Place of the Company in the market
PJSC IDGC of the North-West operates in the territory of 7 constituent entities of the Russian Federation in the North-Western region and is the largest grid company in the regions where it operates.
The Company’s main activity is the transmission of electricity. Pursuant to the decision of the Federal Tariff Service of the Russian Federation (Order No.191-E as of June 03, 2008), PJSC IDGC of the North-West is included in the register of natural monopolies carrying out the activities of electricity transmission under No. 47.1.116.
The Company’s share in the electric energy transmission market, in general for the service area, is about 76%, including the volume of electricity transmitted through the grids of local grid operators — payment recipients.
The presence of currently operating local grid operators poses no significant risk for the Company. Most of the electricity delivered to consumers through distribution grids of other network organisations is also transmitted through PJSC IDGC of the North-West’s high and medium voltage grids. The market share controlled by the Company has not changed considerably for the last 5 years.
As of year-end 2015, the volume of electricity transmitted was 36,955 million kWh, which is much less than the figures in previous periods. As compared to 2011, the decline was more than 8%. One of the reasons for the decline was the execution of direct contracts between consumers and PJSC FGC UES in relation to all points of connection to the UNPG (the ’last mile’). The total decline in the volume of electricity transmitted by PJSC IDGC of the North-West through ’last mile facilities’ by 2015 was 2,242 million kWh, including by branches:
- Arkhenergo — 237 million kWh,
- Vologdaenergo — 1 418 million kWh,
- Karelenergo — 290 million kWh,
- Komienergo — 226 million kWh.
In addition, the volume of electricity transmitted is affected by change in the electricity consumption by large consumers in the region. In 2015, transmission of electricity from the Karelenergo grids to the consumer JSC NAS SUAL was ceased due to the repurchase of the Ondskaya HPP by SUAL. Decline in consumption by JSC NAS SUAL in 2015 as compared to 2011 was 1,318 million kWh. Decline in electricity transmission in 2015 as compared to 2014 was also attributed to the cancellation of consumption by JSC NAS SUAL in the amount of 224 million kWh.
The share of electric energy supplied to the grid of local grid operators in 2015 was 19.5% of the the total volume of electricity transmitted by PJSC IDGC of the North-West.
There are a number of local grid operators which render grid connection services in regions where PJSC IDGC of the North-West operates. These companies are the main competitors of PJSC IDGC of the North-West in terms of grid connection services.
Based on expert assessments of the Company’s management, the share of PJSC IDGC of the North-West in the grid connection market in the Northwestern Federal District varies subject to the region and the voltage level in grids to be connected to.
For all regions included in the area of responsibility of PJSC IDGC of the North-West as regard to the voltage level of 35 kV and more the Company’s market share is close to 100%. As for voltages of 0.4 kV to 20 kV, the market share varies from 100% at Pskovenergo to 3% at Kolenergo. In other branches, the market share at this voltage level is as follows: in Karelenergo branch — 80%, in Komienergo branch — 80%, in Arkhenergo branch — 70%, in Novgorodenergo branch — 62%, in Vologdaenergo branch — about 58%.
Such difference by regions is related to the established ownership of grids of each level of voltage. There are almost no 0.4 and 10 kV grids on the balance sheet of Kolenergo, therefore, this branch has made very few grid connections at this voltage level. At the same time, in Pskov Oblast, Pskovenergo branch owns most part of grids at this voltage level.
|Period||0.4 kV||not less than 35 kV|
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