We sell electricity on the wholesale market and heat on the local markets. We supply heat for some 380,000 households in Chelyabinsk, Tyumen and Ozersk. Fortum has more than five decades experience working in Russia.
Fortum owns eight power plants in the Chelyabinsk and Tyumen regions, mainly gas-fired combined heat and power (CHP) capacity. In the end of the third quarter of 2016, the electricity production capacity of our plants in Russia was 4,440 MW and the heat production capacity 9,920 MW. This represents about 34% of our overall electricity production capacity and about 73% of our heat production capacity*. Fortum employs about 3,700 people in Russia.
We also have a 29.5% holding in TGC-1, which owns and operates hydro and thermal power plants in North-Western Russia as well as heat distribution networks in St. Petersburg.
In 2015, Fortum's Russian operations generated about a quarter of the company's sales and comparable operating profit.
*) Not including heat production capacity of joint venture Fortum Värme
Investment programme concluded
In early 2016 Fortum concluded the extensive investment programme it started in 2008 in Russia. During the programme, Fortum constructed over 2 GW production capacity that receives guaranteed capacity payments currently for a period of 10 years under the Russian Government's capacity supply agreement (CSA). Prices for capacity under CSA are defined in order to ensure a sufficient return on investments.
The units built under the programme utilise highly modern and energy-efficient technology and have significantly reduced specific emissions of power generation in Russia.
In 2016, Fortum is launching a wind farm project with a total capacity of 35 MW. The wind farm is expected to start production in 2017 and will serve Ulyanovsk, a city of 620,000 and located 680 km south-east of Moscow. The wind farm is included in the Renewable Projects Competitive Selection, administered by the Russian power market regulator. The goal of the government programme is to increase renewable power generation in Russia by using the CSA mechanism. The generation capacity under CSA receives guaranteed payments for 15 years in order to ensure a sufficient return on investment.