ENERGY EFFICIENCY AND RESOURCE CONSERVATION

Energy Conservation and Energy Efficiency Improvement Program (ECEEIP)

Inter RAO Group is constantly optimizing business processes to manage energy conservation and improve energy efficiency at all its Russian and foreign generating assets.

Projects to improve energy efficiency are highly innovative and based on the best world practices. In addition to its own research and development, the Company also collaborates with Russian and foreign industry leaders.

The Energy Conservation and Energy Efficiency Improvement Program (ECEEIP) for 2019-2023, one of the Group’s targeted programs, was drafted to achieve the goals within the Energy Management System. The Commission on Energy Conservation and Energy Efficiency Improvement of the Company and its subsidiaries is involved in the process of establishing the program and reporting on its implementation.

Measures to enhance the energy efficiency of production and reduce specific fuel consumption as well as the introduction of new highly efficient equipment and the decommissioning of obsolete equipment are the main tools that Inter RAO uses to reduce the volume and intensity of greenhouse gas emissions. The measures of the ECEEIP are divided into two blocks:

  • Measures with a ‘direct’ energy effect, which account for more than 80% of the total economic effect from the implementation of measures. These measures must be economically justified, and their economic efficiency must be calculated in accordance with the Methodology for Assessing the Economic Efficiency of Investment Projects in the Form of Capital Investments.
  • Measures with a ‘concomitant’ energy effect.

In 2019, the following key measures were implemented to improve energy efficiency:

  • Modernization of the vacuum system in the turbine of Steam Station No. 10 at the Verkhnetagilskaya TPP with the replacement of the ejector
  • Upgrading of the turbine vacuum system with a ball cleaning system in Power Unit No. 3 at the Iriklinskaya TPP and the modernization of the TGMP-114 steam boiler of Power Unit No. 3
  • Introduction of a variable frequency drive for the gas recirculation fans of Unit No. 2 at the Nizhnevartovskaya TPP
  • Retooling of the water treatment plant with the introduction of a reverse osmosis plant at Ufimskaya CHPP3
  • Installation of a ball cleaning system for the condenser of Station No. 8 at Ufimskaya CHPP4
  • Installation of variable frequency drives at the Salavatskaya CHPP

Strategic objectives to enhance the efficiency of generating facilities:

  • Implementing the main provisions of the Energy Strategy of Russia and the State Energy Efficiency and Energy Development Program
  • Achieving the goals enshrined in the Inter RAO Strategy
  • Achieving the targets for energy conservation and energy efficiency envisaged by the Inter RAO Innovative Development Program
  • Ensuring the sustainable use of energy resources through the implementation of measures to conserve energy and improve energy efficiency
  • Improving energy efficiency indicators of both individual energy-intensive production assets and the Group as a whole while minimizing operation and development costs
  • Creating and improving a holistic and effective system to manage energy conservation and energy efficiency (development of an energy management system)
  • Mitigating the Company’s negative environmental impact

Results of ECEEIP program measures [GRI 302-1, 302-4]

In 2019, the implementation of the ECEEIP at Inter RAO resulted in the following savings:

  • Equivalent fuel – 46,877,000 tons
  • Thermal power – 39,002,000 Gcal
  • Electric power – 3.699 bln kWh
  • Water – 19.69 bln m3

The economic effect from the implementation of the ECEEIP measures in 2019 amounted to RUB 224 mln, while expenses on implementing ECEEIP measures totaled RUB 4.044 bln, taking into account the commissioning of new capacities.

These results were achieved through ECEEIP measures that led to the following results:

  • The fuel heat utilization factor (FHUF) increased by 0.06 p.p. to 49.54%
  • Specific excess fuel consumption was reduced to 1.5 g/kWh
  • Specific fuel consumption of electricity was slashed by 0.31 g/kWh to 295.22 g/kWh
Energy intensity indicators [GRI 302-3]
Measurement unit 2017 2018 2019 Change vs. 2018
Specific fuel consumption for electric power output g of fuel equivalent/kWh 303.14 296.99 295.22 -0.6%
Specific fuel consumption for thermal power output kg/Gcal 143.90 144.36 144.79 0.3%
FHUF % 48.35 49.49 49.5 0.0%
Specific overconsumption (overburning) of fuel equivalent g/kWh 1.75 1.935 1.5 -22.5%
Total relative heat losses during transmission via heat networks % 17.05 18.61 18.31 -1.6%
Relative electricity costs for the transmission of heat via heat networks kWh/Gcal 6.51 6.125 6.49 6.0%
Volume of energy consumed for internal needs [GRI 302-1]
Type of fuel/energy Measurement unit Total fuel consumption in physical terms
2017 2018 2019
Volume of energy consumed for internal needs mln kWh 5,751 5,646 5,498
TJ 20,704 20,327 19,792
for electricity mln kWh 4,708 4,509 4,459
TJ 16,949 16,233 16,054
for heat mln kWh 1,043 1,137 1,038
TJ 3,755 4,094 3,738
Purchased electric power mln kWh 441 403 399
TJ 1,588 1,451 1,437
Purchased thermal power Gcal 39 45 41
TJ 0,16 0,19 0,17
Energy savings [GRI 302-4]
Types of energy saved Measurement unit 2017 2018 2019 Change vs. 2018, %
Total reduction in fuel and energy consumption that was achieved as a direct result of energy conservation and energy efficiency initiatives
Fuel thousand tons of fuel equivalent 134.8 105.7 46.9 -56%
TJ 3,951 3,098 1,374
Electricity mln kWh 14.2 15.1 3.7 -76%
TJ 51.0 54.2 13.3
Heat thousand Gcal 22.4 7.5 39.0 423%
TJ 93.9 31.2 163.2
Water mln m3 0.0 4.7 19.7 317%

Fuel consumption [GRI 302-1]

Natural gas and coal are the main non-renewable energy sources for the thermal power plants of Inter RAO’s generating assets. The share of coal in the energy balance has been steadily decreasing and edged down to 19.1% in 2019 from 20.1% in 2018. In 2020, another additional factor that will reduce coal consumption will be the sale of the coal-fired Ekibastuzskaya TPP2 with installed capacity of 1,000 MW in December 2019.

Total fuel consumption in physical termsTaking into account fuel consumption at Ekibastuzskaya TPP-2 for the full years 2017-2019. The operational results of JSC Ekibastuzskaya TPP-2 are not included in the Group’s financial results due to the reclassification in December 2016 of a 50% stake in JSC Ekibastuzskaya TPP-2 as assets classified as held for sale. The data for 2019 does not include the consumption of 19 mln  m3 of natural gas during the testing of the GTD- 110 M gas turbine engine at I vanovskiye CCGT.
Type of fuel/energy 2017 2018 2019 Change, %
Total gas, mln m3 29,448 29,593 29,375 -0.7%
natural 25,811 25,878 25,761 -0.4%
associated 3,620 3,664 3,564 -2.7%
Industrial enterprises 17 51 50 -0.3%
Coal, thousand tons 15,875 15,188 14,244 -6.2%
bituminous 5,621 8,848 8,085 -8.7%
brown 10,254 6,340 6,159 -2.8%
Oil fuel, thousand tons 155 78 88 13.7%
heating oil 153 77 87 13.7%
diesel fuel 2 1 1 12.9%
Fuel balance structure of Inter RAO in 2019, thousand tons of fuel equivalent
Fuel balance structure of Inter RAO in 2019, thousandtonsof fuel equivalent
Fuel balance structure of Inter RAO in 2019
TJ
Fuel balance structure of Inter RAO in 2019 TJ