Strategic report
Market (Industry) Overview
The modern power complex of Russia has a three-component structure: power generation, transmission, and sale (see fig.).
Rosseti PJSC is involved in power transmission and distribution. Being the country’s largest grid company, Rosseti PJSC combines a main-line grid complex, interregional distribution grid companies (including Rosseti Tyumen JSC), and regional distribution grid companies.
Russia’s energy industry is divided into three tiers based on technological, administrative, and territorial attributes:
Macroeconomic Trends of the reporting year, industry (market) forecast
Russia’s GDP growth in 2021 was the highest since 2008 and amounted to 4.7%, although the inflation rate was also the highest since 2015, amounting to 8.39%.
According to the Federal State Statistics Service of the Russian Federation, in 2020 the Russian economy declined by 2.7%, in 2019 the growth rate of economy amounted to 2.2%, in 2018 – to 2.8%, in 2017 – to 1.8%, in 2016 – to 0.2%.
Thus, as compared with the “pre-Covid” year 2019, growth of Russian GDP in 2021 amounted to 1.9%.
The growth dynamics of the GDP and its components in 2021 against 2020 is due to the economic recovery.
According to Rosstat, production increased in almost all sectors of the economy in 2021. As compared to 2020, the “electricity, gas and steam supply” segment demonstrated a significant increase in added value in comparison with other industries (6.1%).
The share of net exports (exports minus imports) in the Russian economy grew up to 9.6% in 2021 from 5.2% in 2020.
According to Rosstat, the Industrial Production Index in 2021 as compared to 2020 was 105.3% in December 2021 against 106.1% in the relevant period of the previous year, which reflects the rapid recovery of large industrial companies.
One of the few negative macroeconomic factors in 2021 was record-breaking inflation rate which amounted to 8.39%, the maximum rate since 2015. Significant inflationary pressure was largely driven by global trends – in 2021, an unprecedented rise in commodity and consumer prices around the world was observed, with supply chains being disrupted and extended.
According to the Bank of Russia’s forecast, the GDP is expected to decline by 8.0% in 2022 instead of the previously forecasted growth by 2.4%. The forecast is reduced by 1.1 p.p. to 1.0% for 2023, and by 0.5 p.p. to 1.5% for 2024. Projected long-term GDP growth rates reduced by 1.0 p.p. to 1.0%.
Inflation projections raised by 14.5 p.p. up to 20.0% for 2022 , by 4.0 p.p. up to 8.0% for 2023, and by 0.8 p.p. up to 4.8% for 2024.
The dynamics of oil and gas exports is expected to be uneven over the forecast horizon. In 2022, the index is projected to grow by 7.4% at face value and by 9.0% in real terms due to the increase in the volume of oil exports under the OPEC+1 deal.
Taking into account the existing OPEC+ deal, the base case projects an increase in oil production to 557.6 million tons by 2024. In the conditions of the development of crude oil refining, the gradual modernization of oil refineries and an increase in the depth of oil refining, oil exports will amount to 269.0 million tons by 2024. The growth of oil exports to non-CIS countries is projected to amount to 250.97 million tons by 2024, mainly due to an increased supply to Asia-Pacific countries. Exports to the CIS countries will remain at 18.05 million tons in 2021-20242.
In the medium term, the country’s total gas production will continue to increase. The projected growth in gas production (up to 799.6 billion cubic meters in 2024) will be provided by development of 33 PJSC Gazprom’s fields, as well as by increased production by independent gas producers.
The increase in the regulated tariffs of grid companies for consumers other than individuals will amount to 3.8% on average in the country in 2022. Given the growth in consumption, such increase should compensate grid companies for significant cost inflation caused by rising material and equipment costs. In 2023–2024, indexation parameters will be in line with previously adopted long-term parameters that originate systemic pressure on the increase in costs of grid companies The annual increase in the regulated tariffs for consumers other than individuals will remain under 3.0% in the specified period3.
The Company’s major customers that account for the bulk of stable energy consumption in the Tyumen Region are oil and gas companies that produce 64% of Russia’s oil and 91% of its gas. These companies consume 84% of the Company’s net output. The key factors that affect the Company’s net output are as follows:
- oil production rate in Russia;
- demand for petroleum products in Russia and globally;
- own power generation of oil and gas companies;
- new capacities under the grid connection agreements;
- temperature factor.
OPEC agreement, adopted at the meeting of the OPEC+ countries on July 18, 2021 regulates oil production rates which has resulted in growing oil production in the Russian Federation increasing monthly since August 2021 by 100 thousand barrels per day, which, subsequently, resulted in an increase in electricity consumption by major oil and gas companies, their consumption share equaling 84% in the Company’s total volume.
The net electricity output in 2021 amounted to 43,458 million kWh which is 2,255 million kWh or 5.7% higher than in 2020.
The growing sanctions impact on the Russian economy, as well as the cessation of oil and gas delivery to the United States and the EU countries, may lead to a 14.1% decrease of energy consumption in the oil and gas sector of the Tyumen region in 2022.
In order to stabilize the Company’s financial and economic status in the long term, Rosseti Tyumen JSC implements proactive and constant measures to stabilize financial and economic performance in terms of costs optimization, maintaining an effective tariff policy, getting income from other sources.
Strategic Goals
Throughout its history, Rosseti Tyumen JSC has adhered to the core principles and priorities of the industry. Medium- and long-term action plans have been devised to attain the goals. The Company’s strategic priorities are set forth by its shareholder Rosseti PJSC.
In June 2020, the Government of the Russian Federation approved the new Energy Strategy of the Russian Federation until 2035 (Government Decree No. 1523-r dd. June 9, 2020). Russia’s energy policy prioritizes national energy security, meeting the domestic demand for energy and related services, a transition to eco-friendly, resource-saving energy, boosting competition in the fuel and energy industry, using domestically manufactured equipment, making all levels of management more efficient in the fuel and energy industry, and taking advantage of centralized electricity delivery.
Russia’s electric power targets for 2020 are set forth in the Development Strategy of the Electric Power Grid Complex of the Russian Federation as approved by the Decree of the Russian Government No. 511-р dd. April 3, 2013 On the Approval of the Development Strategy of the Electric Power Grid Complex of the Russian Federation.
