IDGC of Centre is a company whose infrastructure is essential to 11 regions. The main quality indicator of our services is the minimal level of power losses. The reduction of grid power losses is among the highest strategic priorities of the Company’s operations.

Every year, the Company’s Board of Directors approves the Programme of Actions for Power Losses Reduction, introduces new technologies and installs new energy saving equipment. Special attention is paid to the development of the automated information and metering system for electricity metering.

In 2015, IDGC of Centre reduced actual grid power losses from electricity output into grids to 9.35%, which is a 0.09% improvement over the projected number. Compared to 2014, power losses were reduced by 93.1 mln kWh, and losses in similar situations were reduced by 0.14%. All of this saved us over RUB 190 mln.

The main indicator of our production operations — electricity transmission services — amounted to 54,782.5 mln kWh in 2015, which is a 0.7% increase compared to 2014. In 2015, the share of IDGC of Centre in the electricity transmission market was 86.0% based on the Company’s shares in RGR of the regions where it operates.

Maintaining leading positions in the number of electric grids assets among distribution companies drives us to introduce innovative solutions and use the most up-to-date technologies to the maximum extent possible. The first Russian production assets management system was created at IDGC of Centre to provide the continuous monitoring of operations quality. This system generates a unified and consistent database of electric grids facilities, including the parameters of diagnostic measurements, as well as any defects and critical points. We used this software package to automate production planning and control processes, targeting the reliability of the programme’s improvement of implementation control and analysis.

Our production potential and implementation of the investment

programme contribute to the decisions made concerning the connection of grids to new consumers. In 2015, 49,570 contracts for grid connection were executed. The total number of completed contracts amounted to 63,303, which is more than projected plan for 2015 and more than 2014’s figures by 32% and 26% correspondingly. The total capacity connected under these contracts exceeds the previous year by 2%. In 2015, total revenue from grid connection amounted to RUB 1,159.7 mln, which is a 5% increase in comparison with the projected plan. The market share of grid connections in 2015 amounted to 88.5%.

Another indicator showing the improvement of the quality of our services is the improvement of reliability rates. The number of processes violations decreased by 19.5% over the previous year, and the unit failure rate decreased by 21.8%, reaching a minimum for the last three years.

In 2015, we managed to meet the growing needs of the economy and the social sector in power supply at cost efficient tariffs. Furthermore, the Company managed to diversify its credit portfolio and preserve its financial sustainability.

In 2015, the revenue under RAS amounted to RUB 79,817.2 mln, the growth of electric power transmission proceeds amounted to 2.4% over the same period of 2014. Earnings before Interest, Taxation, Depreciation & Amortisation (EBITDA), amounted to RUB 15,219.2 mln, and the profit margin increased to 19.1%. Despite the negative external factors, these results were achieved thanks to the successful implementation of a cost reduction programme resulting in a 8.5% decrease. The main areas of efficiency improvement were the Optimisation of the number of administration staff, improving the control of costs, and the revision of relations with suppliers and contractors in the course of procurement activities.

Despite tough tariff restrictions and the challenges associated with a shortfall in income from the special terms of consumers’ connections, the net profit in 2015 amounted to RUB 909 mln, which is by 72.7% below the same indicator last year, but exceeds the projected plan by RUB 1,334.8 mln. This positive financial result was supported by the efforts of the Board of Directors, the Company management and all its employees by improving the efficiency of their operations.

Meeting economic needs in transmission capacities, the Company is a reliable partner

in the planning of the regions and in implementing regional development programmes. In addition to this, the Company is a diligent taxpayer. IDGC of Centre continuously works on the improvement of its financial and operating efficiency, as it is one of the most efficient ways to ensure the balance of the consumer’s interest, the interest of the shareholders and the economy as a whole.

Commitment to social business responsibility and sustainable development principles is an essential element of the Company’s corporate policy. Therefore, IDGC of Centre is committed to ensuring the continuous development of its human resources by: expanding the competences of the employees, creating a favourable social and production environment, ensuring the engagement of each employee in its operations to achieve the Company’s targets. The Company is focused on the prevention of third party accidents at electric grids facilities, the adaptation of its professionals, and the improvement of training and skills of the Company’s employees.

IDGC of Centre implements an environmental policy to reduce negative impact on the environment. These actions taken include the Company’s operations in monitoring the transportation of the toxicity of exhaust gases, the monitoring of discharged waste-water and the separate storage of waste at industrial sites.

The Company has vast experience in replacing oil breakers with SF6 and vacuum breakers, which have high reliability rates, are fire-safe and environmentally friendly. In order to protect birds, we use up-to-date insulated wires, of which the total length of these wires was increased by 3,464 km in 2015.

