Electricity Inftrastructure - Projects of the Regional Priority

8/10/2019 Electricity Inftrastructure - Projects of the Regional Priority

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Energy Community Secretariat Investment options in the Energy Community 115thAthens Forum, 25 26 November 2009

ELECTRICITY INFRASTRUCTUREELECTRICITY INFRASTRUCTURE

-- PROJECTS OF REGIONAL PRIORITYPROJECTS OF REGIONAL PRIORITY

1515THTHAthens ForumAthens Forum

2525 26 November 200926 November 2009

Energy Community SecretariatEnergy Community Secretariat

www.energy-community.org

INVESTMENT OPTIONS IN THE ENERGY COMMUNITY


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CONTENTCONTENT

INTRODUCTION

INVESTMENT OUTLOOK 2008 - 2009

THE TREATY AS A FRAMEWORK

PROGRESS UPDATE

THE CHALLENGE

CONCLUSIONS


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INTRODUCTIONINTRODUCTION

THE ENERGY POLICY IN EUROPE

Three common objectives:

sustainability

security of supply

competitiveness

One answer: A real Internal Energy Market

European Community has identified the requirements forachieving this:

Unbundling

Effective regulation

Transparency

Infrastructure

Network security

Adequacy of electricity generation and gas supply capacity

Energy as a public service


4/29Energy Community Secretariat Investment options in the Energy Community 415thAthens Forum, 25 26 November 2009

INTRODUCTIONINTRODUCTION

THE ENERGY POLICY IN SOUTH EAST EUROPE

The same objectives as in the EC, but more stringent

` One solution:

A common framework for regional energy market



INVESTMENTS OUTLOOK 2008INVESTMENTS OUTLOOK 2008--20092009

Effects of the financial and economic crisis

Energy investments in most regions and sectors are expected to drop sharply

in 2009, mostly in the OECD countries.

The financing environment is getting tougher, the final demand for energy is

weakening and the cash flows are falling.

Both supply and demand side investments are being affected.

The energy supply infrastructure is being affected in three ways by the

financial and economic crisis:

Tighter credits; energy companies find it more difficult to obtain credit for

both on-going operations and new projects; in some cases, the cost ofcapital has risen in absolute terms, making marginal investments

uneconomic;

Lower profitability of new power generation investments

Less need for capacity, with the falling demand for energy caused byeconomic downturn.



The GDP growth and energy demand forecast

Electricity consumption across the Energy Community has varied widely, in

some cases indicating sharp decline during the past year on the year to year

comparison

Change in electr icity consum ption in the Ener gy Com m unity [Feb. 2009 / Feb. 2008]

(source: Platts in SEE, 31 July 2009)

Former

YugoslavRepublic of

Macedonia Montenegro

Serbia

BiH - FBiH

BiH - RS

Albania

Croatia

-25.0

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

[%]




The GDP growth and energy demand forecast

Projected electricity consumption growth is set to moderate values by each

of the Contracting Parties

Projected average consumption growht for the Region set for 2009 is 2.33%


Pro jected annual electricity cons um ption grow th

(source: Security of Supply Statements, July 2009)

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

Albania

[ - 2020]

BiH

[ - 2020]

Croatia

[ - 2012]

Former

YugoslavRepublic of

Macedonia

[ - 2020]

Montenegro Serbia

[ - 2015]

UNMIK

[ - 2018]

[%]



THETHE ENERGY COMMUNITYENERGY COMMUNITY A REGIONAL APPROACHA REGIONAL APPROACH

BENEFITS:

Economies of scale in energy investments and operations

Larger (regional) energy market for suppliers

Compatible rules and institutions with the European Union

Implementation of a harmonised legislative framework including:

Market rules

Third party access to networks

New infrastructure authorisation and licensing procedures

Mutual Recognition of licenses

Adoption of Generally Applicable Standards Application of common Safeguard Measures, etc.

