10 years ago, in June 2008, the most important stage in the reform of the Russian electric power industry - the reorganization of RAO UES of Russia - was completed. The industry, considered an unreformable monopoly controlled by the state, began to turn into a market economy based on competition and private property. 10 years is the optimal period of time, allowing to understand what happened and what does not.
The main goal of the reform was to ensure an investment leap. The industry's need for investment was unprecedented. Only in 2006-2010. it was estimated at about 11.8 trillion rubles, of which 6.75 trillion rubles. were required to create new generating capacities.
The launch of the investment attraction program was carried out at the stage of the existence of RAO UES: in 2007-2008, 18 public offerings of shares of generating companies were held, which provided attraction of almost 1 trillion rubles. private investment. These funds were used to implement an unprecedented program of new construction.
The total capacity of the facilities introduced by the mechanism of contracts for capacity supply (DPM) developed during the reform was 2008-2017. 26.5 GW, and in the same period 39.8 GW was introduced (hereinafter the data of the calculations of the Russian Energy Agency of the Ministry of Energy of Russia). This is the largest amount of energy inputs in a few decades. For comparison: in 1991-2001. The total capacity of the introduced generating capacities in the country was only 12.4 GW.
The level of performance of obligations for new inputs was quite high: of planned for DPM 136 facilities, 129 were launched. Basically new facilities are combined-cycle units, the most advanced technologies in thermal power engineering.
In the network complex, which remained under state control, it was impossible to count on private investment. Here worked another mechanism proposed in the course of the reform - investment tariff formation (the so-called RAB-regulation). It also provided an unprecedented volume of network capacity inputs. In 2008-2017 years. more than 73,000 MVA substations were constructed and nearly 36,000 km of power transmission lines with voltage classes of 220-750 kV.
Many or few
Critics of the reform until 2008 were convinced of its failure, believing that bringing large-scale private investments into the power industry was an insoluble task. It was also considered unrealistic to ensure the volume of new inputs conceived during the reform.
From the above data it is clear that the thesis that it is not possible to attract private investment in Russia's electric power industry on a market basis and the forecasts of the breakdown of the program of input proved to be untenable. Later, the main vector of criticism shifted in the opposite direction: the realized inputs were evaluated as excessive.
Agreeing with the critics in the very fact of the redundancy of the generating capacity in the UES of Russia (the maximum load is 151 GW with the installed capacity of 243 GW), I consider it necessary to explain the reasons for its occurrence. Let me remind you that the reorganization of RAO UES was implemented in June 2008, just a few months before the global economic crisis. In developing the investment strategy, the energy industry relied on the then existing forecasts of the Russian economy that did not foresee either global economic crises or the economic consequences of future geopolitical crises. These forecasts were focused on the average annual growth rate of Russia's GDP in the next 10 years at 4-5%. As you know, the actual average annual GDP growth rates for this period did not exceed 1%.
In parallel with the inputs, the obsolete facilities were withdrawn: in 2008-2017, The volume of dismantling of capacities in the UES of Russia amounted to almost 16,000 MW. Nevertheless, its rates should have been much higher. The historical window of exceeding the installed capacity above the peak will close, according to experts, between 2021 and 2025. This means that in the country's power system, in parallel with the findings, it was possible to deploy a large-scale modernization program for existing facilities, which, as is known, can not be implemented without a temporary withdrawal capacities from work. Thus, the reserve created by the reform can and should be used for a large-scale modernization of those capacities that have not been replaced by new inputs under the reform. This is exactly the subject of discussion under the so-called second program of power supply contracts (hereinafter DPM-2). Intensive, and sometimes emotional discussion of this program can not undo the fact that the reserve for it was created as a result of the reform. Both the idea and the legal design of the PDM have become an important part of the reform of the capacity market.
In addition, it is important to note that excess does not create excessive price pressure on consumers.
