05.Kazachenkov Presentation (07.02.2012) (1)
description
Transcript of 05.Kazachenkov Presentation (07.02.2012) (1)
Russian Transmission Grid: Present and Future
Deputy Chairman
of the Management Board
Andrey Kazachenkov
7 February 2012, Italy
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50 000
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Length of transmission lines, km
Tra
nsfo
rme
r
Cap
acity,
MV
A
Terna
RED Electrica
FINGRID
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Federal Grid Company: Company Profile
Indicator
Length of transmission lines 124,000 km
Transformer capacity 312,000 MVA
Number of substations 802
Electric energy output 471 billion kWh
Number of employees 23,200
Servicing area 13.6 million km2
MES East
MES Volga
MES Siberia
MES West
Siberia
MES Urals
MES South
MES North West
MES Center
Federal Grid
Company
Réseau de Transport
d'Électricité
Comparison of Federal Grid Company with
Leading European Grid Companies
Federal Grid Company
has a natural monopoly
status, owns and provides
electricity transmission
services through
the Unified National
Electric Grid
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Track record of substantial growth (2009 – 2010
revenue increased by 29%)
Rigorous programme of efficiency savings
Focus on capital structure optimization
Ability to obtain one of the lowest debt interest rates
among Russian companies
Why Federal Grid is a Good Investment Case?
Scale of Business Growth Prospects
Supportive Regulatory Regime Strong Financials
Anticipated electricity demand 2010 – 2020
CAGR of 2.4%
System upgrade focused on improving efficiency
and reliability of the transmission network;
development of the smart grid model
Largest publicly traded electricity transmission
company in the World (1) with over 120,000 km of
transmission lines with total capacity of over
300,000 MVA
Leading Russian blue chip company and the largest
Russian utility company by market capitalization
Unique natural monopoly position on the Russia’s
high-voltage electricity transmission market,
operating in 73 out of 83 Russian regions
Source Company data; IFRS financials; Energy Forecasting Agency
(1) By length of transmission lines and transformer capacity
Business regulation based on 5-year Regulatory
Asset Base (RAB) model
Guaranteed return on new invested capital
11% in 2010 – 2012 and 10% in 2013 – 2014)
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Innovations and energy efficiency to provide future reliability and safety of National Electric Grid
Investments in R&D until 2014: RUB 19 billion
Innovation program until 2020
Stable electric energy supply and reliable grid operations
all over the territory of Russia
Volume of transmitted electric energy amounts to 50%
of the aggregate electric energy consumption, given 6-7% share
in the end-cinsumer tariff
Ensuring social and economic stability in Russian regions
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Regions where Federal Grid operates
Development of infrastructure for national economic growth
Proactive participation in the Government’s infrastructure projects
(Sochi-2014, East Siberia Pacific Ocean oil pipeline, the APEC Summit, Skolkovo, etc.)
Switch to long-term planning and tariff regulation in 2010
Contribution to Russian regional development via building infrastructure
Strategic Priorities
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Delivering market value to shareholders & investors
Transparency and commitment to “best practice” corporate governance
Greater liquidity on the MICEX and the London Stock Exchange
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25 June 2002
Federal Grid Company
was founded on 25
June, 2002
1 January 2006
Electric grid
facilities of 56
regional electricity
transmission grid
companies were
transferred to
Federal Grid
Company
1 July 2008
Federal Grid
Company was
reorganized
through integration
of RAO UES
of Russia, MSKs
and MMSKs
16 July 2008
Federal Grid
shares started
trading on RTS
and MICEX
1 January 2010
Transition to
RAB regulation
7 April 2011
Board of Directors
adopts the
Company’s
Innovation Policy
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Board of Directors
approved the new
Technical Policy
2 February 2011
Company Development
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Technical
Policy
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Tariff regulation
Tariff regulation based on Costs Plus methodology
Lack of stimulus for cost reduction, as the regulator
establishes a tariff on the basis of planned expenses
High interest rates, difficulty in forecasting cash flows
Lack of clear Financial Strategy
The Company is perceived in the financial markets
as a “closed” company without public story
The Company is practically unknown in the international
capital markets
Lack of a long-term debt strategy
