Dear Shareholders,
The Gazprom Group's priority in the electric power industry is to provide reliable supplies of electricity and heat to consumers. This is impossible today, given the reality of Russia's electric power sector, without large-scale investment programmes.
Moreover, in the context of global competition, new technologies and innovative projects aimed at saving energy and reducing environmental impact are needed to increase the efficiency of energy production and the use of existing facilities at the level of the world's largest energy companies.
We have installed 4 GW of new capacity and have become the undisputed leader in Russia at upgrading production facilities over the five years since Gazprom entered the electric power production industry.
The year 2011 was a watershed in the development of generating companies in the Group. Construction was completed on the latest steam-gas generating units in Moscow, Saint Petersburg and the Leningrad Oblast, as well as new hydropower generating units in the Vuoksinskiye HPPs Cascade. Projects in many other regions have advanced to the stage of active implementation. A total of 665 MW of “new energy” was produced in the past year by TGC-1. Furthermore, the modern steam-gas generating units built at the Yuzhnaya and Pervomayskaya CHPP plants in Saint Petersburg are actually new power plants, which have radically changed the industrial structure and have significantly increased the Company’s overall efficiency.
The performance of combined-cycle steam-gas power units was one of the main favorable factors enabling the growth of TGC-1’s financial and economic performance in 2011. Despite a decrease in heat production due to weather conditions, the Company's revenues grew by 14 % compared year on year, reaching 57.7 billion rubles. Net profit was 3.8 billion rubles, which represents a 4 % increase year on year. The value of assets increased by 12.5 % for the year.
Summing up 2011, it is noteworthy that TGC-1 management achieved all the objectives set by the business plan. In the corporate sphere, the target structure of the equity capital of the TGC-1 subsidiary Saint Petersburg Heating Grid was formed. The project for building a heating transit pipeline from Apatitskaya CHPP to the city of Kirovsk was actively developed in the Murmansk Oblast.
The transition to unified corporate standards for all Gazprom generating companies also had a positive influence on TGC-1’s development. These standards are aimed at increasing the efficiency of management systems and reducing costs.
The Company has challenging and very interesting tasks ahead. We have strong growth potential, and we must use it to its fullest.
I am convinced that the key to our success in the future will continue to be the constructive cooperation between the Board of Directors, management and the Company's shareholders.
Member of the Gazprom Management Board
Chairman of the TGC-1 Board of Directors
Kirill Seleznev
Dear Shareholders,
Last year will go down in our company’s history as the most intense in terms of new generation capacity introduced and the number of new facilities launched. TGC-1’s installed capacity increased by 9 % in 2011. As of the beginning of 2012, the Company became the second-largest territorial generating company in Russia, trailing only Mosenergo in terms of installed capacity. Today the Company continues to improve the reliability of power supplies to consumers, is expanding the area of its heating coverage, and is serving the development of the North-West region of Russia as a whole.
Two new power units were launched at the Pervomayskaya CHPP in Saint Petersburg in 2011. These are the first steam- gas generating units in TGC-1's production complex. We will discontinue operating aged equipment at the old part of the Pervomayskaya CHPP in the near future, and the plant will become one of the most ecological in Russia. A new combined-cycle gas turbine unit (CCGT-450) was also launched in Saint Petersburg at the Yuzhnaya CHPP in 2011. This power plant now has the greatest installed capacity of any plant in our Company. We are also constructing a CCGT-450 at the Pravoberezhnaya CHPP. This new unit will be launched in 2012.
We also began construction at the Saint Petersburg Central CHPP in 2011. Two new combined-cycle gas turbine power-generating blocks will be built there. This is a special station for us, since it combines the three oldest generating subsidiaries of TGC-1, which were pioneers in Russian electric power and heating. These subsidiaries have unique equipment with a century-old history, but this equipment requires an immediate upgrade. Moreover, renovation of our power stations will make it possible to close old city boilers, and the overall quality of the heat supply to the center of Saint Petersburg will meet modern international standards.
TGC-1 is also continuing its programme in the Leningrad Oblast for updating its generating assets. Two new hydroelectric units were installed at the stations of the Vuoksinskiye HPPs Cascade.
A project was launched for improving the efficiency of hydro generation in Murmansk Oblast, where we started reconstruction of the Iovskaya HPP. This station is part of the Nivskiye HPPs Cascade, the largest cascade north of the Arctic Circle. This station produces more than a third of all the electricity of the Kola Peninsula.
Overall, we invested more than 18 billion rubles in 2011. The total expediture on fixed assets amounted to almost 25 billion rubles. We’ve already seen a real positive impact of these investments on our production results. We economize fuel, improve environmental performance, and increase the overall efficiency of our technological complex. It is important to note that when implementing our investment programme we use equipment made in Russia for the most part. These are top-quality products manufactured by the Russian power industry and meet international standards for energy efficiency and environmental safety.
The year 2011 marked the 125th anniversary of the creation of the Saint Petersburg energy system, the 80th anniversary of the Karelia energy system, and the 75th anniversary of the foundation of the Kola energy system. Our company owns power plants that are unique because of their architecture and landscaping qualities. These include plants that are part of Russia’s historical heritage, and modern “launch” CHPPs. Work experience and the best traditions are passed on from year to year and from generation to generation. Reliability and responsibility have always been and continue to be our main principles. With the support of shareholders and governments of the regions, and relying on our history and the knowledge of our staff, we will make every effort to preserve the uniqueness of TGC- 1 and ensure its future development.
General Director,
Chairman of the TGC-1 Management Board
Andrey Filippov