On December 26, 2019, the Board of Directors of Rosseti PJSC approved the Development Strategy of Rosseti PJSC and its SDCs (“Rosseti Group”) (“Rosseti Group Strategy”) for the period until 2030.
Rosseti Tyumen JSC acts within the Rosseti Group Strategy in the long term.
Strategic goals determined in the Rosseti Group Strategy 2030:
The company has determined the core aspects of the strategic development:
- technological and innovative development;
- digital transformation;
- business diversification;
- maintaining a set level of reliability and security of power supply;
- ensuring further increase in operational and investment efficiency;
- increasing the grid service market share;
- HR development.
In order to pursue the Rosseti Group Strategy, Rosseti Tyumen JSC adopted several policy documents including:
- Rosseti Tyumen JSC’s Digital Transformation Program 2020–2030;
- Innovative Development Program of Rosseti Tyumen JSC;
- Smart Metering Development Program 2020–2030;
- Rosseti Tyumen JSC’s Electricity Loss Reduction Program for 2020 and up to 2024;
- Power Grid Complex Environmental Policy;
- Rosseti Tyumen JSC’s Personnel and Social Policy;
- Rosseti Tyumen JSC’s Investment Policy;
- Rosseti Tyumen JSC’s Comprehensive Security Policy, etc.
Plans and Targets
The implementation of the Rosseti Group Strategy in the long term is mainly dependent on:
- keeping a set level of reliability and security of power supply;
- optimizing investment programs depending on the financial results of the Company and the electricity demand;
- increasing the Rosseti Tyumen JSC market flexibility through business diversification by developing and implementing non-tariff services / consumer services, including digital services;
- ensuring a high quality of customer service, increasing NPS, Company’s customer focus;
- systematic implementation of the Program for improving operational efficiency and reducing costs to optimize the Company’s operating expenses while keeping all social obligations to the Company’s employees, the budget and counterparties;
- effective planning and management of cash flows to ensure a high level of the Company’s solvency;
- effective credit portfolio management by maintaining the credit limit at a sufficient level and diversifying it (including existing loans refinancing in order to reduce the borrowing cost and attracting new loans at competitive interest rates);
- effective use of funding sources for the investment program in order to maintain a balance between the actually available financial resources and the objectives of the Company’s development;
- limiting the maximum amount of funding for projects without immediate economic effects (the higher the reliability indicators achieved, the stricter the limits should be);
- setting a higher priority for projects with positive economic effects (NPV>0, IRR>WACC) when decided on inclusion in the investment program.
Based on these principles, the Company has developed an action plan for the period for up to 2030.
Work done in 2021 and the Company’s plans for up to 2030
Actually done in 2021
Prospects for up to 2030
1. Technological and innovative development
In pursuit of the target model of operational, technological and situational management (OTM and SM), Rosseti Tyumen JSC optimized the Megionsky and Samotlor PDZs of Nizhnevartovsk Electric Grids branch.
Transition to the target model of operational, technological and situational management (OTM and SM) in Rosseti Tyumen JSC to improve the quality of OTM and SM by reducing the number of management levels in the organizational structure.
In pursuit of implementation of the Program for modernization (renovation) of power grid facilities of Rosseti PJSC’s SDCs
for 2020-2030, works are underway to replace oil-filled equipment with modern SF6 and vacuum equipment (1152 10-110 kV circuit breakers) in accordance with the approved plan.
Implementation of the Program for modernization (renovation) of power grid facilities of Rosseti PJSC’s SDCs for 2020-2030 to reduce repair and maintenance costs.
The initial stage of the implementation of R&D results of Rosseti Tyumen JSC:
- under the project “Development of a mobile small-sized drilling rig for mounting and reinforcing composite anchors in the ground, strengthening the HVL tower groundings. Development of composite anchors for strengthening “chopped” reinforced concrete piles of the foundations of supports and screw / pipe pile foundations of HVLs in the permafrost soils of the Arctic and the Far North”;
- under the project “Development of UVK-M vibration excitation device for automated removal of frost and hoar deposits (“kurzhak”) from wires and cables of 110-220 kV HVLs in the Far North and the Arctic”.
- patent research on UVK-M design and operating principle was conducted;
- the analysis of the results of the UVK-M prototype operation in the electric grids of Rosseti Tyumen JSC was performed;
- technical requirements for UVK-M design were developed and approved;
- models of UVK-M were developed and tested;
- draft design of UVK-M was prepared;
- a comparison of the technical and economic indicators of the developed product was made;
- UVK-M models were developed, manufactured and tested.
Implementation of R&D results within the projects:
- “Development of UVK-M vibration excitation device for automated removal of frost and hoar deposits (“kurzhak”) from wires and cables of 110-220 kV HVLs in the Far North and the Arctic”;
- “Development of a mobile small-sized drilling rig for mounting and reinforcing composite anchors in the ground, strengthening the HVL tower groundings. Development of composite anchors for strengthening “chopped” reinforced concrete piles of the foundations of supports and screw / pipe pile foundations of HVLs in the permafrost soils of the Arctic and the Far North”.
In order to implement measures for the introduction of innovative products, the design of the Project “Use of innovative materials – new generation wires (high-temperature and using composite materials)” was performed.
Implementation of the project “Use of innovative materials – new generation wires (high-temperature and using composite materials)”
Rosseti PJSC updated the schedule for creating a knowledge and competence management system:
- an integrated solution that enables communication and effective coordination of parties involved in the Company’s innovative development, which uses the existing knowledge accumulation, preservation, and dissemination solutions.
Development of the “Knowledge Management System of Rosseti Tyumen JSC” information system.
Technical requirements for conducting test flights and creating an unmanned aerial system within the program “Creating a UAV-based information and analysis system” were developed:
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The following works were completed:
- collection of data on the inspection of HVLs is carried out using UAVs;
- collection of information about accidents is carried out using UAVs.
Design works to create an information and analytical system using UAS:
- a system for monitoring the operational reliability indicators of the electric grid facilities of Rosseti Tyumen JSC using an unmanned aerial system (UAS);
- UAVs deployment to monitor remote grid facilities located in hard-to-reach Arctic regions where transport infrastructure is insufficient;
- condition-based HVL reliability indexing;
- prediction-based action scenarios devised to be included in emergency monitoring routines.