Better conditions for stability and mutual assistance

Dispute settlement procedure



PROGRESS UPDATE transmission lines

IT

SK

HU

SI

HR

BA

GR

TR

BG

RO

MD

UKR

AL

ME

RS

ATHeviz

Pecs

Ernestinovo

Sombor

Novi SadTimisoara

Zerjavinec

Cirkovce

Konjsko

Durres

Tirana

Elbasan

Bitola

MaritsaEast I

N. Santa

Podgorica

Stip

ChervenaMogila

Babaeski

Skopje

Nadab

Bekesaba

Okroglo

Udine

Nis

Recently completed orUnder const ruction

Candidate pro jects

Florina

Constanta

to Pasakoy(TR)

to Italy

to Italy

to Italy

to Italy

S.Mitrovica

Ugljevik

New investments in transmission infrastructure(source: SECI TSP Review, May 2008)

MK

Kosovo B




IT

SK

HU

SI

HR

BA

GR

TR

BG

RO

MD

UKR

AL

ME

RS

ATHeviz

Pecs

Ernestinovo

Sombor

Novi SadTimisoara

Zerjavinec

Cirkovce

Konjsko

Durres

Tirana

Elbasan

Bitola

MaritsaEast I

N. Santa

Podgorica

Stip

ChervenaMogila

Babaeski

Skopje

Nadab

Bekesaba

Okroglo

Udine

Nis


Candidate pro jects

Florina

Constanta

to Pasakoy(TR)

to Italy

to Italy

to Italy

to Italy

S.Mitrovica

Ugljevik

New OHL 400 kV interconnection Tirana (AL) Podgorica (CG)

Construction progressing on both sides

- expected to be commissioned by mid 2010

MK

Kosovo B




IT

SK

HU

SI

HR

BA

GR

TR

BG

RO

MD

UKR

AL

ME

RS

ATHeviz

Pecs

Ernestinovo

Sombor

Novi SadTimisoara

Zerjavinec

Cirkovce

Konjsko

Durres

Tirana

Elbasan

Bitola

MaritsaEast I

N. Santa

Podgorica

Stip

ChervenaMogila

Babaeski

Skopje

Nadab

Bekesaba

Okroglo

Udine

Nis


Candidate pro jects

Florina

Constanta

to Pasakoy(TR)

to Italy

to Italy

to Italy

to Italy

S.Mitrovica

Ugljevik

New 400kV transmission line Tirana Elbasan (AL)

- Construction progressing

- expected to be commissioned byApril 2010

MK

Kosovo B


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IT

SK

HU

SI

HR

BA

GR

TR

BG

RO

MD

UKR

AL

ME

RS

ATHeviz

Pecs

Ernestinovo

Sombor

Novi SadTimisoara

Zerjavinec

Cirkovce

Konjsko

Durres

Tirana

Elbasan

Bitola

MaritsaEast I

N. Santa

Podgorica

Stip

ChervenaMogila

Babaeski

Skopje

Nadab

Bekesaba

Okroglo

Udine

Nis


Candidate pro jects

Florina

Constanta

to Pasakoy(TR)

to Italy

to Italy

to Italy

to Italy

S.Mitrovica

Ugljevik

New OHL 400 kV interconnection Tirana 2 (AL) - TPP Kosovo B

- MoU between TSOs signed in 2008, financial agreement with KfW signed

- construction expected to start in 2010 and finish 2012

MK

Kosovo B


14/29



IT

SK

HU

SI

HR

BA

GR

TR

BG

RO

MD

UKR

AL

ME

RS

ATHeviz

Pecs

Ernestinovo

Sombor

Novi SadTimisoara

Zerjavinec

Cirkovce

Konjsko

Durres

Tirana

Elbasan

Bitola

MaritsaEast I

N. Santa

Podgorica

Stip

ChervenaMogila

Babaeski

Skopje

Nadab

Bekesaba

Okroglo

Udine

Nis


Candidate pro jects

Florina

Constanta

to Pasakoy(TR)

to Italy

to Italy

to Italy

to Italy

S.Mitrovica

Ugljevik

New OHL 400 kV interconnection

former Yugoslav Republic of Macedonia - Serbia

- Serbia completed construction of part I and II (Nish Leskovac),

- Former Yugoslav Republic of Macedonia - the EIA study is under way and

financing agreement with the WB is closed

MK

Kosovo B


15/29



IT

SK

HU

SI

HR

BA

GR

TR

BG

RO

MD

UKR

AL

ME

RS

ATHeviz

Pecs

Ernestinovo

Sombor

Novi SadTimisoara

Zerjavinec

Cirkovce

Konjsko

Durres

Tirana

Elbasan

Bitola

MaritsaEast I

N. Santa

Podgorica

Stip

ChervenaMogila

Babaeski

Skopje

Nadab

Bekesaba

Okroglo

Udine

Nis


Candidate pro jects

Florina

Constanta

to Pasakoy(TR)