How rates varied
It was the prices and consequences of the reform for their level that were one of the most acute risks, according to which the positions of supporters and opponents of the reform were the opposite. For example, one of the most convinced critics of the reform, the honored power engineer of Russia, Doctor of Technical Sciences, Professor Viktor Kudryavy wrote: "In the transition to the liberal market, the equilibrium price model, because of the prohibitive rise in electricity tariffs, inevitably stagnates the economy due to the loss of competitive advantages of energy-intensive national business, which is the main taxpayer ".
Both conservative energy companies and most politicians were convinced that the transition to the market would create an unacceptable price burden for both the population and industrial consumers, and the reformers said that the reform was designed to contain the growth rates of electricity prices. To objectively analyze what really happened in this sensitive area in 10 years, it seems reasonable to make three groups of comparisons:
- Comparison of electricity prices with the general level of inflation in the country,
- Comparison of electricity prices in Russia and in developed countries,
- Comparison of electricity prices with prices for key fuels - gas and coal.
In the first group, it is advisable to compare the growth of electricity prices for industrial consumers with the growth of producer prices of industrial goods, and the increase in prices for the population with the level of consumer inflation. For 10 years, from 2008 to 2017, the increase in producer prices of industrial goods was 124%, and the increase in electricity prices for industrial consumers over the same period - 126%. In other words, the dynamics of these two indicators for 10 years was almost identical.
As for the population, the increase in electricity prices for the population in 2017 as compared to 2008 was 107%, and the level of consumer prices for the same period increased by 94%. Thus, the average annual increase in the growth rate of electricity prices for the population compared to inflation was 1.2%.
Cross-country comparison of the price level for electricity is possible in two ways - at the nominal ruble exchange rate and at purchasing power parity. The first way about the population in Russia and abroad, as is known, shows that in Russia one of the lowest levels of the price of electricity. According to the OECD (takes into account purchasing power parity), in 2016 the level of electricity prices in Russia was 12% lower than in the US, 65% lower than in France, and more than three times lower than in Germany.
A comparison of the purchasing power of electricity prices for industrial consumers in Russia shows that the price in Russia is approximately 51% higher than in the US, almost equal to the price in Germany and almost 50% lower than in the UK. Thus, the price for Russian industrial consumers is lower than for their competitors in most foreign countries.
The third group of comparisons - with the prices for fuel - gives unambiguous conclusions. From 2006 to 2016, the average weighted price of electricity for all consumers increased by 2.5 times with an increase in the price of coal by 2.8 times and an increase in the price of natural gas by 3.8 times.
Our analysis confirms that there have been no catastrophic price consequences from the transition to market pricing as a result of the reform in 10 years. Moreover, gas tariffs regulated by the state grew significantly faster than market prices for electricity. The reform and dramatic social consequences did not cause a rise either - the tariffs for the population grew almost synchronously with the level of inflation. On the world background, the price level for electricity in Russia continues to be understated, which undoubtedly hinders the development of energy efficiency in Russia. Contrary to fears, the reform of the electric power industry made it possible to contain the rate of price growth in the fuel and energy sector of the country as a whole.
Accidents less, equipment more
It is important to understand how the reform has affected the reliability of the energy system. The number of accidents at power plants with an installed capacity of more than 25 MW decreased from 4,497 in 2011 to 3,804 in 2017, that is, by 16%. In electric networks with a voltage of 110 kV and above for the same period, the number of accidents decreased from 19 580 to 15 086, ie, by 23%.
Another important indicator is the average duration of power supply interruptions in the distribution network, where all household consumers, small and medium businesses are located. This indicator, according to the Ministry of Energy, fell from 5.39 to 2.15 hours from 2010 to 2013, that is, 2 times. In 2014-2016 years. this indicator decreased by another 6.7%.
According to the Ministry of Energy, as a result of the renewal of funds, the average age of energy equipment began to decline in 2013. Energy Minister Alexander Novak at the hearings in the State Duma noted the long-awaited event for power engineers: for the first time in decades in 2012, the rate of renewal of power plant equipment exceeded the rate of its natural aging.