Pilot data communication project implemented pursuant to GOST 58651 as required by Annexes 1 and 2 to Order of the Ministry of Energy No. 102 dd. February 13, 2019. The project will enable exchange of extended datasets between Tyumen Regional Control Office (a branch of SO UPS JSC) and Rosseti Tyumen JSC.
Technical and organizational issues of the phased adoption of SK-11 were worked out, an implementation plan was prepared, purchasing of Astra Linux and SK-11 licenses was planned in order to conduct pilot testing and adoption of SK-11, a hardware and software package that functions as a control addon for the Company’s ASCS (keeping consolidated yearly and monthly repair schedules as well as to file supervisory requisitions).
AOHSIS, PAMS and SRSD integration. Automation of data communication between the systems.
Technical and organizational issues were worked out regarding its inclusion in the project “Implementation of the Automated Process Control System (APCS) Software and Hardware Package for Grid Control Center (GCC) based on SK-11 (including the integration of data from PAMS and automation of scheduling and requests for equipment withdrawal for repair)”.
Adoption of the GCC HSP, including a description of the Common Information Model (CIM):
- technical and organizational issues were worked out regarding the phased adoption of SK-11, an implementation plan was prepared and the purchase of licenses was planned for Astra Linux and SK-11.
“Single End-to-End System for real-time monitoring of electricity delivery to temporarily served facilities” (module 1 of the project “Creating a configuration of the single analytical platform capable of event prediction”) was adopted at all SDCs of Rosseti PJSC and applied on Rosseti’s territory of presence on the Single Voting Day 2021.
“Single End-to-End System for real-time monitoring of electricity delivery to temporarily served facilities” was registered as an intangible asset.
Adoption of the Single End-to-End System for real-time monitoring of electricity delivery to temporarily served facilities (the Knopka system) at SDCs of Rosseti PJSC.
As part of the implementation of the innovation management system, Rosseti Tyumen JSC organized a training webinar “Innovation management system in accordance with the requirements of GOST R 56273.1-2014/CEN/TS 16555-1:2013 and ISO 56002:2019 (GOST R ISO 56002-2020). Internal audits of the innovation management system”.
As part of the R&D activity, in 2021 the Company concluded three license agreements for the production and sale of products developed within R&D activities.
According to the agreed reports on the volume of sales of products for 2021, royalty payments in the amount of 772,256.5 rubles excluding VAT are expected.
2. Digital transformation
A common information model (CIM) of Rosseti Tyumen JSC (GCC) was developed
Project tasks are grouped with the projects:
- creating a single analytical platform capable of event prediction;
- creating a single geoinformation system.
Creating a dedicated control loop for technological systems at Rosseti Tyumen JSC.
Implementation of projects for introduction of digital substation elements:
- innovative equipment and technologies were tested and implemented (Rospan 110 kV substation, Batovo 110 kV substation, Chaprovskaya 110 kV substation put into operation;
- automated system “Occupational health and safety (AIS OHS) based on the “Production safety. Integrated security” software
Implementation of projects for introduction of digital substation elements:
- implementation of projects for adoption of digital substation elements (Bystrinskaya 110 kV SS, Nevskaya 110 kV SS, Fakel 110(220) kV SS, Bolshechernogorskaya 110 kV SS).
As part of the “Evolvement of Rosseti Tyumen JSC’s DPCSMS into a single vertically integrated system featuring workstations at branches’ supervisory centers by 2025” project implementation, Megionsky and Samotlor PDZs of Nizhnevartovsk Electric Grids were optimized.
Configuration of a digital platform to simplify supplier and contractor interactions involving the document automation subsystem integrated with the Company’s ERP systems and document automations.
The technical requirements for the computer vision-based HSP to monitor hazardous areas were developed.
Development of a VR and AR-based comprehensive staff training system.
Procurement of virtual and augmented reality equipment.
Configuration of the automated energy conservation and efficiency management system.
Development and adoption of a digital work management system.
3. Business diversification
The Roadmap for the development of additional (non-tariff) services of Rosseti Tyumen JSC was approved.
Reengineering of business processes for the development of additional services:
- a training program for internal personnel of Rosseti Tyumen JSC was developed.
Development of infrastructure to deliver electricity to remote areas in YNAO:
- construction of the Salekhard-Labytnangi-Kharp power bridge.
Participation in the Tyumen region city lighting projects with two pilot projects implemented:
- in Onokhinsk municipality; and
- in Chervishevsky municipality.
Adoption of a “digital” personnel technology (document automation system, the use of electronic assistants, a virtual environment for team interaction, employee inspection system).
Development of a corporate training center based on a simulator training center at the Nizhnevartovsk Electric Grids branch of Rosseti Tyumen JSC.
Development of the Turnkey Grid Connection service:
- the Tyumen Electric Grids branch of Rosseti Tyumen JSC and R.V. Gein IE concluded an agreement worth 34 million rubles for the construction of electric grids at the customer’s facility.
Development of the turnkey grid connection service.
As part of the development of a corporate training center at a personnel training center (“PTC”) in the Nizhnevartovsk Electric Grids as a corporate training center of Rosseti Tyumen JSC:
- 49 educational programs of Rosseti Tyumen JSC were developed and approved.
- Corporate Moodle-based learning management system is being introduced.
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Pursuant to the Order of Rosseti Tyumen JSC No. 247r dd. November 23, 2021 “On distance learning at Rosseti Tyumen JSC”:
- professionals from Noyabrsk, Nizhnevartovsk, Tyumen, Surgut Electric Grids, Energocomplex developed a training material for 10 educational programs of Rosseti Tyumen JSC;
- responsible experts, IT professionals form the Surgut Electric Grids, were appointed for the administration and maintenance of the Moodle learning management system for PTC-based training process;
- the training content from Rosseti Tyumen JSC training programs is being converted into the SCORM format for further transition to Moodle.
- An application has been formed for the procurement of essential hardware for the training process (servers, printers, projectors and laptops) to be included in the Rosseti Tyumen JSC 2022 investment program.