to Italy

to Italy

to Italy

to Italy

S.Mitrovica

Ugljevik

New HVDC submarine interconnection Croatia Italy

- Common feasibility study is under preparation by HEP-OPS and TERNA

MK

Kosovo B


16/29



IT

SK

HU

SI

HR

BA

GR

TR

BG

RO

MD

UKR

AL

ME

RS

ATHeviz

Pecs

Ernestinovo

Sombor

Novi SadTimisoara

Zerjavinec

Cirkovce

Konjsko

Durres

Tirana

Elbasan

Bitola

MaritsaEast I

N. Santa

Podgorica

Stip

ChervenaMogila

Babaeski

Skopje

Nadab

Bekesaba

Okroglo

Udine

Nis


Candidate pro jects

Florina

Constanta

to Pasakoy(TR)

to Italy

to Italy

to Italy

to Italy

S.Mitrovica

Ugljevik

New HVDC submarine interconnection Montenegro Italy

- Feasibility study is completed in 2008 and project was accepted.

- Draft agreement for construction between TERNA S.p.A and Prenos AD

has been initialed

MK

Kosovo B


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Novi Sad


IT

SK

HU

SI

HR

BA

GR

TR

BG

RO

MD

UKR

AL

ME

RS

ATHeviz

Pecs

Ernestinovo

Sombor

Timisoara

Zerjavinec

Cirkovce

Konjsko

Durres

Tirana

Elbasan

Bitola

MaritsaEast I

N. Santa

Podgorica

Stip

ChervenaMogila

Babaeski

Skopje

Nadab

Bekesaba

Okroglo

Udine

Nis


Candidate pro jects

Florina

Constanta

to Pasakoy(TR)

to Italy

to Italy

to Italy

to Italy

S.Mitrovica

Ugljevik

New OHL 400 kV interconnection Serbia - Romania

- Feasibility study is finalized, other studies are under way

MK

Kosovo B


18/29


Novi Sad


IT

SK

HU

SI

HR

BA

GR

TR

BG

RO

MD

UKR

AL

ME

RS

ATHeviz

Pecs

Ernestinovo

Sombor

Timisoara

Zerjavinec

Cirkovce

Konjsko

Durres

Tirana

Elbasan

Bitola

MaritsaEast I

N. Santa

Podgorica

Stip

ChervenaMogila

Babaeski

Skopje

Nadab

Bekesaba

Okroglo

Udine

Nis


Candidate pro jects

Florina

Constanta

to Pasakoy(TR)

to Italy

to Italy

to Italy

to Italy

S.Mitrovica

Ugljevik

OHL 400 kV interconnection Sombor (RS) Pecs (H)

- In 2008 listed for technical assistanceunder IPF however with insufficient

political support

MK

Kosovo B


19/29


Bitola

Novi Sad


IT

SK

HU

SI

HR

BA

GR

TR

BG

RO

MD

UKR

AL

ME

RS

ATHeviz

Pecs

Ernestinovo

Sombor

Timisoara

Zerjavinec

Cirkovce

Konjsko

Durres

Tirana

Elbasan

MaritsaEast I

N. Santa

Podgorica

Stip

ChervenaMogila

Babaeski

Skopje

Nadab

Bekesaba

Okroglo

Udine

Nis


Candidate pro jects

Florina

Constanta

to Pasakoy(TR)

to Italy

to Italy

to Italy

to Italy

S.Mitrovica

Ugljevik

Interconnection

former Yugoslav Republic of Macedonia Albania - Italy

- 2 part line [OHL 400 kV Bitola Elbasan]

[HVDC submarine line Albania Italy]