Incompliance with IFRS
Untimely disclosure of the Company’s results for financial
markets
Existence of qualifications in the audit reports
Lack of IFRS specialization among the Company’s own
employees
Federal Grid Company (2003-2009) Federal Grid Company (2010- the present)
Tariff regulation
Tariff regulation based on Regulatory Asset Base system
(RAB)
The Company is focused on cost reduction and motivated
for a greater cost efficiency
Development of Financial Strategy
The Company developed and approved Dividend Policy
and Credit Policy based on RAB principles
The Company is listed on the Main Market of the London
Stock Exchange (28 March, 2011)
Proactive investment marketing — the top management
is involved in IR events (meetings, roadshows, briefings)
The Company accelerates the preparation of IFRS
statements (by 4 months for 2009 FY, by 2.5 months for
2010 FY)
Introduction of New Standards
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RAB Regulation: Transforming Approach to Financing
RAB Regulation
Since 1 January, 2010 Federal Grid Company operates on the basis of RAB regulation
Tariff for electricity transmission includes return on invested capital in compliance
with best international practices based on Regulatory Asset Base (RAB)
Regulatory impetuses are established to improve operating efficiency during the regulatory period
Clear planning of long-term investments based on formation of financing sources
Optimization the capital structure through an increase in debt position
2010 2011 2012* 2013* 2014*
Return on initial invested capital 3.9% 5.2% 6.5% 7.8% 9.1%
Return on new invested capital 11% 11% 11% 10% 10%
January 2010
• Switched to 3-year RAB regulation
September 2010
• Regulation period prolonged to 5 years
April 2011
• Tariff growth for 2011 has been smoothed out for 5%; Other potential changes discussed
RAB: Evolution of Approaches
* to be approved by the regulators
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71,21756,565
113,330
87,580
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150 000
2009 2010 1H2010 1H2011
67,717
42,619 32,01945,459
59.8%
48.7%
56.6%63.9%
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60 000
90 000
2009 2010 1H2010 1H2011
0%
25%
50%
75%
100%
27,91012,692
17,160
22,810
19,6%
24,6% 22,4%
32,0%
0
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40 000
2009 2010 1H2010 1H2011
0%
10%
20%
30%
40%
Revenue RUR MM
EBITDA adj. (1) and Margin RUR MM %
CAPEX RUR MM
Profit for the period adj. (1) and Margin RUR MM %
EBITDA Margin
Net Income Margin
Strong & Stable Financial Performance
51,994
141,800
90,934
69,581
0
50 000
100 000
150 000
2009 2010 1H2010 1H2011
Source Company IFRS financials
(1) Adjusted for non-specific impairment provision of PP&E, impairment of available-for-sale investments and associates, loss on dilution of share in
associates, revaluation loss on PP&E, loss on re-measurement of assets held-for sale, gain on sale available-for-sale investments
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Approved by Government of the Russian Federation Includes: Objectives and development priorities for 15 years Electric energy consumption forecast Deployment plan for electric energy facilities
General Scheme of Electric Energy Facilities’ Deployment
Approved by Russia’s Ministry of Energy Includes : Electric Grid scheme and development program Renovation program Coordinated plans for construction and operation
of grid infrastructure and generating facilities
Development Scheme of Electric Grid
Federal Grid Company’s Investment Program
Approved by Russia’s Ministry of Energy
Agreed with: Federal Tariff Service, Ministry of Economic
Development, System Operator of UES
Includes:
Register of construction projects’ plans and characteristics
Sources of financing
Approved by: Russia’s region Includes : Plans for putting grid infrastructure
and generating facilities into operation Balance of electric energy production
and consumption
Scheme Development of Russian Energy Sector
Development Scheme of Region’s Power Industry
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Total amount of planned investments for 2010–2014 is RUB 952.4 bn
Grid upgrades under
Federal Programs( (2)
(4,808 km; 4,181 MVA)
Upgrading grid facilities
in Moscow, St. Petersburg,
Tyumen (980 km; 17,531
MVA)
Backbone grids
development(3)
(5,367 km; 10,890 MVA)
Innovations,
energy efficiency,
and technological operations improvement
Fixed asset renewal
(10,468 km; 37,866 MVA)
Technological
connection
(33 km; 2,577 MVA)
Other grid development
projects
Joint projects with
regional authorities (1)
(5,367 km; 10,890 MVA)
Capacity provision
of NPPs, HPPs, TPPs
(5,180 km; 10,936 MVA)
(1) Excluding Moscow, St. Petersburg, and Tyumen
(2) East Siberia: Pacific Ocean oil pipeline, Sochi Olympic Games, Vankor, Sayan, etc.