Last year, the Company managed to improve its potential and is ready for the challenges of 2016. Despite the risks, including a dynamically changing tariff policy, the reduction of power consumption by certain industrial plants, a deterioration of consumers’ capacity to pay and various negative external macroeconomic factors, the experience and professional skills of the personnel of IDGC of Centre allow us face the future with confidence..

On behalf of the Company’s Board of Directors and the senior management staff, we would like to thank all employees for their diligent work in 2015, and we would like to thank our shareholders and investors for their trust in such a difficult economic environment.

The project of automation of the substation 110/10 kV “Yartsevo-2”, including relay protection and automation equipment, data collection and exchange systems which comply with IEC 61850 “Communication Networks and Systems in Substations”, was completed at the Smolenskenergo branch.

The auxiliary IEC 61850-compliant equipment was implemented at Yartsevo-2 without being backed up by conventional protection devices based on microprocessor (for new facilities) or electric devices (for existing facilities).

For the collection of data, the processing, displaying and the exchange of up-to-date data collection, an exchnage system, which was installed in the station control room along with the industrial PC, was used as an automated working station for the protection engineer.

This system may process up to 5 thou. signals, and exchange information with higher levels of the dispatch control system in up to 16 directions. A large set of standard protocols for data collection and exchnage allows for the integration of up to 200 lower level devices (relay protection terminals or other devices). In addition to this, the interlocking of real time commutation devices is provided.

The implementation of this project enabled us to:

In 2015, the Company successfully implemented several projects for the installation of 35 kV switching devices (reclosers) at overhead lines and substations.

This installed innovative equipment has a current and voltage measuring system embedded in the recloser, which together with supplied control and emergency protection cabinets (adjusted during production), enabled the Company to minimise the time used to design projects and installation works. In addition to this, a folder with typical technical solutions for metal structures was created to simplify the design of projects and adaptation at the existing power facilities.

The introduction of reclosers helps to improve the reliability of power supply to customers. The Company considers the automation and controllability of the 10-35 kV grids as the first stage of implementing IDGC of Centre’s comprehensive projects for the creation of intelligent grids (Smart Grid).

In 2015, a pilot operation of 0.4 kV steel-anchor multisided poles, which were developed by the Company, was successfully completed.

Their application is aimed at reducing logistic and labour costs in the construction of distribution grids, the improvement of power supply reliability to customers and its safety, which is especially important for overhead lines in residential areas.

These steel multisided poles resulted in a reduction of capital expenses by 20%. This development was patented by the Company, and the solution was added to Rosseti’s Register of Innovations.

The creation of the training centre (laboratory) became the next step in implementing the preparation plan for specialists under the Cooperation Agreement between IDGC of Centre and National Research University “MPEI”.

The centre will be used for training practical knowledge students receive from the educational institution. Practical training at the centre will be created for the following disciplines: labour safety, the electrical equipment maintenance of power grids, monitoring processes and control, the diagnostics of the status of power grid equipment with works provision for one or two specialisations.

In 2015, the second site of the training centre was launched: a training laboratory with a substation and distribution grid equipment.

The project was implemented with the assistance of a large number of production companies that supplied their equipment on a cost free basis. This partnership resulted in the provision of up-to-date panels with short-circuit indicators, panels with 35 kV and 10 kV circuit breakers, a panel with a 10 kV molded phase-insulated wire, and other templates of up-to-date electrical equipment.

In 2015, IDGC of Centre adopted the Guidelines on creating 0.4-10 kV power grids using the pole-mounted 6-10/0.4 kV transformer substations.

The following requirements were developed for the design of a pole-mounted transformer substation:

The cost of the design was reduced by installing voltage surge suppression devices that have a different design from conventional power transformers on the tank cover. The scheme of transformer substation connection to power grids was revised.

All branches of IDGC of Centre plan to use pole-mounted transformer substations in the connection of new consumers and during the scheduled renovation of 0.4 kV grids. In 2015, 30 of these newly designed pole-mounted transformer substations were installed in several of the Company’s branches.

Kostroma branch specialists have performed renovation of the substation Kostroma-1. The substation provides electric connection between the substations Motordetal and Kostroma-2 included in the national electric grid, and supplies electricity to the Zavolzhsky District of the Kostroma Region with a population of more than 22 thou. people.

The substation was renovated to cover the capacity shortage in the area and to create opportunities for grid connection of new consumers. Two new 110 kV power transformers of 16 MVA each were installed at the substation during the renovation. Also, new microprocessor protection were put into operation, up-to-date telecontrol system was installed, and high-speed communication channels with fiberoptic lines were commissioned. The state-of-the-art equipment meets modern requirements and allows for the possibility to control the power facility remotely from the Grid Control Centre of Kostromaenergo. The renovation operations were performed without disconnecting consumers, but with a phased decommissioning of the equipment.

