Management Comment: Heat Capacity Modernization Program in Russia — a large-scale source of demand for domestic engineering companies
Management Comment: Heat Capacity Modernization Program in Russia — a large-scale source of demand for domestic engineering companies
February 11, 2019. Moscow — PJSC Evropeyskaya Elektrotekhnica (the "Company" or the "Group"), one of the leaders in the Russian engineering market, welcomes the decision to launch the Heat Capacity Modernization Program in Russia. This program was approved by the Russian Government on January 24, 2019.
Key aspects of the program:
• The program covers 40 GW capacity (~ 16% of the installed capacity in the Russian Federation);
• The total budget for the modernization is estimated to be RUB 1.5 trillion;
• The total volume of offers under the new energy capacity program is estimated to reach RUB 3.5 trillion;
• The program implementation period is 2022–2035;
• The first selection stage of the projects for modernizing TPPs is taking place in April 2019;
• The rate of return for investors in the program for selection in 2019 is 14% (established by the Russian Government).
The program goals:
• To attract further private investment in the electric power sector of the Russian Federation;
• To ensure demand for Russian power engineering enterprises;
• To increase the localization level for foreign power equipment in Russia.
Ilya Kalenkov, General Director of PJSC Evropeyskaya Elektrotekhnica, commented on this event: “The launch of this program is one of the key events in recent years in the domestic engineering market. The scale of the upcoming projects, their implementation across the country, looking forward to 2035, will provide versatile business opportunities for all Russian participants in the power engineering markets. Particularly interesting prospects will open up for companies that have launched production of their own electrical products, including Evropeyskaya Elektrotekhnica.
I am sure that once the program has launched, a positive reassessment of the prospects of the engineering market in the country will be rather pertinent.
Our company is working on the possibility of participating in specific projects within the program. We perfectly understand the specifics of the electric power industry — both thermal and nuclear, in our relevant areas. During the planned cooperation, we hope to apply our extensive experience in design, assembly, installation and commissioning of engineering systems for various purposes.
Our list of customers includes dozens of energy companies virtually all over Russia, from Sakhalin to Kaliningrad. One recent project that I would like to mention specifically entails delivering supplies for the construction of new heat power facilities — Pregolskaya TPP and Primorskaya TPP in the Kaliningrad region. We are also continuing project implementation at the facilities of Kaliningradskaya CHPP and CHPP-15 in St. Petersburg.
Our well-established relations with international and Russian vendors, federal logistics platform, own production and electric laboratory will allow us to provide timely deliveries of a wide range of engineering products for planned projects (potential vendors for specific product categories are specified in brackets):
· Thermal compensation cables, instrumentation and power cables (TKhK Kabel);
· 1 kV distribution switchboards (in industrial partnership with ABB, Schneider Electric, DKS);
· Process automation and control panels (ABB, Schneider Electric, Siemens);
· Internal and external lightning (Lighting Technologies, Bely Svet, LEDEL, Lumistec, Siteco, IntiLED, ITS);
· Uninterruptible power supply (DKS, Svyaz Engineering);
· Cable support — trays and racks (SZPK, DKS);
· Cable penetrations (Roxtec);
· Electrical heating systems (Evropeyskaya Elektrotekhnica Engineering Center).
Electric power facilities are built to operate for years to come, even decades. Modern engineering solutions will be used in the program projects, which will ensure energy efficiency and energy saving, as well as a high level of digitalization. Using modern equipment for control and remote monitoring of facilities allows to reduce unplanned downtime, lower the costs and risks associated with ensuring production safety, extend the operation life of energy assets and offer the best upgrade solutions.
Reliable solutions at system level are based on the use of specific advanced materials and components. For example, using an ethylene propylene insulated cable allows more energy to be passed through the same section, which often gives engineering solutions additional flexibility and operational characteristics.
The facilities in the scope of this program will not be very technically complex in terms of building electrical grids, which will allow us to implement these projects with a moderate load on engineering and design personnel.
We hope that in the course of the program, the regulatory system within which companies of this sector (electrical, heat, water) operate in Russia will also be constructively analyzed. The entire spectrum of regulatory and technical requirements in the electric power sector needs to be updated due to the emergence of fundamentally new technologies and the organization of technological processes in the industry.”
About the Group of Companies PJSC Evropeyskaya Elektrotekhnica
PJSC Evropeyskaya Elektrotekhnica (MOEX: EELT) provides comprehensive services in the sphere of creating energy and electric power supply systems, electric lighting systems, and low current systems at all types of facilities, as well as industrial electric heating systems.
The Company has been working in the electrical engineering market since 2004, and at present has its own engineering and production facilities. The Company is one of the leading distributors of electrical equipment in Russia, offering customers a wide range of products made both in Russia and abroad. Thanks to a well-organized and efficient logistics system, the Company is able to supply products (including oversize loads) all over Russia, including to hard-to-reach areas of the North, as well as Belarus, Kazakhstan, Turkmenistan, Kyrgyzstan and Uzbekistan. The Company established its own production of transformer substations, electric switchboard equipment of any complexity (up to 6300A), electric lighting systems and electric heating systems.
The Company implements projects in the Oil&Gas sector, electric power sector, nuclear industry, metal industry, mining industry, and manufacturing industry and at transport infrastructure facilities. Evropeyskaya Elektrotekhnica's customers include companies such as Rosneft, Gazprom, NOVATEK, LUKOIL, and Nizhnekamskneftekhim. The Company's projects include Power of Siberia, Yamal LNG, Smolensk NPP, Data Center of Sberbank of Russia, and the Domodedovo, Sheremetyevo, and Pulkovo airports, etc.
Since 2018, the Group has been producing highly efficient modular process equipment for clients in Oil&Gas and petrochemical markets at the site of its subsidiary ROG-Engineering, a research and production company in Ufa (Republic of Bashkortostan, Russia).
Key financial indicators of PJSC Evropeyskaya Elektrotekhnica (IFRS):
|
Revenue (RUB billion) |
Profit for the period (RUB million) |
Total assets (RUB billion) |
9m 2018 |
2.6 |
224.3 |
1.47 |
2017 |
2.6 |
134.7 |
1.15 |
The number of employees is about 400 (as of June 30, 2018). Since September 2017, common shares of PJSC Evropeyskaya Elektrotekhnica are traded on the Moscow Exchange with trading code EELT.
In June 2018, the Company was named "Leader of Import Substitution" at the "Leader of Competitive Sales" annual national awards, in which 450 domestic suppliers from various industries took part.
Contacts:
PJSC Evropeyskaya Elektrotekhnica
Tel .: +7 (495) 640-93-48
Mailing address: Building 3, 1 Lyotchika Babushkina St., Moscow, 129344
Press contact
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Contact for investors and analysts
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For more information, please contact:
Stanislav Martyushev
Director for Corporate Communications and Investor Relations
PJSC Evropeyskaya Elektrotekhnica
Tel. +7 (495) 640-93-48, ext. 164
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