It is important to note that one of the most important causes of accidents has practically disappeared - regional power shortages. By the mid-2000's. this problem was so acute that it forced the power engineers to introduce a special category - regions with high risks (RVR). In them, during the autumn-winter maximum in conditions of low and ultra-low temperatures, it was necessary to disconnect industrial and domestic consumers in order to preserve the energy system itself. The list of these regions included whole regions, including the Moscow, Primorsky, Kaliningrad energy systems, Western Siberia, the Southern Urals (including the Sverdlovsk energy system), the South of Russia (including the Sochi energy district).
It can be said with certainty that there are no more problems of power shortage at the national level, it has been solved thanks to new inputs in the course of the reform. Today, the RVR temporarily places only certain areas within the regional energy systems, and the risks of disconnection are usually removed due to adequate repair measures in the networks.
Effects of reform outside the electricity sector
Production of steam turbines in Russia from 2010 to 2017 increased by 79%. The production of steam boilers, except for central heating boilers and their components, grew by 36% over the same period, insulated wires and cables - by 93%, electric motors, generators and transformers - by 60%.
These figures are confirmed by the opinion of experts. Thus, the head of SUEK Vladimir Rashevsky believes that in 2010-2017. the loading of enterprises of the domestic machine-building industry doubled, which allowed "to recreate the energy engineering of Russia after the crisis of the 1990s - the beginning of the 2000s."
Following the results of the post-reform decade, it can be confidently asserted that the reform was the most important driver of development for the domestic power machine building and electrical industry. Russian producers (these industries are almost entirely in private hands) managed to react dynamically and quickly to the emerging demand and win in an open competitive struggle with the best world producers.
Is reform completed?
In 2008, the authors of the reform realized that a full range of serious decisions would be required to complete it. At the same time, they proceeded from the premise that the most significant and ambitious decisions have already been implemented and that they are sufficient to make the reform irreversible. This thesis was seriously criticized. Many experts were convinced that the government will not fulfill its promises on the gradual liberalization of the electricity market in accordance with Resolution No. 205 of April 7, 2007. Let me remind you that as of June 2008, the liberalized wholesale electricity market was only 25%, and the consistent growth of its share up to 100% was planned only by January 1, 2011.
To this, skepticism was added to preserve private property in generation, which the director of the Institute of Energy Policy Vladimir Milov wrote in 2008: "There is a high probability that after Chubais's departure these players use their high lobbying capabilities, quickly shake up the structure of companies, , and the electricity market model. It is likely that foreigners will sell their stakes in OGKs and TGKs to Gazprom in exchange for gas assets, large industrial groups will disassemble effective power plants for long-term electricity supply contracts at cheap prices, while remaining consumers will remain at risk in the form of a surplus market and the least efficient generation. There can not be any competition in such conditions. And according to the results of possible upsurge in prices and other troubles in the future, the revision of the entire concept of the reform and the return to vertical integration are not ruled out. "
These forecasts did not come true. The government fully fulfilled its commitment to consistent market liberalization. Foreign generating companies that came to Russia at that time, work in this market until today. Thus, relying on the total of 10 past years, it should be recognized that, despite the incompleteness of certain elements, the reform of the Russian electric power industry has proved its irreversibility.
What did not work out? The final transformations that were discussed in 2008 were not implemented. The target capacity market did not emerge, nothing was done to create the market for system services, the amount of cross-subsidization continues to grow, and, most importantly, retail markets, liberalization of which would have a significant effect on consumer, are not built in the country.
What need to do
Today, in 2018, the country's electric power industry faces new challenges. Without claiming a comprehensive program for the development of the electric power industry, I will only note that the experience of reforming the Russian electric power industry can provide solutions to the complex problems of its development in the coming years. Take the situation on the retail and wholesale markets.
