 0 0 0 0.0%
R&R for HV (TL, SS) 0 0 0 0.0%
New construction for HV (TL, SS) 0 0 0 0.0%
Programs, including: 33,593 36,837 31,816 -13.6%
HV facilities rated for 35-330 kV 9,203 9,504 4,509 -52.6%
R&R for HV (TL, SS) 9,108 9,489 4,498 -52.6%
New construction for HV (TL, SS) 95 15 11 -28.9%
Technological connection facilities (total), including: 12,254 18,644 18,075 -3.0%
Technological connection facilities rated above 670 kW 5,548 8,622 9,696 12.5%
Technological connection facilities rated from 150 to 670 kW 1,179 1,592 1,649 3.6%
Technological connection facilities rated from 15 to 150 kW 383 1,716 1,084 -36.8%
Technological connection facilities rated up to 15 kW 4,298 6,713 5,646 -15.9%
Power generation 0 0 0 0.0%
Distribution grids 6,785 5,430 3,982 -26.7%
Technology upgrade and revamp 6,670 4,846 3,796 -21.7%
New construction 115 584 186 -68.1%
Automated process control (excluding AISKUE) 1,540 1,252 1,126 -10.1%
Electric power metering and monitoring means (AISKUE) 760 531 324 -39.1%
Safety programs 461 213 130 -39.1%
Procurement of electric grid facilities, land lots, other facilities 598 211 5 -97.6%
Other programs and activities 26 14 2,436 >100.0%
Others (buildings; equipment not included into construction cost estimates) 1,967 1,036 1,230 33.2%
Technology upgrade and revamp 25,602 22,263 12,433 -44.2%
New construction 16,469 25,306 21,421 -15.4%
Others 624 226 2,441 >100.0%

Long-Term Investment Program

The long-term investment program of PJSC MOESK for 2015-2019 was prepared in compliance with the Electric Power Sector Development Strategy for Moscow for the Period 2014-2019, Prospective Development Scheme and Program for Electric Power Sector in Moscow region for the Period 2015-2019.

The long-term investment program for 2015-2019 was approved by Order of Russian Ministry of Energy No. 735 dated October 16, 2014.

The key objectives of PJSC MOESK investment program are as follows:

  • modernization of equipment as required for sufficient, reliable, uninterruptible power supply to consumers;
  • commissioning of new capacities to close the deficit of loads and increase the volume of reserve capacity in feed centers;
  • implementation of program for elimination of limitations on technological connections to overloaded feed centers;
  • ensuring power output from the newly commissioned power generating plants of PJSC “Mosenergo”;
  • implementation of development plans for Troitsky and Novomoskovsky Administrative Districts due to construction of new feed centers (220 kV station “Khovanskaya”, 700 MVA);
  • ensuring the full scope of technological connections.

Main Cost Parameters of Investment Program 2016-2019

Capital investments, RUB mln without VAT
 

Commissioning of fixed assets, RUB mln without VAT

Financing, RUB bln with VAT

Main Physical Parameters of Investment Program 2016-2019

Transformation capacity, MVA

Transmission lines, km

Thus, implementation of approved investment program provides for commissioning of 12,618 MVA of transformation capacities and commissioning of 12,056 km of transmission lines with 182,635 mln rubles financing over 2016-2019.

Areas of Investment Program, RUB mln with VAT

Areas of Investment Activities 2016 2017 2018 2019 2016-2019
Total 43,148 43,910 47,481 48,096 182,635
Technology upgrade and revamp 24,730 23,227 27,236 31,738 106,931
New construction 16,378 18,669 18,312 14,502 67,861
Others 2,040 2,014 1,933 1,855 7,843
Priority projects 12,043 14,881 15,802 14,513 57,239
R&R 6,931 7,649 9,177 11,032 34,789
New construction 5,112 7,232 6,625 3,481 22,450
Programs 9,396 8,467 10,444 9,605 37,912
R&R for HV (TL, SS) 9,044 8,173 10,128 9,423 36,768
New construction for HV (TL, SS) 352 294 316 182 1,144
Technological connection facilities 10,247 10,556 10,687 10,428 41,919
Distribution grids 6,234 5,763 6,229 9,439 27,665
R&R 6,073 5,585 6,221 9,439 27,318
New construction 161 177 8 0 346
Automated process control (excluding AISKUE) 1,808 1,146 652 619 4,225
Electric power metering and monitoring means (AISKUE) 506 409 675 411 2,001
Safety programs 64 61 176 200 501
Procurement of electric grid facilities, land lots, other facilities 0 0 0 0 0
Other programs and activities 810 612 883 1,025 3,330
Payment of interest on borrowed funds 2,040 2,014 1,933 1,855 7,843

Out of the total scope of capital investments in accordance with the approved investment program for 2016-2019 (182,635 mln rubles with VAT), retrofit and revamp of existing electric power facilities will take 106,931 mln rubles (or 58.5%), new construction and expansion will take 67,861 mln rubles (or 37.2%), others (payment of interest on borrowed funds) will take 7,843 mln rubles (or 4.3%).

Основная доля инвестиций в соответствии с утвержденной инвестиционной программой предусмотрена на финансирование:

Technology upgrade and revamp of HV facilities
mln rubles with VAT or 39.2%

71,557

Technological connection facilities
mln rubles with VAT or 23.0%

41 919

Distribution grids
mln rubles with VAT or 15.1%

27,665

The total volume of the Company’s own funds used to finance the investments (with consideration of advances for technological connections) ismln rubles or 96.3%

175,806

Implementation of new construction and retrofit program will prevent the delay in connection with procurement and replacement of damaged power transformers. Due to prevention of overload, the equipment service life will be extended since the overload deteriorates the insulation characteristic of equipment and increases the risk of damage to expensive equipment.

Implementation of the program shall:

  • decrease the number of overloaded power transformers, overhead and cable lines with all voltage levels;
  • bring the breaking characteristics of 6-110 kV circuit breakers in compliance with the regulatory documentation requirements;
  • redistribute the load across existing grids of PJSC MOESK;
  • modernize the operational funds;
  • improve the reliability of power supply to consumers;
  • increase the reliability of data on electric power transmission.
  • Sources of Financing 2016-2019, RUB mln

My Report

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