Core business
The power industry can not be defined as non-core for Gazprom. Gazprom’s strategic objective is to become a global energy company covering the whole value chain – from upstream to downstream – both for gas and liquid hydrocarbons, as well as producing a wide range of deliverables including power.
Gazprom is one of the main suppliers of fuel to power stations. The gas and power industries integration is a worldwide trend exemplified by mergers between E.ON (energy) and Ruhrgas (gas), or between Gaz de France and Suez in Europe.
Equity stakes in Russian energy companies enabled Gazprom to get access to an important market segment and to manufacture products with higher value added. Besides, investment in the power industry enhanced the Company’s competitive capacity and operational flexibility.
Electric power produced by Gazprom Group’s generating companies, billion kWh (TGC-1 data is not included as control over the company was obtained in late 2009. WGC-2 and WGC-6 data is included starting from 2H 2008)
Efficient structure
Between 2007 and 2008, as a result of the RAO UES reform in Russia and participation in additional share issue by power generating companies, Gazprom Group became Russia’s largest generating assets owner.
Heat produced by Gazprom Group’s generating companies, million Gcal (TGC-1 data is not included as control over the company was obtained in late 2009. WGC-2 and WGC-6 data is included starting from 2H 2008)
In order to create the efficient management structure compliant with the unified corporate standards, in 2009 the Group’s key generating assets – Mosenergo , TGC-1 , WGC-2 and WGC-6 – were consolidated on the books of Gazprom energoholding, Gazprom’s specialized subsidiary. Among other things, the company bears responsibility for the power industry strategy elaboration and control over its execution (including such elements as fuel supplies, heat and power marketing, and new generating facilities construction) as well as presentation of the Group’s standpoint on the Russian power industry development in the dialogue with government bodies.
Generating assets
Gazprom Group’s generating facilities (as of January 2011)|
Company name |
Rated capacity |
|
|---|---|---|
|
|
Power, GW |
Heat, thousand Gcal/h |
|
Mosenergo |
11.9 |
34.9 |
|
TGC-1 |
6.4 |
14.3 |
|
WGC-2 |
8.7 |
1.6 |
|
WGC-6 |
9.2 |
2.7 |
|
Kaliningrad CHPP-2 (second power generating unit) |
0.45 |
0.34 |
|
Total |
36.6 |
53.6 |
A high efficiency of Gazprom’s power generating business is underpinned by state-of-the-art combined cycle gas turbine units, combined heat and power plants, hydropower generating facilities.
The Group’s power stations are located in rapidly developing Russian regions guaranteeing solvent demand for heat and power. The geographic location of TGC-1 owned generating facilities enables power exports to Finland and Norway.
Investments
Gazprom’s power generating business development is directly linked with investment programs implementation in the heat and power sectors. All of the power industry investment projects are implemented by the Group in compliance with the obligations undertaken upon the generating assets acquisition. Between 2007 and 2009 Gazprom commissioned 1.7 GW of new capacities.
In 2010 capacity creep projects were implemented by WGC-6 (420 MW CCGT-420 at SDPS-24), TGC-1 (Pervomaiskaya CHPP-14 – 180 MW; Lesogorskaya HPP-10 – 30.5 MW; Svetogorskaya HPP-11 – 29.5 MW), Mosenergo (16 MW GTU at CHPP Pavlovsky Posad). A 450 MW second power generating unit was commissioned at Kaliningradskaya CHPP-2.
1.9 GW of new capacity will be commissioned in 2011: 420 MW by Mosenergo, 660 MW by TGC-1 and 800 MW by WGC-6. Underway is the construction of Adlerskaya CHPS rated at 360 MW of power and 100 Gcal/h of heat.
Gazprom Group is going to boost its power capacity by 7 GW in total until 2016.
Power generation is Gazprom’s core business making a noticeable synergetic effect. Gas-fired power generation projects are not the only focus of Gazprom enabling re-allocation of considerable gas volumes which are used inefficiently in the domestic power sector at the moment. Thus, we understand that Gazprom is the company most interested in the Russian power industry upgrade, power stations construction and reconstruction using the most state-of-the-art equipment. This re-allocates our most valuable resource – gas. From this point, Gazprom is the most efficient investor in the Russian power industry.
Centralization of power purchases
Taking into account the economic viability, the Group is centralizing its power purchases. Mezhregionenergosbyt, operating on behalf of Gazprom, supplies more than 85 per cent of the power consumed by Gazprom and Gazprom neft in 43 Russian regions. The company’s activities resulted in the tariff reduction through direct supplies from the wholesale power (capacity) market and exclusion of reseller services from the value chain. Direct energy supplies to the Group member companies from the wholesale power (capacity) market are carried out in 15 Russian regions.
Another member of Gazprom Group is Gazprom energo, a specialized company that operates energy assets including corporate heat and power supply facilities of the Group. Gazprom energo comprises 12 companies and manages 10,000 facilities in 44 Russian constituents. The company operates 3,800 kilometers of overhead power transmission lines, 4,300 kilometers of cable lines and 650 kilometers of heat supply networks (measured as a single line system).