3.6. Environmental Responsibility

Environmental management

Unipro views protection of the environment as a prerequisite for doing business as a going concern.

The Company’s Environmental Management System (EMS) uses the logic of the Plan-Do-Check-Act (PDCA) management cycle.

Implementation of planning of appropriate responses to environmental issues, risks and opportunities for each Company’s branch resulted in development of long-term programmes to improve environmental efficiency and enable transition to best available technologies and addressing environmental risk.

Environmental SWOT-analysis highlights internal and external factors and assesses their mutual impacts. The procedure for environmental SWOT-analysis is set out in the Planning Rules for the Environmental Management System (EMS) (STO No. PTU-Р.04).
This SWOT-analysis represents a step towards transition to the international EMS standard under the updated version of ISO 14001:2015, which provides for a risk-based approach

Supervision of the EMS and its continuous improvement is effected through internal audits and regular reviews of reports from branches by management of the head office.

The main assessment tools used by branches are industrial environmental control (IEC) and internal EMS audits. In 2016, pursuant to Part 2, Article 67 of Federal Law No. 7-FZ “On Environmental Protection”, dated 10 January 2002, all Company’s branches designed uniform IEC programmes containing full descriptions of the types and frequency of environmental monitoring in areas affected by the Company’s production activities.

Environmental incidents are recorded and investigated in accordance with the rules set out in the EMS.

Pursuant to Article 73 of Federal Law No. 7-FZ “On Environmental Protection”, dated 10 January 2002, Unipro managers and specialists receive training in environmental protection and environmental safety at the time of hiring with refresher courses held at least once every five years.

Potential incidents that could affect the environment have been identified by the Company’s branches.

Emergency prevention and fire-fighting drills are carried out at all power plants in accordance with approved annual plans. Contracts have been made with fire-prevention and rescue services at branches.

The following actions are taken at branches to reduce the probability of environmental accidents and violations of environmental security requirements:

The Company assessed the risk of incidents at hazardous industrial facilities in analytical and explanatory notes to the “Safety Data Sheet for a Hazardous Industrial Facility (GRES). E.ON Russia JSC”. The risk assessment reviewed potential causes of incidents at hazardous industrial facilities, the probability of their occurrence and made forecasts of possible consequences (impacts on personnel, local people and the environment).

Potential accidents at hydraulic facilities are identified in special safety declarations for such facilities.

Documents have been prepared, which set out procedures for emergency response and prevention/mitigation of adverse environmental impacts at Unipro branches (see more details in the Unipro Annual Report for 2017).

Environmental sustainability

Environmental sustainability (rational use of natural resources) is a key part of Unipro’s overall management system.

The key natural resources used by the Company in its industrial processes are water and land (for the disposal of industrial and domestic waste).

In 2017, the Company developed and introduced key performance indicators (KPIs) for non-recoverable water consumption associated with water treatment for chemical processes, steam and water losses, and water leakages from heating networks. The KPIs are the basis of an incentive scheme to encourage better water management by personnel.

Key tasks for water conservation

Increasing sustainability of natural resources: reducing per-unit water use and inefficient water losses, introducing water-efficient processes and equipment, using storm runoffs as process water

Mitigation of adverse impact on water bodies: reducing waste water and/or pollutant content in waste water, increasing the share of recycled and circulating water

Identification of demand for metering devices and replacement of metering devices

Awareness-building activities (as part of corporate environmental protection days) regarding water use and protection for employees of branches and for pupils in sponsored power-engineering classes

Unipro is continuously implementing an employee awareness-building project, which uses environmental business games by Russian developers — Ecologic and Polish providers — Green & Great to upgrade skills in informed environmental and economic decision-making ensuring stable business development with due regard to requirements of the environmental legislation of the Russian Federation

The Company made consistent efforts in this sphere during 2018.

In order to reduce waste generation by branches, the Company has begun making contracts with inventory suppliers to return packaging and products, which are past their use-by date, but contain valuable components, which can be recycled by the suppliers. However, mechanisms of extended producer responsibility are still underdeveloped in Russia, so the primary method for reducing waste generated by inventory use is to forward it to third parties for recycling. All Unipro branches therefore maintain waste-sorting systems for specific types of waste that are subject to phased prohibition of land-fill disposal (burial) under a Russian Government Resolution that came into force on 1 January 2018. For this purpose, the Company has designed detailed territorial flow charts for waste management, identifying waste-recycling providers for specific types of waste and arranging visits to recycling plants by employees of the branches.

Environmental protection performance in 2018

Use of new technologies and solutions for reducing consumption of natural resources by Unipro can both reduce the Company’s operating costs and shrink its environmental footprint.