Development of services with a focus on entering new markets, including the implementation of strategic infrastructure projects in the Tyumen Region, KhMAO and YNAO: Surgut R&D Center, a high-priority regional project:
- cooperation and coordination agreement between Rosseti Tyumen JSC and the Yugra Science and Technology Development Foundation (the Project Operator);
The Program for the Development of the Electric Charging Infrastructure of Rosseti Tyumen JSC up to 2025 was developed and approved. The Roadmap for the promotion of electric vehicles in Rosseti Tyumen JSC was approved.
Development of electric charging infrastructure for electric vehicles
Development of infrastructure to deliver electricity to remote areas in YNAO:
- a draft cooperation and coordination agreement with the Federal State Budgetary Educational Institution of Higher Education “Ugra State University” to create an electric power infrastructure was prepared and approved, ensuring the development of the remote area of KhMAO-Yugra;
- the development area in terms of systems based on renewable energy sources (hybrid power-generating plants) was determined.
Involvement in the implementation of the project to create the first special economic zone (SEZ) in KhMAO-Yugra:
- an analysis of potential options for connecting to existing grids and building a power center for the SEZ Industrial site was performed;
- preliminary negotiations were held with the Yugra Development Fund;
- Rosseti Tyumen JSC offered to take part in the creation of engineering infrastructure on the planned SEZ territory.
Development of services with a focus on entering new markets, including the implementation of strategic infrastructure projects in the Tyumen Region, KhMAO and YNAO:
- a cooperation agreement with the Yugra Development Fund was made;
- a cooperation agreement with the Government of the Tyumen Region for ensuring reliable electricity delivery to customers in the Tyumen Region was made.
In terms of the development of microgrids, the following activities were performed:
- a license agreement with manufacturing companies for the production and implementation of the Minigrid was concluded;
- a cooperation agreement to implement the Minigrid HSP at the facilities of potential buyers (Rosneft, Aggreko Eurasia, and Gazpromneft) was concluded;
- a lease agreement to demonstrate the Minigrid HSP functioning to potential buyers with Moscow Power Engineering Institute was concluded.
4. Maintaining a set level of reliability and security of power supply
Module 2 “Subsystem for automated design and issuance of specifications based on GIS solutions” is planned within the "Creating a single analytical platform” project and Rosseti Tyumen JSC’s 2022 Investment Program.
Creating an intrusion detection and prevention system (IDS / IPS) for the Company’s needs.
Upgrading of the Company’s data transmission network:
- upgrading communication channels for the implementation of OTM functions (type “star” network topological scheme);
- upgrading of the backbone data transmission network (development of a ring backbone network);
- development of redundant data transmission channels at the branch level.
Pilot testing of the single automated workstation system devised for security officers devised at SDCs of Rosseti PJSC (“Rosseti Group”).
Development of a distributed automation system in 6-20 kV distribution grids of the Company:
- an implementation plan and design specifications were developed.
Development of a distributed automation system in 6-20 kV distribution grids of the Company.
A unified platform for Rosseti Group customer interaction, the Company’s segment:
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in terms of creating an integrated solution for business processes for customer services and interaction, the program and methods for preliminary testing was approved, integration was tested in the following streams:
- IF1. “Power Center” Integration Flow;
- IF2. "Applications for GC" Integration Flow;
- IF3. “Applications for GC” Integration Flow.
Configuring and creating an integrated solution for business processes for customer services and interaction as part of the development of a unified platform for Rosseti Group customer interaction, Rosseti Tyumen JSC segment.
Interaction with customers and ensuring information interaction
An audit of the Call Center was performed to transfer to a single call center of the Rosseti Group in the Company-served area.
The software used in PAMS is included exclusively in the Unified Register of Russian Software Programs for Electronic Computers and Databases.
As part of the “Creating (developing) a single geoinformation system of the Company” project:
- functionality to manage the process of eliminating emergencies (through tasks and crews) developed;
- automatic synchronization of power grid facilities from the PAMS to the Geoinformation System (GIS) is configured;
- display of heat points for CCU was implemented;
- the functioning of the Company’s single geoinformation system was tested and is adopted in order to monitor the process of security enforcement of the served facilities.
Development of a subsystem for visual control of the core and supporting processes as part of the development of the Company’s geoinformation system.
The comprehensive program to improve the anti-terrorist security of the Company’s facilities for the period 2022–2026 was updated, measures were taken to equip 9 facilities of the energy system with engineering and technical means of protection.
Implementation of the targeted Program to improve the anti-terrorist security of the Company’s facilities.
The information security program of the Rosseti Group aimed at ensuring the stable functioning of the information infrastructure of the Company’s grid facilities:
- a services and coordination agreement for monitoring and responding to computer attacks with the FSB of Russia National Coordinating Center for Computer Incidents and FOCL-VL Upravleniye LLC was concluded.
Development of the Information Security Program, regulations and methodological support of cybersecurity.
Implementation of measures to protect critical information infrastructure under the Federal Law No. 187-FZ dd. July 26, 2017.
VR and AR-based comprehensive staff training system:
- 6 technological maps were approved in accordance with the development plan for VR and AR simulators.
Creating a VR and AR-based comprehensive staff training system. Procurement of VR and AR equipment.
As part of the “Connection to the Center for Monitoring and Response to Computer Attacks of the Rosseti Group (Cybersecurity Center)” program, the Cybersecurity Center provided services for monitoring the information security of critical information infrastructure facilities in 2021.
The Company strongly focuses on the import substitution program, by addressing it with a set of measures that are implemented on an ongoing basis according to the Corporate Import Substitution Plan and that also help determine which imported equipment or technology could be substituted:
- the Electronic Document Management System (EDMS) project based on the Russian-made Documino platform was completed as part of the import substitution plan;
- an action plan was approved for the transition of the Company to the predominant use of Russian-made software for 2021–2024.
5. Ensuring further increase in operational and investment efficiency
Implementation of the Comprehensive Program for internal redistribution between branches, procurement of extra specialized equipment and vehicles and ceasing vehicle lease:
- 7 vehicles were purchased in 2021 to increase the reliability of the vehicle fleet
Implementation of the Comprehensive Program for internal redistribution between branches, procurement of extra specialized equipment and vehicles and ceasing vehicle lease:
In 2021, a set of activities was performed to increase cooperation with small and medium-sized businesses (SMEs) in procurement area.
