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Power Generation

The Company's power generation segment is represented by a fully vertically integrated chain, from generation to transmission and distribution of heat and power to external consumers (commercial power generation) and for own needs (supply power generation). The aggregate power generation capacity of the Group entities is 5.8 GW, with commercial power generation accounting for 73% and supply power generation accounting for 27%. Power generating facilities in the Group's asset portfolio help strengthen vertical integration and ensure high APG utilization rates while at the same time reducing electricity costs at its production facilities.

The sector secures reliable supply of heat and power both to cover the Company's in-house needs (generating facilities of the Upstream and Downstream) and meet the demand from outside consumers of heat and electric power in the South and North-Caucasian Federal Districts of Russia. That is the reason why the sector has embarked on the following development paths:

  • develop generating facilities that are commercially viable (primarily reconstruction or modernization)

  • develop local generating facilities at the Company's oil producing and refining facilities

  • develop renewables.

* Exclusive of smaller power generation facilities.

COMMERCIAL POWER GENERATION

The Group’s main commercial heat generating facilities are located in the south of the European part of Russia. In particular, LUKOIL accounts for 99% of electricity generation in the Astrakhan Region and 62% in the Krasnodar Territory.

In 2016 the Company completed the investment cycle in commercial power generation, driving a significant reduction of capital expenditures.

The Group's major renewable energy assets are located in Russia (four HPPs with an cumulative capacity of 296 MW, output of 765 GWh in 2016).

The Group also operates two solar power plants at its own refineries with a capacity of 9 MW in Romania and 1.3 MW in Bulgaria. These plants, built on unused industrial sites within the refineries, supply electricity to local grids. A similar project to build a 10 MW solar power plant is currently underway at the Volgograd Refinery. 

In addition, the Group owns the 84 MW Land Power wind power plant in Romania, which benefits from state support to renewable power generation.

Development of in-house electricity generation at its fields and plants helps the Group to reduce its electricity costs and increase the APG utilization as a fuel for gasfired power plants. 

In-house generation accounts for 26% of the total electricity consumption for production purposes across the Group.

In 2016, supply power generation at the Group's oil and gas production, processing and distribution entities totaled 5,339 million kWh, up 27% year-on-year.


  • 20122013201420152016
    Installed capacity of combined heating plants*, MW6616716781,1641,539
    Power output, GWh2,3492,8663,2734,1935,339

    *Starting from 2016 figure includes Usa (100 MW) and Filanovskiy (49.6 MW) energy units and sales of Volgograd TPP-2 to Volgograd Refinery (225 MW).

  • Key performance indicators

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