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Power generation and distribution in Russia in 2017

Economic importance of the electric power consumption in Russia region-wise

It would be hard to overestimate the importance of electric power; its generation is one of the key factors for high job performances. The development of electric power production system shows the qualitative level of competitive ability of the country, it also specifies the industrial growth dynamics. Electric power consumption in Russia is quite high: the indices of 2016 were 1.087 trillion kW-h, that is almost 2% higher than the data of 2015, and in September 2017, the electric power consumption in Russia increased by 1.4 % as compared to September of the previous year. The increase in electric power consumption is connected with the decrease of average monthly ambient temperature, аs well as with the growth of electric power application by the industrial enterprises. Russia is in the top ten countries rich in electric resources. About 600 electric stations provide continuous electric power generation; they provide the electric power in Russia region-wise.

Who consumes electric power in Russia? Every person is certainly an electric power consumer; however, on a global basis the top share is attributed to the industrial sector – about 36%, the provision of fuel and energy complexes takes about 18%, аnd approximately 15% of electric power is consumed by the residential sector. The remaining part (about 30%) is consumed by non-production industries, аs well as the railway transport.

The pattern of electric power consumption in Russia region-wise is distinctly different, for example, in Siberia, over the half of the produced electric power is actually consumed by the industrial sphere and FEC, whereas the European part of Russia with a large number of localities uses a significant part of electric power for the provision of residential sector.

As for the types of power plants, they are the following used in Russia:

  • Thermal (about 70%)
  • Hydraulic (about 20%)
  • Nuclear (about 10%)
  • Alternative (0.2%).

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What is the electric cost for enterprises in Russia?

The electric cost in Russia for enterprises in 2017 is formed due to the new pricing methods, in particular, as since 2017 an “electricity prices” concept has been introduced for private individuals. Consequently, the electricity cost depends on the zone of the facility location – pricing or non-pricing.

For enterprises located in the pricing zone, the electric cost in Russia is calculated based on the electric power price at the wholesale markets, and the state effects no control action on the value formation. This zone includes, for instance, the Ural territory, аs well as the European part of the RF.

In non-pricing zones, the electric cost in Russia for enterprises is measured based on the controlled prices. This zone includes, for instance, the Far East regions, аs well as the Kaliningrad Region and the Komi Republic.

Regardless of the zone type, the electric cost for enterprises on the territory of Russia in 2017 consists of the following:

  • Wholesale market value
  • Price of capacity and grid transmission
  • Infrastructure payments
  • Sales premiums.

In case of legal entities, there is a “Price category” concept: depending on how much exactly the electric power the enterprise consumes, the appropriate category can be selected. There are six categories in total. One should be very scrupulous about the calculation of electric power consumption and tariffs in Russia, selecting the most profitable category will allow saving on these costs up to 35%.