The share of purchases from SMEs amounted to 87.98%, including 28.26% under procurement agreements limited to SMEs only.
Ensuring the SMEs share in the Company’s procurement.
Implementation and development of a smart electricity metering system (SEMS)
Under the IPR, the following projects were completed in 2021:
- projects for the development of commercial electricity metering (30 points of commercial meters and 5,668 metering devices installed), for the development of technical metering (509 metering devices installed);
- projects for installing metering devices in accordance with the Federal Law No. 522-FZ dd. December 27, 2018 in the amount of 2,941 pcs. worth 181 million rubles.
- An effect of 34.8 million kWh was achieved worth 82.9 million rubles.
Fulfilling obligations under Federal Law No. 522-FZ dd. December 27, 2018 in accordance with the Program for the Development of Smart Electricity Metering in the Retail Electricity Market in the Company’s Grids for 2020–2030; development of commercial metering.
Reducing electricity losses due to a set of measures implemented in 2021-2025 under the Loss Reduction Program, including those implemented under the Smart Electricity Metering Development Program, with an outlook until 2025 as follows:
- to 2.25% of electricity released to the grid in 0.4-110 kV grids;
- to 9.96% of loss-inducing electricity released to the grid in 0.4-20 kV grids;
Implementation of the Electricity Loss Reduction Program in the Company’s Electric Grids for 2021 and up to 2025.
The Analytical Credit Rating Agency (ACRA) assigned Rosseti Tyumen JSC a credit rating of AA+(RU), with the outlook “stable”,for the first time ever, which is one level higher than the credit rating previously assigned by the rating agency Expert RA JSC on a comparable rating scale.
Maintaining the Company’s credit ratings at the sovereign level from at least one rating agency.
The actual value of the payment level for 2021 amounted to 100% of the target value.
Implementation of a mobile solution for inspectors.
Configuring an automated design system for digital objects, developing a digital equipment model (under the Company’s Digital Transformation Program for 2020–2030).
The Company’s Investment Program approved by Order of the Ministry of Energy of Russia No. 29@ dd. December 22, 2021 was developed with regards to the following:
- ranking and prioritization of activities in accordance with the scenarios approved by Rosseti PJSC;
- achieving maximum efficiency while ensuring the required level of reliability;
- excluding unnecessary technical solutions;
- update the deadlines under connection agreements in light of the loading plans and the deadlines for applicants’ facilities.
Increasing the accuracy and efficiency of projection of connections, optimization of capacity utilization:
- the procedure for determining the capacity reserve of power centers was updated, providing for an increased efficiency of power centers utilization.
Cooperation with major suppliers and manufacturers under integrated projects and procurements, which derives economic benefits from competitive advantage:
- technical requirements and a list of procured goods for the core electrical equipment were prepared;
- a draft supply agreement was prepared to support procurement procedures in 2022 for concluding long-term supply agreements at unit prices.
6. Increasing the grid service market share
Consolidation of grid assets:
- cooperation with the Government of KhMAO-Yugra;
- service companies planned to be sold in a single lot with YuRESK JSC were reorganized.
Consolidation of grid assets in Rosseti Tyumen JSC-served territory.
Acquisition of grid assets in the Tyumen Region, KhMAO-Yugra, YNAO:
- purchase of grid assets amounting to 444.7 c.u. in the Tyumen region and YaNAO (an increase in the market share by 0.02%).
7. HR development
Headcount optimization by the implementing measures under the “Digital Transformation 2030” Concept, the Concept for the Development of the System of Operational and Technological Management and the System of Situational Management in the Electric Grid Complex.
Orders of the Noyabrsk Electric Grids No. 771 dd. December 3, 2020 and Nizhnevartovsk Electric Grids No. 396 dd. October 21, 2021 On Amendments to the Staff Schedule of the Branch were signed, with the following effects achieved: a decrease in the headcount by 9 employees; reduction in labor and insurance costs by 18.2 million rubles.
Adoption of a “digital” personnel technology (document automation system, the use of electronic assistants, a virtual environment for team interaction, employee inspection system).
Centralization of management and support functions, including improvement of the organizational structures of branches, streamlining the functionality distribution, implementation of standard structures of functions and the model PZD standard, and reduction of management levels.
Headcount optimization by the implementing measures under the “Digital Transformation 2030” Concept, the Concept for the Development of the System of Operational and Technological Management and the System of Situational Management in the Electric Grid Complex.
The measures to reduce the headcount of on-site workers resulted in cost reduction by 26.5 million rubles.
Centralization of management and support functions, including improvement of the organizational structures of branches, streamlining the functionality distribution, implementation of standard structures of functions and the model PZD standard, and reduction of management levels.
Development and implementation of programs to provide the Company with qualified personnel (including those with “digital” competencies):
- a list of mandatory training according to position at Rosseti Tyumen JSC was developed;
- the Company’s training system was assessed and the level of satisfaction with the quality of training in the Company was determined;
- the Company’s Regulations on the training activities were developed.
Reducing the share of on-site workers
Development of managerial and youth employee pool and a HiPo employee pool. Development of an external candidate pool (including a corporate bank of CVs). Development of mentoring and coaching.
Development of managerial and youth candidate pool and a HiPo candidate pool.
Development of an external candidate pool (including a corporate bank of CVs). Development of mentoring and coaching.
Cooperation with general, higher and vocational education institutions located in the territory of the Company’s operations. Implementation of joint career guidance projects, practice-oriented training of young specialists and advanced training of employees in accordance with the current and future needs of the grid facilities.
Cooperation with general, higher and vocational education institutions located in the territory of the Company’s operations.
Implementation of joint career guidance projects, practice-oriented training of young specialists and advanced training of employees in accordance with the current and future needs of the grid facilities.
Students’ on-site training, team activities, internship programs’ implementation.
Interaction with students in terms of their on-site training, team activities, internship programs.
The HR Policy is aimed at boosting the intellectual, professional and managerial potential of employees in order to implement the Company’s strategic priorities and the “Digital Transformation 2030” concept:
- more than 50 educational activities were carried out aimed at developing the professional and corporate competencies of managers and professionals in the development and services area.
