Pavel Livinskiy at the Russian Investment Forum 2019: “The Targets of the ROSSETI Group Digital Transformation are Ambitious, but Absolutely Reachable”

Pavel Livinskiy at the Russian Investment Forum 2019: “The Targets of the ROSSETI Group Digital Transformation are Ambitious, but Absolutely Reachable” 14.02.2019

During the Russian Investment Forum 2019 held in Sochi, CEO of the ROSSETI group Pavel Livinskiy presented the Digital Transformation 2030 concept approved by the Board of Directors of the power holding in December 2018. This concept provides for introduction of the advanced equipment at power facilities of the power grid complex, creation of the unified fully automated infrastructure management system and changes in all business processes.

The Territory of ROSSETI stall showed the road map and the expected effects of the plans implementation.

 Pavel Livinskiy noted that in 2018 ROSSETI made the first step to reach the target. In particular, the whole Group of companies has already switched to a risk-oriented management model, which enables to repair or replace the equipment only when it is really needed. This approach leads to a significant efficiency increase of the repair program and new construction plans when equipping power facilities with modern sensors and analyzing data transmitted using artificial intelligence.  

According to the Head of the power holding, it is equally important, that last year, together with the Government of the Russian Federation and federal executive and legislative authorities, they made significant progress in resolving essential regulatory issues concerning the grid complex and negatively effecting its investment attractiveness as well as financial and economic situation.

“It is of utmost importance that the Government should establish clear long-term rules at the first stage of the new infrastructure creation and monitor their implementation. The law on smart metering combined with the ability to set long-term tariffs, the improved procedure of privileged access to network infrastructure and introduced economically reasonable fees for grid capacity store can ensure full payback of the digital transformation concept and create not just a modern grid complex, but a dataway for the 'digital economy' of the country based on ROSSETI infrastructure,” added he.

Currently, the ROSSETI group has already begun to change all business processes and create the Common Information Model (CIM). This will help to form a matrix management system, providing for one level of network operation in place of the existing three levels and scaling up the speed of decision-making under any conditions. At the same time, the infrastructure will be controlled automatically in standard situations while an employee will have to connect to the system only in case of detected anomalies and need for deep analytics.

In the near term the final version of the standards for the digital grid will be prepared. They are expected to be approved by March of this year.  Then the companies of the ROSSETI group will begin to implement them in the course of their investment and production activities.

 “Of course, there will be a revolution in customer relationship after installing of 100% smart metering devices due to the development of two-way communication, which will allow us to monitor the quality of provided services, to analyze the load and to provide consumers with recommendations for improving the energy efficiency of the device. Additional mobile services are already much-needed and we must provide them,” emphasized the head of the power holding in his speech.

In conclusion, Pavel Livinskiy stressed that everyone would benefit from the digitalization of Russian power grids. A company will be able to reduce its costs (CAPEX - at least by 15%, OPEX - at least by 30%) and its losses by 50% and more, and will have new non-tariff sources of income. As a result, the company's market capitalization will increase from the current 153 billion rubles in EV/EBITDA multiplier up to 1 trillion rubles.

The Government will get a modern dataway that suits almost every industrial and domestic consumer, as well as reduced social risks due to an unprecedentedly reliable power supply and a new product line for the development of non-resource exports that includes attributes to create digital infrastructure.

“Of course, the consumer, already demanding greater availability, a new quality and range of services, is the main beneficiary of the digital transformation. ROSSETI is ready to provide not only existing, but also future requests of any client,” concluded Pavel Livinskiy.

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