Dear shareholders,
Last year, the domestic economy began reviving after the global financial crisis and
the business activity recovery was marked both in Russia and abroad. The year became
especially significant for the Russian electric energy industry, full of important
events and key decisions of the state and investors, some outcomes whereof may be
estimated nowadays already. The Russian Federation Government adopted the basic
decisions in regard to the parameters of the long-term market capacity; Power Purchase
Agreements (PPA) were executed.
The positive changes in the economic life have impacted the results of the JSC TGC-1
business activity as well, which, by some parameters, have surpassed our expectations.
The Company has demonstrated once again its ability to effectively exploit the advantage
of a unique combination of heat and hydroelectric generating facilities. The increase
in the combined generation share in the total volume of production has become the
dominant factor for the year results.
With a view to successful achievement of the primary objective of execution of the largescale
investment programme, we increased the volume of its financing by committing
to reconstruction and modernisation over RUR18bn, which is more than the planned
amount.
Thereby, last year two new hydroelectric units were put into operation at Vuoksinskie HPPs Cascade in the Leningrad Oblast, construction of the first
combined cycle gas turbine unit in TGC-1 was completed at Pervomayskaya CHPP, and the main works on the 450MW CCGT-unit of Yuzhnaya CHPP were
finished. Upon the commissioning of the 450MW CCGT-unit of Yuzhnaya CHPP in April 2010, this CHPP has again become the most powerful station
of TGC-1 and the largest in the North-West of Russia.
The advanced technologies and high-efficiency equipment with the principally new degree of reliability are used in the course of our investment
projects implementation. It provides acquiring of the substantial saving of energy resources and environmental impact decreasing to
the minimum.
Furthermore, a number of key decisions in regard to financing of the projects were adopted. Foundation of SPV with Leader Asset Management gave
a new impetus to the implementation of the project of CCGT-unit construction at Pravoberezhnaya CHPP.
The establishment of an affiliate JSC St. Petersburg Heating Grid, which took place last year, acted to raise reliability and heating grid infrastructure
development of Northern Capital.
The decisions on the Company’s participation in the construction of a heating main from Apatitskaya CHPP to Kirovsk were also taken. The project
provides for transition of the urban heat supply system to heat energy consumption from Apatitskaya CHPP, which will enhance the economical
efficiency of the station possessing a considerable spare capacity.
The year of 2010 became a jubilee one since JSC TGC-1 celebrated its five-year anniversary. At first sight, this is a young company, but it comprises
the stations founded more than a century ago. I believe this combination of energy and experience can assure an extraordinary success!
I am sure that the joint efforts of the Company’s Board of Directors, Management, and shareholders will contribute to TGC-1 dynamic development and
ensure the reliable and uninterrupted power supply to consumers of the Russian North-West in the future as well.
Kirill Seleznev
Board Member, JSC Gazprom
Chairman of the Board of Directors, JSC TGC-1
Dear shareholders,
Summing up the results the TGC-1 activity in 2010, we may say that this period has become
a period of stable growth both for the economic life and for the energy industry of Russia.
The increase in electricity consumption occurred in the regions of the TGC-1 presence;
the growth of consumption in St. Petersburg and the Leningrad Oblast made over 7%, in
the Republic of Karelia almost 6% and about 1% in the Polar Region at that. The positive
dynamics has developed in the heat energy consumption as well, which impacted the
operation of our electric power plants.
The total electricity output by the TGC-1 plants, including Murmanskaya CHPP, exceeded
27bn kWh in 2010. The heat useful output was registered at the level of 28mn GCal, which
is 8.8% bigger than the figure of 2009. The electricity generation at CHPPs increased
meanwhile by almost 11%. Thereby, we have given a good growth of electricity generation
at our CHPPs against the background of the electricity production loss due to the low
water content at our HPPs. The efficient operation on the wholesale electricity market
as well as in the sector of non-regulated contracts for electricity and capacity purchase
has become the second significant positive factor, which impacted the results of the
reporting period.
All that allowed us to ensure the TGC-1 revenue growth by almost 32% as compared to
2009 and fix this figure at the level of RUR50bn. The operating profit made up about
RUR5.9bn, having increased by 53.3% as compared to the previous year. The Company’s net profit has grown by 7.2% to RUR3.6bn. Meanwhile, in
2010 we increased both the amounts of financing of the projects for modernisation and capital construction, and the investments in the repair and
maintenance programmes.
The year of 2010 was ample for us for the events, which have already impacted or will impact the TGC-1 operation in the nearest years. I would
like to point out some of them. We have accomplished the project, which has been discussed from the time of the TGC-1 establishment. The Company’s
headquarters moved from the building in Marsovo Pole to a new contemporary office. We evaluate the moving in several aspects altogether, in
particular: the comfortable conditions provided for the employees favourably influence on the Company’s internal climate and the office maintenance
cost reduction impacts directly the performance financial and economic indicators.
Furthermore, in the preceding year the history of one of the oldest electric power plants of our country, the first heat power plant of the GOELRO
Plan, Krasny Oktyabr CHPP-5 came to an end. The station put into operation in October 1922 is closed, and energy supply of the regions, which it
provided with light and warmth for almost 90 years, is completely transferred to Pravoberezhnaya CHPP. We have been prepared for this project for
five years. This is the first experience in the history of current Russia of decommissioning of not individual outdated units, but the whole electric
power plant that called forth a solution of the complex of organizational and engineering problems. The equipment, which had faithfully served for
many decades, has given place to new assembly units. It is symbolic that Krasny Oktyabr CHPP went into the history in the year of the 90th anniversary
of the GOELRO Plan. Then, in 1920, a young country was in need of energy. Today it needs a new electric energy industry. Efficient refurbishment of
the assets and dynamic development is our paramount objective for the immediate coming years.
The year of 2010 has shown that the fruitful cooperation of the TGC-1 employees and shareholders, Board of Directors and Management enhances
the Company’s competitive capability and serves for the benefit of the north-west region and its economic development.
Andrey Filippov
General Director,
Chairman of the Board, JSC TGC-1