Contribution to the UN Sustainable Development Goals
Priorities in the field of sustainable development
Ensuring the reliability and quality of power supply
Value – WE ENSURE reliable and high-quality power supply.
Value – WE PROVIDE affordable grid connection services.
Activities performed in 2021:
- reconstruction and construction projects were implemented for substations and power grids in various regions of the country;
- maintenance and repair programs were implemented;
- planned volumes of the Program for the updating of grid facilities were met by all subsidiaries and affiliates;
- response to every risk-bearing situation was ensured;
- ensuring accessibility of grid infrastructure at a set level of reliability and quality of power supply;
- ensuring security of information infrastructure facilities;
- import substitution of foreign software products.
Results in 2021:
- Uniform down-top tariff rates for H1 2021 do not exceed the rates for H2 2020; 10.3% higher rates were approved for H2 2021;
- in the reporting period, the grid connection fee rate per unit of connected capacity for the “last mile” activities under completed contracts amounted to 15,426 rubles / kW, with 9,816 rubles / kW in 2020, and 7,569 rubles / kW in 2019;
- the total volume of the maintenance and repair program implementation amounted to more than 4 billion rubles; 224 power transformers and transformer substations (CTSS, PTSS, DTSS), 2,566.4 km of power transmission lines with 0.4+ kV voltage were repaired, 58.4 km of ground wire were replaced;
- facilities for electricity delivery to oil and gas fields located in KhMAO-Yugra and YNAO were put into operation. Some of them were built by the Company at a record-breaking pace. The total investment of power engineering companies in the economy of the regions amounted to about 8.5 billion rubles.
Revenue structure, million rubles
KPIs:
- effectiveness of innovation;
- compliance with the commissioning schedule;
- winter preparedness;
- no accidents at work.
Ensuring resilience to changes in the electricity market
Value – WE DEVELOP new services.
Activities performed in 2021:
- reengineering of business processes for the development of additional services;
- participation in lighting projects for cities/towns;
- development of the turnkey grid connection service;
- development of a corporate training center;
- the Company’s Program for the Development of the Electric Charging Infrastructure up to 2025 was developed;
- involvement in the implementation of the project to create the first special economic zone (SEZ) in KhMAO-Yugra;
- a license agreement with manufacturing companies for the production and implementation of the Minigrid was signed;
Results in 2021:
- the increase in revenue from additional (non-tariff) services of the Company in 2021 compared to 2020 amounted to 24.4% or 353.420 million rubles
- net profit – 93.47 million rubles;
- profitability of additional (non-tariff) services: 10.05%;
- 5 contracts for lightning cities / settlements for the amount of 9.3 million rubles inclusive of VAT were concluded;
- the Tyumen Electric Grids branch of Rosseti Tyumen JSC and R.V. Gein IE concluded an agreement worth 34 million rubles for the construction of electric grids at the customer’s facility.
KPIs:
- Total shareholder return;
- Labor productivity improvement.
Improving energy efficiency, protecting the environment, and combating climate change
Value - WE PROTECT ecosystems
Activities performed in 2021:
- implementation of the environmental policy for the electric grid complex;
- conservation of biodiversity, including the implementation of measures to prevent the decline in the number of birds;
- continuous improvement of the environmental management system in order to improve the environmental performance;
- reducing the consumption of fuel and energy resources for production and economic needs.
Results in 2021:
- the volume of pollutant emissions into the atmospheric air generated by the Company was generally at the level of 2020 (28.476 tons) and amounted to 28.594 tons, 27.626 tons in 2019;
- the volume of groundwater produced in 2021 amounted to 20.45 thousand m3, which is 15% less than the 2020 value (24.15 thousand m3) and 25% less than the 2019 value (27.3 thousand m3).
- waste generation trends: 2019 – 4,999 tons; 2020 – 4,434 tons, 2021 – 3,050 tons;
- waste transferred for recycling and neutralization: 1,514 tons – 2020 – 3,159 tons, 2019 – 2,926 tons;
- environmental protection costs: 2019 – 46,328 thousand rubles, 2020 – 44,510 thousand rubles, 2021 – 43,210 thousand rubles;
- environmental impact fee: 2019 – 540.59 thousand rubles, 2020 – 298.21 thousand rubles, 2021 – 322.07 thousand rubles;
- equipping power grid facilities with bird protection devices (BPD), pieces: 2021 – 3,740, 2020 – 5,765, 2019 – 5,680;
- equipment with smart metering devices: 70.58% of the total volume, equipment with LED lamps: 85.08% of the total volume;
- the cost of implementing the Energy Saving and Energy Efficiency Improvement Program in 2021 – 248.52 million rubles, VAT exclusive.
KPIs:
- electricity loss rate.
Increasing investment appeal, reinforcing the brand image, improving stakeholder engagement
Value – WE INVEST in the regional economy.
Activities performed in 2021:
- reengineering of technological and business processes of the Company;
- development of services to enter new markets;
- reliable, uninterrupted and high-quality operation of the power system;
- high-quality service, transparency and availability of information;
- meeting the needs in the Company’s services;
- meeting the demand for electricity and capacity;
- paying taxes;
- creating new jobs.
Results in 2021:
- the validity of the certificate of the Company’s energy management system that meets the requirements of the International Standard ISO 50001:2018 has been extended;
- taxes paid, including to:
- KhMAO-Yugra – 2,087,264,343.86 rubles;
- YaNAO – 1,051,637,250.83 rubles;
- the Tyumen region – 735,707,189.70 rubles;
- 100% of competitive procurements were made using e-commerce tools (electronic trading platforms);
- annual volume of procurement from SMEs: 87.98% of the total procurement in 2021, including 28.26% of procurements under contracts limited to SMEs only;
- 359 press releases on the Company’s production activities were published on the Company’s corporate website www.te.ru , 363 posts were made on the Company’s social media accounts, with 185 posts on the Telegram channel; the Company had 10.4 thousand mentions in mass media.
KPI:
- Return on invested capital;
- electricity loss rate;
- timely grid connection.
Development of scientific and innovative potential of the Company and industry, comprehensive introduction of new digital technologies
Value – WE CREATE digital power grids.
