Grid Connection Services
Rendering high-quality services for applicants, ensuring the availability of the electric power infrastructure in terms of grid connection of consumers, developing the power grid complex, and eliminating power grid restrictions for grid connection of new consumers and providing high-quality and reliable power supply to existing electricity consumers are the near-term grid connection goals of Rosseti Kuban.
Based on the 2022 results, the approved grid connection targets were over-achieved over the year.
The demand for grid connections has continued to be quite strong. There are around 38,000 applications per year.
The volume of completed grid connection agreements in 2022 grew:
- compared to 2020 – by 63% in terms of the number of agreements and by 22% in terms of connected capacity (145 MW)
- compared to 2021 – by 9% in terms of the number of agreements and by 0.9% (7 MW) in terms of connected capacity
Growth drivers:
- Removal of covid restrictions and realisation of deferred demand
- Shift in developers’ focus from multi-family to low-rise and single-family housing projects
- Changes to the laws regulating grid connections for members of gardeners’ non-commercial partnerships and dacha farming non-commercial partnerships, allowing applications to be filed to the grid organisation on a case-by-case basis
- De facto abolition of the subsidised grid connection from 1 July 2022, which triggered an avalanche-like increase in the number of applications received in the first half of the year
The Company supervises the execution of the grid connection procedure at all its stages and levels and implements organisational and technical corrective actions in order to ensure quick processing of applications and completion of grid connection agreements.
In 2022, the average delivery period of grid connection services was shorter than the statutory limit:
- Processing of an application, formulation of technical requirements and an agreement offer take an average of seven working days, with a standard value of 10 to 20 working days
- If technical measures have to be taken by the grid organisation, it takes an average of 139 days to complete the grid connection agreement, whereas the legislation specifies a period of six months to two years
Given the well-established cooperation between utility providers and regional and local authorities, the Company will continue to work on continuous improvement of its grid connection performance going forward, thus strengthening its image as a customer-oriented company.
Alexander Chepusov Deputy General Director for Development and Power Grid Connection
The key documents, which regulate the Company’s activities related to grid connection of consumer terminals (power installations) of legal entities and individuals to Rosseti Kuban’s power grids:
- Federal Law No. 35-FZ dated 26 March 2003 On the Electric Power Industry
- Rules for Grid Connection of Consumer Terminals of Electricity Consumers, Generating Facilities and Grid Facilities Owned by Grid Organisations and Other Entities to Power Grids approved by Decree No. 861 of the Government of the Russian Federation dated 27 December 2004
- Decree of the Government of the Russian Federation On Pricing in the Field of Regulated Prices (Tariffs) in the Electric Power Industry No. 1178 dated 29 December 2011
- Order of the FAS of Russia On Approval of the Guidelines for Determining the Grid Connection Fee No. 490/22 dated 30 June 2022
A complete list of regulatory legal documents, detailed information on the grid connection procedure in Rosseti Kuban is publicly available on the Company’s website www.rosseti-kuban.ru in the To Consumers / Grid Connection section.
For dynamic indicators on grid connection of consumers in 2020–2022, please see Appendix No. 9.
Completion of Grid Connection Agreements
In the reporting year, the Company competed 36,912 grid connection agreements. The total capacity of the completed grid connection agreements was 795 MW, which is 153% higher than planned. The volume of connected capacity increased by 0.9% (7 MW) year-on-year.
In 2022, electric service was provided to more than 70 healthcare facilities, including hospitals, medical assistant and obstetric stations, and outpatient clinics, with a total capacity of more than 5 MW. Among the largest and most significant are:
- Outpatient haemodialysis centre of outpatient polyclinic of Vyselkovskaya Central Regional Hospital (0.25 MW)
- Farmservice, LLC, an enterprise to produce medical personal protective supplies in Vasyurinskaya village, Dinskiy District, with a requested capacity of 1 MW
- SpetsPharmProizvodstvo, LLC, a pharmaceutical enterprise in Pavlovskaya village (500 kW)
- Kuban Medical Centre, LLC in Krasnodar (250 kW)
- Medical assistant and obstetric stations in Gorodskoy homestead and Krasnoye village, the Teuchezhsky District, the Republic of Adygeya of the Adygeya Interdistrict Hospital named after K.M. Batmen (30 kW)
Russia’s southern regions has historically played a significant role in the nation’s food supply. During 2022, the Company completed the grid connection of more than 1,000 agricultural and food manufacturing plants for a total capacity of 54 MW. The most notable facilities:
- Novorossiysk Grain Processing Plant, PJSC (9.8 MW)
- Selkhoz-Galan, LLC, an agricultural production facility in Konstantinovskaya village, Kurganinsky District (1.13 MW)
- Kubanproduct, LLC, a high-tech greenhouse complex for growing vegetable crops in Novodmitriyevskaya village, Seversky District (450 kW)
- Agro-Yug, LLC, an agricultural production facility in Krasnensky village, Teuchezhsky District, Republic of Adygeya (300 kW)
- Dondukovsky Elevator, JSC, consumer terminals of the land plot for placing a farm in Dondukovskaya village, Giaginsky District, Republic of Adygeya (150 kW)
- Olenarii, LLC, a deer breeding farm in Dakhovskaya village, Maikop District, Republic of Adygeya (150 kW)
Additionally, the Republic of Adygeya and the Krasnodar Territory have been popular destinations for migration in recent years, which has raised housing demand. In order to accommodate this demand, the Company allotted 155 MW of power capacity to more than 2,500 housing projects. A total of 66 socially significant facilities (schools, kindergartens, cultural organisations and sports facilities) with a combined capacity of over 13 MW were also connected to the power grid.
Consumer Demand for Grid Connection in 2022
In 2022, Rosseti Kuban signed 35,349 grid connection agreements for a total capacity of 958 MW with a total value of RUB 13.2 billion, excl. VAT. Grid connection demand has been steadily increasing after 2020. On average, at least 33,000 agreements are signed and about 38,000 applications are submitted every year.
Amounts of Revenue Generated and Money Collected
Revenue for grid connection services for the reporting year amounted to RUB 1,282 million (excluding VAT), which is 120% of the planned and 45% below the revenue for 2021 (RUB 2,348 million). The variance results from Stage 1 of the agreement with CPC-R, JSC (revenue of RUB 729 million) and the agreement with Novoroslesexport, JSC (revenue of RUB 361 million) being completed in 2021. There were no ongoing agreements for 2022 that would have generated a similar level of revenue. Alongside with that, the Company completed the 2nd stage of the grid connection agreement with CPC-R, JSC for RUB 420 million.
Proceeds for grid connection services amounted to RUB 4,865 million including VAT in 2022, which is 3.8 times higher than planned and 107% higher than in 2021 (RUB 2,354 million including VAT). The advance payments made under with the grid connection agreements are what cause the proceeds indicator to perform better than expected. Revenues of at least RUB 2,282 million are anticipated in 2023.
However, the second stage of grid connection under the agreement with CPC-R, JSC was completed in 2022 (amount of revenue — RUB 420 million).