The Kostromaenergo branch completed grid connection of two transformer substations to supply power to the plant of American company National Oilwell Varco producing drilling rigs (NOV Kostroma LLC). The committed maximum capacity of the new facility is 5,381 kW; to achieve it, the Company upgraded the substation KPD, built a 10 kV distribution station and two 10 kV cable lines with a length of 4.6 km each.

Involvement of one of the world’s leading manufacturers of oil and gas equipment is meaningful not only for the Kostromaenergo branch, but also for the Kostroma Region as a whole. The project plays an important social and economic role associated with an increase in the standard of living and improvement of well-being in the region. The total investment in the facility was more than RUB 4.2 billion. In addition, it is expected to create more than 300 jobs for the local community. The project has been included in the regional Register of Investment Projects with MFN treatment.

During the implementation of the regional residential construction programme, Kurskenergo supplied electricity to the first phase of a new microdistrict being built in the village of Bolshoye Soldatskoye. The project provides for construction of 40 residential buildings with a total living area of 5,200 m2. 20 houses were built during the first phase; their grid connection was provided by workers of the Kursk branch.

Electricity for the new buildings is supplied from the transformer substation 204 with capacity of 160 kVA. Our energy workers performed installation of the overhead line 0.4 kV in the shortest time; this allowed providing the developer with the required capacity of 120 kW. During the installation operations, modern and safe selfsupporting insulated wires were used with a high level of reliability and long service life.

Development of sports infrastructure

Kurskenergo completed grid connection of the sports and recreation centre (SRC) in the Kshensky settlement of the Sovetsky District, the Kursk Region. The SRC with a total floor area of 6,000 m2 includes an all-purpose game room, a gym, fitness and yoga rooms, and a swimming pool. Maximum capacity of the SRC is 500 people.

To provide grid connection, the Kurskenergo built a modern packaged transformer substation with a voltage class of 10/0.4 kV and capacity of 2×250 kVA, two 10 kV overhead power lines, two cable lines with a voltage of 0.4 kV, and an electrical network for sewage pumping station.

Work with the younger generation

Kurskenergo, together with the Kursk Electromechanical Technical College and the Kursk Railway Transport Technical College, has organised Academic Olympics on electrical engineering disciplines for students of specialised educational institutions.

The purpose of the Olympics was to assess the quality and degree of training of the future energy workers and potential employees of Kurskenergo, and to encourage learning and creative efforts of the young people. The Olympics were held in the training centre of Kurskenergo operating personnel. All the teams demonstrated good theoretical and practical grounding in the subject.

The Belgorod branch of IDGC of Centre has supplied electricity to the socially significant budgetary institutions of the Belgorod Region. By the start of the academic year, 27 kindergartens, 8 schools, 2 sports and recreation centres and 2 cultural establishments were provided with electricity. The priority projects included the Druzhba Ice Arena in the settlement of Rakitnoe, the Centre for Cultural Development in Shebekino, the Children’s Regional Hospital in Belgorod, the Medical Centre Generation, and the boiler facility of the maternity department in Stary Oskol.

Development of agro-industrial complex

In the Belgorod Region, the agro-industrial complex continues to evolve, and the key projects in the field of import substitution are implemented. In 2015, the Company’s experts provided the requested capacity to the feedlots of JSC Prioskolye in the Volokonovsky and Valuisky Districts. JSC Prioskolye is a reliability category 1 consumer. The company is one of the largest producers of chilled and frozen meat in Russia. It consists of two feed factories, vegetable stores and granaries in the Ivnyansky, Veydelevsky and Gubkinsky Districts, the grain drying unit in Prokhorovka and about 14 dairy farms, dairy units and small peasant farm enterprises. This cooperation will contribute to increasing the volume of high-quality domestic agricultural products.

Upgrading grids in urban localities of belgorod region

The Belgorod branch renovated grids located in 12 municipal districts of the Belgorod Region and under streets in two largest cities in the region — Belgorod and Stary Oskol.

First, grids feeding the socially significant facilities and critical infrastructure were reconstructed.

Power lines that were built 25-30 years ago get dismantled by energy workers of IDGC of Centre and then virtually rebuilt. At the same time, power supply schemes are revised, and all violations of the PTL exclusion zone boundaries are eliminated. Obsolete equipment that fails to handle the load is replaced with new equipment. To ensure uninterrupted supply of electricity to consumers distant from the main grid, pole-mounted transformer substations are used; these TS are the R&D product of IDGC of Centre that was patented and actively used in the branches during the renovation of 0.4-10 kV grids and connection of small farms and individuals with relatively small loads. For 5 years in Belgorod Region, about 2,000 km of grids were upgraded in 150 small hamlets and villages.