Activities performed in 2021:
- increasing the efficiency of technological management of grid assets;
- developing and adopting promising innovative and digital technologies;
- reengineering of technological and business processes of the Company.
Results in 2021:
- an integral performance indicator of the innovative activity assesses compliance of three composite indicators: R&D costs, procurement of innovative products, quality of development (updating) of Front End Engineering Design (FEED) activity / implementation of FEED activity
- two intellectual property documents secured:
- invention patent No. 2744035 Device for detecting a damaged section of an OL with branches of 6-35 kV distribution grids dd. March 02, 2021;
- certificate of state registration of the database No. 2021620637 dd. April 05, 2021 Database containing data representing the required frequency of OL route clearing from tree and shrubbery vegetation in the Tyumen region, the Khanty-Mansi Autonomous Okrug – Yugra, the Yamalo-Nenets Autonomous Okrug;
- adoption of innovations: 326.88 million rubles, 2020 – 527.49 million rubles, 2019 – 458.55 million rubles;
- R&D completion: 21.77 million rubles exclusive of VAT, 2020 – 28.84 million rubles, 2019 – 30.54 million rubles.
KPIs:
- Reduction in per-unit operating costs;
- Labor productivity improvement;
- Effectiveness of innovation.
HR and corporate culture development and compliance with industrial safety standards
Value - WE OFFER HR development.
Activities performed in 2021:
- Implementation of the first stage of the project for creating the VR and AR-based comprehensive staff training system;
- implementation of a distance learning Moodle-based system;
- creating an integrated solution for business processes for customer services and interaction with SDCs as part of the development of a Unified Integrated Platform for Rosseti Group customer interaction, Rosseti Tyumen JSC segment.
- launching the configuration of a digital platform to simplify supplier and contractor interactions involving the document automation subsystem integrated with the Company’s ERP systems and document automations.
- improvement of the organizational and functional structure;
- optimizing work schedule and increasing the workload of the staff;
- automation of business processes.
Results in 2021:
- the Company’s production staffing rate amounts to 97%;
- active turnover in 2021 amounts to 6%;
- 7,138 employees were trained in important areas of training, amounting to 96%;
- 6,398 employees were vaccinated, amounting to 85.3% of the headcount;
- average collective immunity in the Company amounted to 80%;
- 5,638 COVID-19 tests were made during the year;
- on average, 17% of the headcount worked remotely;
- the average salary increased by 3.2% or 109.9 thousand rubles per month compared to 2020;
- OHS costs amounted to 295,478.598 thousand rubles, in 2020 – 292,962.662 thousand rubles, in 2019 – 279,931.815 thousand rubles;
- fires – 3, in 2020 – 4, in 2019 – 1;
- zero cases of work-related diseases.
KPIs:
- improvement of labor productivity up to 5.00%;
- launching of a distance learning system;
- injury prevention activities, improved occupational health and safety level
Key Risks
Rosseti Tyumen JSC has approved a Functional Risks Register (“the FR”) in order to evaluate the impact of risks on the Company’s KPIs; the significance of these risks is to be revaluated on an annual basis.
Risks are expert-assessed. Risk assessment assigns the class of significance according to the trilevel classification presented in the Risk Management Regulations: moderate, significant, critical.
Critical level risks are unacceptable and subject to priority management.
Significant risks are not critical but have substantial impact on the Company’s businesses and are therefore subject to management.
Moderate risks may slightly affect the Company’s businesses but are still subject to monitoring.
Map of Rosseti Tyumen JSC’s key risks in 2021
* Risk FR 12-04 “Involvement of the Company / employees of the Company in corrupt practices” is assessed “critical” due to the unacceptability of corruption in any form or manifestation in the Company (“zero corruption tolerance” principle) and the need to take priority measures to manage this risk, while the level of risk probability is assessed as low.
The Company’s activity is associated with the following risks
Risk Name
Affected KPIs
Applicable management
FR 01-01
A drop in electric power transmission to customers connected to regional distribution grids
EBITDA targets might not be reached
1. Monitoring and projecting electricity consumption with breakdown by voltage level and consumer categories; monitoring the physical parameters of electricity and capacity balance; improving the accuracy and reliability of electricity and capacity demand projections.
2. Establishing judicial practices to resolve disputes on the quantification of electric power transmission and/or losses.
3. Periodic audits of local subdivisions with respect to the sales of services and the reduction in electricity losses.
4. Monitoring electricity losses and prices
2. Establishing judicial practices to resolve disputes on the quantification of electric power transmission and/or losses.
3. Periodic audits of local subdivisions with respect to the sales of services and the reduction in electricity losses.
4. Monitoring electricity losses and prices
FR 01-02
Structural change in the rendered electric power transmission services with respect to voltages, tariffs, and customer groups
EBITDA targets might not be reached
1. Monitoring and projecting electricity consumption with breakdown by voltage level and consumer categories; monitoring the physical parameters of electricity and capacity balance; improving the accuracy and reliability of electricity and capacity demand projections.
2. Monitoring the consumption data that last-resort suppliers (electricity providers) use to calculate the electric power transmission fees.
2. Monitoring the consumption data that last-resort suppliers (electricity providers) use to calculate the electric power transmission fees.
FR 01-03
Increase in the price of electricity purchased to compensate for losses
EBITDA targets might not be reached
1. Implementation of energy conservation and efficiency programs including programs to reduce electricity losses and enhance metering systems in the long term.
2. Wide-scale adoption of smart metering, automated meter readings collection and processing systems to draw balance sheets of electricity, capacity, and electric power transmission quantifications
2. Wide-scale adoption of smart metering, automated meter readings collection and processing systems to draw balance sheets of electricity, capacity, and electric power transmission quantifications
FR 01-04
Increase in electric power transmission charges of third-party grid operators
EBITDA targets might not be reached
Taking measures to ensure that the market actors (customers, local grid operators, single-customer providers and the customers they serve) comply with regulatory decisions
FR 01-06
TRR fines for non-completion of the Investment Program
EBITDA targets might not be reached
Timely preparation and submission to the Ministry of Energy of Russia of materials for the approval of the draft investment program of the Company in accordance with the applicable legislation.
