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Power
Generation in depth:
LUKOIL Annual Report
( - 342 Kb)
LUKOIL Analyst Databook
(
- 118 Kb  - 30 Kb)
LUKOIL Fact
Book
(- 628
Kb)
LUKOIL’s new
business sector, Power Generation, was created in 2008 as part of the Group’s
Strategic Development Program.
The new business comprises all aspects of power generation, including
delivery and marketing of electrical energy and of heat produced at power
plants. The nucleus of the segment is the Russian power generating company,
UGK TGK-8, which was acquired by LUKOIL in 2008, but it also includes companies
producing electricity and heat in Bulgaria, Romania, and Ukraine. The sector provides energy both for the Company’s own needs (in the
Exploration & Production and Refining & Marketing segments) and for
external power and heat customers in the Southern Federal District of
Russia.
Business restructuring
Reorganization of UGK-TGK-8 was completed in the reporting year. The
company was renamed ‘LUKOIL-Ecoenergo’ and was united with the Company’s hydro-electric
facilities. LUKOIL-Ecoenergo will now focus specifically on renewable energy projects
(wind power, hydroelectric and solar power).
Electricity and heat generation
Companies in LUKOIL’s Power Generation sector generated about
13.2 billion kWh of power in 2010. Total supplies of heat were 15.3 million Gcal, which is 9% less than in 2009. Lower heat production in the reporting year was due to a decline in
demand from consumers in the Southern Federal
District.
LUKOIL is also working consistently to optimize production costs of
its generating assets and to maintain close control of anti-crisis program
implementation in terms of reduction of non-production
expenses.
 Small-scale
generating
LUKOIL is rapidly developing its own power generating facilities at oil
& gas fields, enabling the Group to substantially reduce electricity
purchases and increase the rate of associated gas use by turning it into
electricity. Installed capacity of small-scale generating facilities is 0.7 GW.
The Group generated 1,409 million kWh of electricity at its own facilities in 2010, representing 9.9% of total consumption in production operations.
Electricity supply arrangements have been made more secure by use of
the latest technologies in investment projects for construction and
reconstruction of the Company’s own generating facilities. Use of new technologies also enables the Company to limit spending on
its electricity needs, through improvement of energy efficiency and use of the
Company’s own refined products as generating fuel.
Energy-saving Technologies
LUKOIL works constantly to improve reliability of its electricity
supply arrangements and to reduce spending on energy. These efforts have been
coordinated through corporate programs for energy saving and improvement of
reliability of power supplies.
Spending on measures as part of the program for improving reliability
of electricity supplies was over $149 million in 2010. Implementation of the
program reduced power cuts and resulting underproduction of crude oil by nearly
30%. Also during the reporting year Petrotel LUKOIL S.A. brought a power and
heat generating facility into test production using circulating fluidized-bed
technology, in order to improve reliability and enable flexibility in power
supplies.
 Renewable
energy
UGK-TGK-8, renamed ‘LUKOIL-Ecoenergo’ at the end of 2010, now brings together all of the
hydroelectric generating facilities of LUKOIL. The main purpose of LUKOIL-Ecoenergo is to carry out renewable energy projects.
LUKOIL specialists are fully aware of the huge potential for resource
and energy savings, which is offered by alternative sources of energy. Renewable
energy projects are being considered, which would use hydro, wind, solar and
geothermal energy. These activities are being pursued in partnership with
international companies, which are also interested in development of
renewables. In 2010 LUKOIL signed an agreement of mutual understanding with the Italian
company, ERG Renew, on cooperation in the field of renewable energy. In accordance with the agreement, the partners will consider
potential for combining their renewable energy businesses in Bulgaria, Romania, Serbia and Russia. The primary focus will be on wind power projects. ERG has extensive experience in construction and operation of renewable
energy facilities.
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Summary data |
2009 |
2010 |
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Installed capacity of combined heating plants,
MWh |
2,967 |
4,384 |
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Installed capacity of hydropower plants,
MWh |
297 |
295 |
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Installed heating capacity, Gcal/h |
9,819 |
14,343 |
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Installed capacity of boiler plants,
Gcal/h |
2,027 |
2,028 |
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Electricity output, mln KWh |
13,137 |
14,638 |
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Heat production, th. Gcal |
15,072 |
15,310 |
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LUKOIL-Kubanenergo
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LUKOIL-Rostovenergo
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LUKOIL-Volgogradenergo |
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LUKOIL-Ecoenergo | | 