The Company’s power plants have water recycling systems that greatly reduce wastewater discharge volumes and the amount of fresh water required for operations, creating a powerful economic and environmental effect.

Gross emissions of pollutants (as rated in the Russian Federation) decreased by 53,600 tonnes year-on-year in 2018 (by 6.5% compared with 2017). This was due to lower electric power generation by steam-power units and a higher share of combined-cycle gas turbine plants in power generation, as well as measures adopted by the Company for the reduction of emissions.

Recyclable water, mln m3
2018
5,344
2017
6,066
2016
6,803
Electric power consumption for own needs, mln kWh
2018
1,762
2017
1,794
2016
2,081

The same factors explain reduction of СО2 emissions (by 4.1% compared with the previous reference period).

Ash and slag waste generation declined to 118,700 tonnes (down by 15.8% from 2017).

In late 2018, for purposes of validating its current EMS certificate, Unipro successfully passed its first EMS certification audit for compliance with the ISO 14001:2015 international standard, administered by the Russian Register Certification Association (accredited by international certification bodies, which are members of the International Accreditation Forum)

Emissions of pollutants, thousand tonnes

Indicator

2016

2017

2018

Gross air emissions of hazardous substances, total

63.9

57.3

53.6

Solid fuel ash

1.6

1.4

1.1

Gaseous and liquid substances, including:

63.6

56.9

52.4

sulphur dioxide

8.3

7.6

6.6

carbon oxide

11.8

9.8

8.4

nitrogen oxide

43.5

39.6

37.4

Smolenskaya GRES was acclaimed an “Eco-hero” for its part in the national eco-marathon “Recycle — Collect waste paper — Save a tree!”.

Most of the waste produced by the Company is non-hazardous in classes IV and V.

Most of the waste produced by the Company is non-hazardous in classes IV and V.

Ash and slag waste from burning of coal (hazard class IV) is disposed of in ash disposal areas at Company facilities based on a special license. The same procedure is used to dispose of ash and slag waste from burning of coal, which is classified in hazard class V (not subject to licensing).

The Company produces much less waste in higher hazard classes: I—III.

Oil and petroleum product sludge in hazard class III is used as lubricants or transferred to specialised licensed providers for neutralisation (incineration).

Environmentalising the workflow processes

Unipro draws extensively on European experience in environmentalising workflow processes in electricity and heat production, while taking account of Russia’s unique climatic conditions and availability of fuel resources.

A major reduction of СО2 emissions by newly-built or modernised power units under the programme of capacity delivery contracts is among the most important positive effects.

Vladislav Nigmatullin, Head of Strategy and Development:

“New facilities consume less fuel per kWh of electric power output and therefore produce fewer hazardous emissions. As in most Russian regions, wind and solar power plants will be unable to replace traditional power facilities any time soon, the best modernisation strategy is to replace steam-power units with combined-cycle gas turbine plants accompanied by a gradual development of renewable energy sources. The impact on the Russian economy of the programme of capacity delivery contracts has been positive. A similar positive effect can be expected from the programme for replacement of depreciated generating facilities, subject to a balanced approach and good regulatory solutions.”

Waste in hazard class II (sulphuric acid from batteries and sulphuric acid electrolyte sludge) is neutralised in special tanks based on a license.

Waste in hazard class I (mainly waste containing mercury, including fluorescent lamps, mercury thermometers and other measuring equipment) is transferred to licensed providers for neutralisation (de-mercurisation).

In 2018, Unipro did not retain any waste for land-fill disposal at its own facilities.

Unipro waste flow in 2018, thousand tonnes

Applicable Russian law describes two basic concepts: waste accumulation (storage on a production site for up to 11 months) and disposal. Disposal may mean either burial (land-fill) or storage for subsequent disposal or use.
All Unipro branches have facilities for waste storage. The Company had accumulated waste at both the beginning and the end of the period. The Company duly procured a centralised license for disposal and neutralisation of wastes in hazard classes II—IV at specialised sites.
Therefore, the Company’s waste disposal arrangements are in compliance with the requirements of Russian law

The “polluter pays” charges of Unipro fell by more than half in 2018. Key factors were as follows:

Minor increase of charges for disposal into water bodies is explained by changes in discharges from sewage treatment facilities at Berezovskaya GRES.

Changes in charges for emissions within maximum limits are due to reduction of above-limit charges (so emissions, which were subject to an above-limit rate in 2017, were payable at a standard rate in 2018).

Factor analysis of changes in “polluter pays” charges in 2018, RUB thousand

Plans for 2019

In the forthcoming reference period, transition to best available techniques (BATs) will include: