2. STRATEGY AND OUTLOOK

2.1 Mission and Values 2.2 Business Model and Capitals 2.3. Strategic Goals and Objectives

2.3. Strategic Goals and Objectives

The activities of Rosenergoatom Concern JSC, being a state-owned company, are primarily focused on meeting the state objectives of ensuring nuclear and radiation safety, solving the problems of heritage when supplying the national economy with electricity.

In meeting these objectives the Concern is guided by the following tasks and their implementation conditions:

  • Ensuring safe, efficient, and reliable operation of existing NPPs, nuclear and radiation safety of facilities which use nuclear power, protection of personnel, population, and environment (a set of measures on safe and sustainable work of operating NPP power units (moderni­zation of NPP systems and equipment aimed at safe, reliable, and sustainable work of NPPs, Program for Recovery of Resource Characteristics of RBMK power units) (see Section 3.3).
  • Increasing power generation while ensuring a necessary safety level (generating power while ensuring a necessary safety level. Generation totaled +8.2 % vs 2014).

Efficiency improvement of nuclear generation in the Russian Federation, closure of the nuclear fuel cycle, international expansion, including VVER power units servicing abroad, comprise the main areas of the Concern’s development.

CONCERN’S STRATEGIC GOALS AND OBJECTIVES, AND THEIR CONNECTION WITH STRATEGIC GOALS OF ROSATOM STATE CORPORATION

STRATEGIC GOALS OF ROSATOM STATE CORPORATION STRATEGIC GOALS OF THE CONCERN STRATEGIC OBJECTIVES OF THE CONCERN CONTRIBUTION IN 2015
New products for Russian and international markets Closure of nuclear fuel cycle at the power units with BN-800, BN-1200 reactors with with mixed uranium plutonium fuel
VVER-TOI project implementation
  • Implementation of the R&D Program
  • Construction of NPP power units with fast breeder reactors operating in the nuclear energy system with a closed nuclear fuel cycle
  • NPP construction on the basis of VVER-TOI project
See Section 3.9
Implementation of projects on construction of NPP power units with low and medium capacity
  • Project development for medium capacity power units
  • Project development for low capacity power units
See Section 3.9
Increasing the share in international markets Increasing the share of nuclear generation due to NPP installed capacity growth, and generation of nuclear power while ensuring a necessary safety level
  • Implementation of projects on NPP construction (8 NPP power units and 1 floating power unit are currently under construction)
  • Location and design of new NPPs
The power unit No. 3 of Rostov NPP was commissioned in 2015
The power unit No. 4 at Beloyarsk NPP was started up
Increasing the share in international markets Development of international activity
  • Construction of NPPs abroad according to the BOO rule (Build – Own – Operate)
  • Servicing of Russian design NPPs abroad, including: maintenance, repair, modernization, documentation development and personnel training
See Section 3.2
Reducing the products prime cost and speeding up the processes Increasing NPP operating efficiency
  • Increasing the capacity factor
  • Increasing VVER-1000 power units capacity to 104 % of Nnom
  • Switching VVER-1000 power units to 18‐month fuel cycle
  • Extending the service life of currently operating NPP power units which exhausted their design service life
  • Increasing the efficiency of repair campaigns
  • Increasing the efficiency of fuel use
  • Reducing the expenditures on operating activity, and cost management
  • Preparing for NPP construction on the basis of the VVER-TOI project
See Section 3.3
Increasing efficiency of design and capital construction of NPPs
  • Increasing the efficiency of the capital construction management system
  • Increasing the procurement efficiency through consolidation of procurement volumes, efficient inventory management, and logistics optimization
  • Serial and flow-line construction as part of VVER-TOI project: Kursk NPP-2, Smolensk NPP-2, Nizhny Novgorod NPP, etc.
See Section 3.3

KEY INITIATIVES AIMED AT IMPLEMENTING STRATEGIC GOALS:

  • Improving the competitive ability of the Concern’s new and existing NPP power units. We are planning to increase the scale of operations in traditional markets by commissioning of new power units according to the road map and enhancing the existing NPPs operation efficiency while unconditionally maintaining failsafe and secure operation of NPP power units.
  • Developing new business lines, by means of increasing foreign presence, inter alia. As for new prospects, the Concern is planning to develop new businesses and, together with specialized structural units of Rosatom State Corporation, it has recently developed and is implementing product strategies related to distribution activities, NPP services abroad, and DPC.
  • Enhancing efficiency of operations. Taking into consideration the Russian Federation Government pursued policy of keeping down electricity tariffs and the uneven economic environment conditioned by sanctions and foreign currency exchange rate volatility, it becomes most relevant and important to work for enhancement of operations efficiency.

The main drivers of expenditures optimization and reduction of specific semi-fixed costs accounted for by the Concern in the business plan for 2016 – 2018 include:

  • Reduction of expenditures on personnel as part of the Headcount Optimization Program;
  • Reduction of costs for fixed assets repair as a result of transition to 18‐month fuel cycle;
  • Directive task to reduce costs associated with administrative and maintenance activity;
  • Optimization of other costs, including wage indexation blocking.
STRATEGIC GOALS STRATEGIC GOALS UP TO 2030
Increasing the share in international markets
  • Commissioning of 19 new power units by 2030, and extension of the operating period of nine existing power units;
  • Increasing the power generation from 180.5 bln kWh in 2014 to 205 bln kWh in 2018, and 229 bln kWh by 2030;
  • Market penetration and development of new business lines.
Reducing the products prime cost and speeding up the processes
  • Reducing LCOE by 30 % in NPP projects of 2019 at the Novovoronezh NPP power units No. 6 – 7, including:
    1. Reaching the target operational expenditure indicators by VVER-TOI;
    2. Bringing the level of specific capital expenditures to less than 90 thousand rubles per kW in 2019 (Kursk NPP-2) and 75 thousand rubles per kW by 2030;
    3. Construction period — 48 months in 2019;
  • Electricity Prime Cost Management project implementation:
    1. Reducing specific semi-fixed costs by 30 % vs 2013 in comparable prices on the basis of supplied power;
    2. Increasing labor efficiency by 30 % by 2019;
    3. Improving the capacity factor calculated for the existing VVER units to 91 % in 2019.
Increasing the share in international markets
  • Development of Russian design NPPs servicing abroad;
  • Start-up of servicing of foreign design NPPs.