(3) Excluding joint projects with regional authorities
127.4 (13.4%)
90.4 (9.5%)
212.8 (22.3%)
65.8 (6.9%)
216.3 (22.7%)
14.7 (1.5%)28.4 (3.0%)
58.7 (6.2%)
137.9 (14.5%)
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Investment Program for 2010-2014
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Construction of electricity supply
facilities on Elginskoye coal deposit
Start Date: 2011
Due Date: 2013
Capacity provision of Kalininskaya
NPP generating unit #4 (1 000 MW)
Start Date: 2009
Due Date: 2012
Underground cabling in Moscow,
St. Petersburg
Start Date: 2011
Due Date: 2015
Infrastructure for Sochi Olympic
Games 2014
Start Date: 2008
Due Date: 2012
Transition from overhead lines to
cable and construction of Skolkovo
220 KV substation
Start Date: 2010
Due Date: 2012
Capacity provision of
Boguchanskaya HPP start-up
complex (1 000 MW)
Start Date: 2012
Due Date: 2014
Infrastructure for APEC summit in
Vladivostok in 2012
Start Date: 2008
Due Date: 2011
Construction of Zeyskaya HPP—
Russian-Chinese border
transmission line
Start Date: 2010
Due Date: 2013
Electricity supply of East Siberia
Pacific Ocean oil pipeline
Start Date: 2011
Due Date: 2016
Key Investment Projects
Source Company Data
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Integrating all types of generation (including small generators) and all types of consumers (from households to large industries) for the situational management of demand for their services and active participation in energy system operation
Changing real-time parameters and grid topology, in accordance with current mode conditions, excluding the origination and development of emergencies
Ensuring the broadening of market opportunities for the infrastructure through the mutual provision of a broad range of services for market and infrastructure subjects
Minimizing losses, developing self-diagnosis and self-recovery systems by observing reliability conditions and electric energy quality
Integrating the electric grid and information infrastructure to create an all-mode management system with full-scale information support
Smart Grid is a brand-new state of the grids based on new principles
and technologies related to electric energy transmission
and transformation, which allows for:
Generation
and alternative
sources of energy
Transmission lines
Microturbines
and accumulators
Consumers
Smart Grid
Smart grid
element
Industrial facilities Energy transmission and storage (High-Capacity Storage Batteries)
Smart Grid — New Quality of Russian Energy Industry
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South
Urals
East
North-West
Siberia
Smart Grid of the North-West
Vladivostok
St. Petersburg
Moscow
Khabarovsk
Volga
Center
Pilot projects of the North-West are focused on:
Ensuring required reliability of energy supply to urban
consumers
Building efficient grids
Providing electricity exchange
Smart Grid: Pilot Projects of North-West and the East
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Smart Grid of the East
Pilot projects of the East provide for:
High-quality energy supply for natural
resources deposits
Additional efficient capacity
Reliable electric energy supply in the
southern part of the Primorye territory
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Услуги
UES of North-West
UES of Urals UES of
Volga
UES of East UES of Siberia
UES of South
UES of Center
Export/import
to/from Norway
Integration of Urals
and Siberia energy
systems
Export/import
to/from Finland
Moscow St. Petersburg
Tomsk
Export to China Export
to South
Korea
Integration of Siberia
and East energy systems
West-East Energy
Bridge
Center-Urals
Energy Bridge
Export to
Azerbaijan
and Georgia
Export to China
Export/import
to/from
Kazakhstan Export to
Mongolia
Existing export/import Building connections
Export to
Turkey
Prospects for Energy Bridge Development in Russia
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Integration into the International Community
• Direct dialogue and involving are important for
regulators and regulated energy companies
• Cooperation considerably expands the range
of discussed issues and contributes to the
general development of the regulatory system;
• One way to achieve this interaction is to
organize direct professional dialogue between
Federal Grid Company and foreign grid
companies.