It seems to me that today the most complex knot of economic and technological problems is being tied up in the retail electricity markets: digitalization of network technologies, the strengthening of the role of direct current (especially in everyday life), the development of household energy storage systems, the active development of distributed sources of generation and microgeneration, and the emergence of a new phenomenon - the requestor (the consumer who is also the producer). One of the largest specialists in the domestic power industry and former technical director of RAO UES of Russia, Boris Vainzikher, rightly talked about the emergence of a new, paradoxical for the traditional energy consumer characteristics - independence. These and other technological trends before our eyes are changing the main participants of the retail market: distribution networks, distribution companies, consumers.
The fundamental economic prerequisite for the emergence of motivation to use all these new technologies is the price of retail electricity. The systematic underestimation of the retail price of electricity and the resulting increase in cross-subsidization (from RUB 140 billion in 2008 to RUB 400 billion currently) is one of the overripe problems of the Russian power industry.
Today, when the volume of electricity consumption is directly related to the standard of living, a system has been created in which the lowest income group subsidizes the rich. Owners of expensive suburban estates get tens, or even hundreds of times more electricity, than low-income groups of the population. Selling it at the same artificially low price, we, in fact, create a constant financial flow from the poor to the rich.
These kinds of problems have an unpleasant property - over time they become more and more destructive in their consequences, and, as the experience of pension reform shows, the endless postponement of them becomes impossible.
Of course, before tackling this problem, a serious program of measures to protect low-income groups of the population is needed. A number of elements of these programs were tested in the course of the reform itself, for example the social rate of electricity consumption for the population, which allows paying a limited amount of consumption at a lower tariff.
Convinced that the defense systems of low-income groups have been worked out, we need to move on to the main issue - real, and not in words, the elimination of cross-subsidization and the liberalization of retail markets. All the basic technological and economic prerequisites for this have already been created by the reform of the electric power industry. It remains to decide the main thing - to abandon the artificial binding of the price level to the level of inflation. This is especially true now, when inflation in the country has fallen below 4%. Realizing the complexity of this kind of transformation, I consider it expedient to start them from experiment in several retail markets in some regions. The experience of competition in the retail market for the consumer, which we face today in telecommunications, can and should be transferred to the soil prepared for this in the electric power industry. Reasonably organized competition of energy retailers in retail electricity markets can contain the growth of prices, as we saw in this for 10 years on the example of the wholesale electricity market.
Competitive sales will help solve another old problem of modern electric power industry - non-payments. Otherwise, we will not just continue to burden the industrial consumers with artificial additional load, but also restrain the development of the largest sector of the retail energy efficiency market for potential Russian producers in electrical engineering and machine building.
And on the wholesale market the main trends are already on the agenda of the government. This is the DPM-2 program, based on the use of the most important tool, born of the reform, - DPM. Its goal is not so much the growth of installed capacity, but its modernization. I do not want to interfere in an active dispute over the distribution of the released funds for the DPM-2 project, but a decision on this issue should have been adopted as early as 2018.
No less important is the second vector - the conclusions of obsolete capacities. Their volumes have increased significantly in recent years, and this in itself is an important positive outcome of the reform. However, as long as there is a historical window of opportunity in the form of a reserve of capacities created by the reform, it is essential to accelerate this work substantially. The withdrawal of the power plant is the most technologically challenging task, and it would be right to adopt additional economic and technological measures that facilitate such projects for generating companies. With all the complexities, the withdrawal of obsolete equipment will give domestic energy another impetus to reduce the specific fuel consumption and increase reliability.
The main conclusion from the analysis of the past 10 years since the reform of the electric power industry - the goals for which reform was carried out - have been achieved, and the most serious price and technological risks have been avoided. The decade that passed at the end of the reform proved that a combination of fundamental liberal market principles and reasonable centralization can solve the most difficult engineering, economic and socio-political tasks in our country.
Author - Chairman of the Board of RAO UES of Russia in 1998-2008.