Essential topic Economic impact	UN Sustainable Development Goals
Key events 50,0925.4 million kWh* electricity sold (-3.9 %) 45,607.9 mln kWh useful supply of electricity (-2.3%) 15,178.1 MW capacity sales (+14.7%) RUB 22,023 million – retained economic value	Objectives and initiatives Making profit from the activities of the Company Ensuring uninterrupted production of electrical energy and power, thermal energy, thermal power, coolant

Distribution of responsiblities

Main regulatory documents

6.1 Governance approach

[GRI 3-3]

OGK-2 is the main supplier of heat and electricity to households and industrial enterprises in the regions where it operates. Operational and financial performance is of great social importance and affects all consumers of electricity and heat.

The key tool for ensuring the control of economic sustainability and performance is the system of key performance indicators (KPIs). The KPI target values for senior governance, which are updated annually, include, among other things, values for indicators describing both the current state and prospects of the Company’s economic performance. At the end of 2022, most of the target values were achieved or even significantly exceeded the expected results.

6.2 Customer orientation

[GRI 2-6]

Customer orientation is intended to ensure safe, uninterrupted and trouble-free operation of power plants, thanks to which the Company can meet the demand of consumers for electrical energy. All electricity sales in Russia comply with the rules of the wholesale electricity and capacity market (WECM).

OGK-2,PJSC fleet mainly includes thermal power plants that generate electricity and heat: SDPP (GRES) and TPPs. There are no HPSs designed for significant heat production in the fleet, so electricity generation significantly prevails over heat generation.

The Russian electric power industry combines monopoly (transmission, system governance) and competitive (generation and marketing) activities.

Sales companies purchase electricity and power energy in the wholesale and retail markets and sell it to the end consumers. Generating companies generate and sell electrical energy and power on the wholesale or retail markets to sales organizations or end consumers.

The wholesale electricity market (WEM) plays the key role in electricity sales of OGK-2, PJSC*.

WEM operates on the territory of regions united in price and non-price zones.

• In the price zones of the wholesale market, the purchase and sale of electrical energy and capacity is carried out at free (non-regulated) prices. Two price zones are distinguished: 1) the territory of the European part of Russia and the Urals and 2) the territory of the Siberian Federal District. This is due to the peculiarities of planning and maintaining the regime due to differences in the generating equipment and existing network restrictions on the flow of active power from one price zone to another.
• Non-price zones, where, for technological reasons, the organization of market relations is not yet possible, and the sale of electricity and power is carried out according to special rules.

Electricity within the price zones can be sold at regulated prices under regulated contracts (RCc) and at competitive (non-regulated) prices on the day-ahead market (DAM), on the balancing market (BM), under free contracts.

• RCs are signed only in relation to electricity and power supplied to the population, groups equated to the population, as well as in a number of individual subjects of the Russian Federation. Prices for RCs are determined by the Federal Antimonopoly Service of Russia.
• DAM is a competitive selection of price bids from suppliers and buyers a day before the actual supply of electricity with the determination of prices and supply volumes for each hour of the day. The price is determined based on the balance of supply and demand.
• DAM one day before delivery determines the planned volumes of production and consumption, however, the actual consumption inevitably differs from the planned one. Trade in diversions of actual production/consumption from planned volumes is carried out in real time on the BM.

About 80% of the electricity generated by OGK-2, PJSC is sold to the WEM under free contracts.

6.3 Operating results

[GRI 2-6]

The key operating indicators for 2022 slightly decreased. 

Electricity sales amounted to 50,925.4 million kWh, having decreased by 3.9%, useful electricity supply decreased by 2.3%, to 45,607.9 million kWh.

Capacity sales amounted to 15,178.1 MW, which is 14.7% more than in 2021. The increase is due to the status of forced generators at power units No. 1–7 of Novocherkassk SDPP, which did not supply power to the WEM in 2021.

Useful supply of thermal energy amounted to 4,974.3 thousand Gcal, which is 1.9% lower than a year earlier.

The main reasons for the decrease in the volume of productive supply of thermal energy in 2022 compared to 2021 were:

• reduction in the volume of consumption of thermal energy by the main counterparty of LLC Kirishsk SDPP KINEF;
• termination of heat supply to the Energy workers village at Troitsk SDPP after commissioning of a heating boiler house (from November 1, 2022, heat energy is sold only to industrial consumers from collectors).

6.4 Financial results 

From the point of view of sustainable development, the company's financial results are best characterized by the "retained economic value" indicator, which reflects the amount that the company can invest in business development after paying all necessary costs. This indicator represents the balance of funds after the amount received by the company is deducted from the costs incurred by key stakeholders.

Retained economic value in 2022 amounted to RUB 21,267 million, up 21.1% year-on-year. The main reason for the change in retained economic value was the increase in payments to capital providers.

Retained economic value = Direct economic value created (revenue from operations, income from financial investments, asset sales) - Distributed economic value (operating costs (including payments to suppliers), payments to employees, shareholders, investors, creditors, government, local communities and for charitable purposes).

Generated and distributed direct economic value of OGK-2, PJSC, million rubles*

[GRI 201-1]

[GRI 201-4]