Phased monitoring of the construction schedule to ensure the timely development of investment program facilities
Phased monitoring of the construction schedule to ensure the timely development of investment program facilities
FR 02-01
Investment Program funding increased in general and/or on specific items against the specified limits
Consolidated net debt / EBITDA target might not be reached
1. Planning the costs of investment projects when drafting the Company’s investment programs.
2. Monitoring the cost and timing of investment projects.
3. Annual monitoring of per-unit costs of investment projects as part of benchmarking and comparative analysis of per-unit construction costs per unit of physical parameters.
4. Non-excess of the approved Investment Program funding
2. Monitoring the cost and timing of investment projects.
3. Annual monitoring of per-unit costs of investment projects as part of benchmarking and comparative analysis of per-unit construction costs per unit of physical parameters.
4. Non-excess of the approved Investment Program funding
FR 03-01
Contractors’ failure to pay for electric power transmission in time and/or in full
Electricity receivables targets might not be reached
1. Filing claims to reduce the receivables; monitoring the timeliness of handling claims.
2. Monitoring the enforcement of debt restructuring agreements
2. Monitoring the enforcement of debt restructuring agreements
FR 03-03
Disputes on the quantification and pricing of rendered services, including disputes on identified unmetered consumption cases
Electricity receivables targets might not be reached
1. Resolution of disputes with respect to amounts outstanding under electric power transmission contracts and/or electricity purchase contracts for loss compensation; prevention of further disputes.
2. Adherence to the Schedule of Handling Electric Power Transmission Arrears and Dispute Resolution; monitoring the collection of electricity fees for consistency with planned figures.
3. Raiding to detect unmetered electricity consumption. Such raids could be scheduled for weekends and involve law enforcement agents; there could also be ‘cross raids’ jointly taken by local subdivisions.
4. Partial and/or complete disconnection of customers-obligors as requested by electricity providers; monitoring the defaulting customers’ compliance with restrictions
2. Adherence to the Schedule of Handling Electric Power Transmission Arrears and Dispute Resolution; monitoring the collection of electricity fees for consistency with planned figures.
3. Raiding to detect unmetered electricity consumption. Such raids could be scheduled for weekends and involve law enforcement agents; there could also be ‘cross raids’ jointly taken by local subdivisions.
4. Partial and/or complete disconnection of customers-obligors as requested by electricity providers; monitoring the defaulting customers’ compliance with restrictions
FR 07-01
Untimely engineering, delivery, construction, and commissioning of facilities on part of contractors
Compliance with the commissioning schedule, %
1. Timely initiation of claims against contractors that default on their agreement terms and conditions.
2. Filing claims against contractors that default on their agreement terms and conditions.
3. Use of counterparty liabilities’ enforcement tools.
2. Filing claims against contractors that default on their agreement terms and conditions.
3. Use of counterparty liabilities’ enforcement tools.
FR 07-02
Impossibility of obtaining construction permits in time
Compliance with the commissioning schedule, %
Timely drafting of initial permit applications, engineering and design documentation
FR 07-03
Failure to report disconnection, or a delayed connection of a facility except when caused by the repair of other facilities of the Company
Compliance with the commissioning schedule, %
1. Phased monitoring of the construction schedule
2. Timely completion of activities planned under the Priority Investment Project Schedule (the Extended Grid Schedule) as set forth in Section 6.1 of Datasheets of the projects
2. Timely completion of activities planned under the Priority Investment Project Schedule (the Extended Grid Schedule) as set forth in Section 6.1 of Datasheets of the projects
FR-08-05
Operating personnel errors during switching
Operational activities
1. Measures development, and control over the implementation of the measures of the Program of measures for the prevention of erroneous and incorrect actions of personnel that can lead to an accident, based on an analysis of cases of industrial injuries and technological violations (accidents), and its updates (if necessary) approved by officials of Rosseti Tyumen JSC.
2. Implementation of the Rosseti Tyumen JSC’s Program (schedule) for equipping the branches of the Company with training simulators for performing operational switching and to develop the skills of operational and repair personnel.
2. Implementation of the Rosseti Tyumen JSC’s Program (schedule) for equipping the branches of the Company with training simulators for performing operational switching and to develop the skills of operational and repair personnel.
FR 09-01
Occupational risks
Zero increase in accident-related casualties at the subsidiaries
1. Systematic advanced training and retraining of personnel; practical training of safety methods and skills.
2. CCTV recording of works at power plants in accordance with the developed and approved CCTV Implementation Program.
3. The Company’s Occupational Safety Committee should audit the compliance with the effective Occupational Health and Safety Management System (OHSMS) and the Internal Technical Control System (ITCS) in order to apply appropriate sanctions against officers failing to comply.
4. Completion of the Comprehensive Staff Injury Risk Reduction Program (with a focus on the safety of power plant operations). Better system for safer scheduled maintenance and emergency work at power plants.
2. CCTV recording of works at power plants in accordance with the developed and approved CCTV Implementation Program.
3. The Company’s Occupational Safety Committee should audit the compliance with the effective Occupational Health and Safety Management System (OHSMS) and the Internal Technical Control System (ITCS) in order to apply appropriate sanctions against officers failing to comply.
4. Completion of the Comprehensive Staff Injury Risk Reduction Program (with a focus on the safety of power plant operations). Better system for safer scheduled maintenance and emergency work at power plants.
FR 11-03
Works inconsistent with the design documentation or estimates; low quality of equipment and materials, etc.
Reduction in per-unit investment costs
1. Quality control of incoming materials and equipment.
2. Construction procurements to be performed only after approving the design documentation
2. Construction procurements to be performed only after approving the design documentation
FR 12-04
Involvement of the Company / employees of the Company in corrupt practices
Compliance with laws, including anti-corruption and antitrust laws
Implementation of the Company’s Anti-Corruption Plan 2021
Russia, Tyumen Region,
Khanty-Mansiysk
Autonomous Okrug
- Yugra, Surgut
8 800 220 0 220
8 800 200 55 03
www.te.ru
Khanty-Mansiysk
Autonomous Okrug
- Yugra, Surgut
8 800 220 0 220
8 800 200 55 03
www.te.ru