Development of transport infrastructure

Belgorodenergo participated in renovation of eight highways in the Belgorod Region. Our energy workers connected the exterior lighting along new roads to the central power supply; the total road length is 50.5 km. About a thousand of modern energy efficient luminaries were installed at the highways. The work has been highly appreciated by the regional administration, and received an official message of thanks from Evgeny Savchenko, the Governor of the Belgorod Region.

Tambovenergo experts have begun to implement the first public-private partnership project (the PPP Project) in the power grid complex. It is aimed at creating power grid infrastructure for companies engaged in poultry operations — Tambov Turkey, LLC and OJSC Tokarevskaya Poultry Plant. The companies under construction will be the major agro-industrial facilities in the Central Federal District. About 3 thou. new jobs will be provided in the region with the commmissioning of the new facilities.

For implementation of the PPP Project in the Tambov Region, the Company was awarded the National Prize Rosinfra-2015 in nomination of ’The best PPP initiative in the energy sector’. Further, it is planned to share the experience obtained in the PPP sphere with other regions where the Company operates, which will enable increase in the availability of electricity and capacity to consumers and provide development and economic growth.

Assistance in implementation of large residential projects

Specialists of the Tambov branch of the Company provided electricity to the rapidly growing northern area of the regional centre, where only in recent years, several large districts were built — Moskovsky, Raduzhny, Solnechny, Uyutny, with related social infrastructure (hospitals, schools, kindergartens). Tambovenergo implemented renovation of a key element in the investment programme — 110/6 kV substation Tambovskaya 8. In the course of the project, capacity of the Tambov largest power supply centre was increased from 16 MVA to 40 MVA; the facility was fitted with modern equipment and the latest security and fire alarm systems. Now the substation meets the latest requirements in terms of reliability and quality of electricity supply to consumers.

Low-value resistors

The Tambov Region has been the first region where the Company started implementing a modern process design solution — low-value resistors. The Company began to apply these devices in the Tambov Region. These new resistors were installed at the 35/10 kV substation Ekaterininskaya. Low-value resistors are applied for selective disconnection with ground fault. Their use allows excluding negative impact of the arc high frequency voltage swells on cable lines insulated with cross-linked polyethylene, which reduce service life of the lines. Also, they eliminate the risk of injury to people and animals in single-phase ground fault. In addition, low-value resistive neutral grounding is much more cost-efficient compared to neutral grounding with arc suppression coil.

Contribution to healthcare

Voronezhenergo has made a significant contribution to the implementation of regional health target programmes in Voronezh Region — 34 new primary health posts (PHP) and outpatient clinics located in rural areas were prepared for grid connection. The work is carried out under the regional target programme “Development of Health in Voronezh Region for 2011 — 2015”. The existing 0.4 kV power line sections were renovated and new sections were built. The total connected capacity was more than 0.5 MW. As part of the support services for grid connection, Voronezhenergo employees performed work within the competence of the applicant: installed electricity meters, provided suspension works from the boundary of balance sheet attribution to the PHP buildings using self-supporting insulated wires.

Development of the million-plus city Voronezh

Voronezhenergo works on refurbishment of six main substations that supply electricity to the city: substations 13, 38, 42 (in Kominternovsky District), 43, 44 (Levoberezhny District) and 28 (Sovetsky District). The need for renovation resulted from rapid growth of energy consumption. It will significantly increase reliability of power supply for companies and the public in the regional centre, and will provide the possibility of grid connection of new consumers. Refurbishment of substation 13 Studencheskaya enables the construction of large multi-storey buildings in the Kominternovsky District where very active residential construction takes place. At the same time, upgrade of the 110 kV substation 43 will make it possible to develop the left-bank part of the city, including construction of multi-storey residential properties, industrial premises and grid connection of sewage treatment facilities with design capacity of 4 MVA for the 1st category of power supply.

Development of agro-industrial complex

Voronezhenergo contributes to implementation of a number of important investment projects in the region’s agro-industrial complex. In 2015, employees of the branch provided grid connection of several sites of one of the leaders in the domestic pig husbandry AGROECO Group in the Kalacheevsky and Novokhopersky Districts of the Region. Work is underway to provide the Voronezhmyasoprom feed factory being built in the territory of Semiluksky District area with power grid infrastructure. These projects have been given the status of Particularly Significant Projects; they are included in the Programme of Social and Economic Development of the Voronezh Region for 2012-2016.

Also, the Company energy professionals provide electrification of two complete cycle pig farms Trostyansky and Rastykaylovka that were recognised economically important for the Voronezh Region by the Ministry of Agriculture of the Russian Federation.