-the feasibility study is under revision (MEPSO) due to the decision for

development of the interconnection Montenegro - Italy

MK

Kosovo B


20/29


Bitola

Novi Sad


IT

SK

HU

SI

HR

BA

GR

TR

BG

RO

MD

UKR

AL

ME

RS

ATHeviz

Pecs

Ernestinovo

Sombor

Timisoara

Zerjavinec

Cirkovce

Konjsko

Durres

Tirana

Elbasan

MaritsaEast I

N. Santa

Podgorica

Stip

ChervenaMogila

Babaeski

Skopje

Nadab

Bekesaba

Okroglo

Udine

Nis


Candidate pro jects

Florina

Constanta

to Pasakoy(TR)

to Italy

to Italy

to Italy

to Italy

S.Mitrovica

Ugljevik

OHL 400 kV interconnection Skopje Kosovo B

- old (decommissioned) 220 kV line to be refurbished to 400 kV interconnection

- under consideration by the TSOs

MK

Kosovo B

PROGRESS UPDATE t i i l i


21/29


Bitola

Novi Sad


IT

SK

HU

SI

HR

BA

GR

TR

BG

RO

MD

UKR

AL

ME

RS

ATHeviz

Pecs

Ernestinovo

Sombor

Timisoara

Zerjavinec

Cirkovce

Konjsko

Durres

Tirana

Elbasan

MaritsaEast I

N. Santa

Podgorica

Stip

ChervenaMogila

Babaeski

Skopje

Nadab

Bekesaba

Okroglo

Udine

Nis

Under const ruction

Candidate pro jects

Florina

Constanta

to Pasakoy(TR)

to Italy

to Italy

to Italy

to Italy

S.Mitrovica

Ugljevik

MK

Transmission infrastructure development

- status as of November 2009

Completed preparation

Advanced preparation

To be reconsidered

In operation

Kosovo B

PROGRESS UPDATE ti


22/29


PROGRESS UPDATE power generation

Investment planning in power generation scenario

source: SECI - GIS Update - EIHP / EKC (USAID), November 2007

PROGRESS UPDATE ti


23/29



Investment planning in power generation - scenario

source: SECI GIS Update - EIHP / EKC (USAID), November 2007



24/29


Petrol / gas fired CC TPP [97 MW] Vlore (Albania)

- commissioned in 2009 and operated at partial capacity (2530 MW)

expected to be fully operational by 2010

HPP on Drin River watershed, [50-80 MW]Ashta (Albania)

- BOT concession attributed to Consortium of Austria (Verbund and EVN) in

September 2008, mechanical equipment contracted in September 2009 -

expected to be operational in 2012

HPP storage cascade [up to 340 MW] on Devoli river(Albania)

- BOT tender awarded to Joint Venture EVN / Statkraft in January 2008 -

construction expected to start late 2010.


Investment projects currently advancing in implementation

status as of November 2009



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Lignite fired TPP [2000 MW] Kosovo C staged-out as

TPP [2 x 500 MW] New Kosovo (UNMIK)- In October 2009 the Ministry of Energy and Mining announced decision to

build 2x500 MW TPP with a first stage of 500 MW EIA prepared,

negotiations with the investor are expected to be closed in 2010

HPP [450 MW] Buk Bijela on Drina river redefined to a reduced

capacity [150 MW] HPP Gornja Drina (BiH)

- In October the utilities EP RS (Bosnia and Herzegovina) and EPS (Serbia)decided to reduce the capacity of the HPP project Buk Bijela [450 MW] on the

river Drina and define a new HPP project Gornja Drina [150 MW] feasibility

study is under way


Investment projects currently under reconsideration

status as of November 2009


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CONCLUSIONS (1)CONCLUSIONS (1)


27/29


The progress with investments has been slowed down by the financial

and economic crisis

Many investment priorities announced by companies andgovernments, but limited capacity (both financial and administrative)

constrain the achievements in a timely manner

Long delays in announcing tenders and selecting the investors; inmany instances, decisions are reversed and projects re-tendered,

Projects costs were significantly shifted upwards after the feasibility

studies were updated

Turn key contracts are currently difficult to secure given the many

uncertainties




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Equipment contracting becomes more problematic; prior to the crisis,

prices went significantly up and so did lead time for manufacturing energy

technologies

Tender documentation is in many cases not sufficiently well prepared,

There are concerns about the natural resources availabili ty in case of

hydro power plants, where water is also use for irrigation purposes

Concession or association terms are often unclear this concern may

be the case for often very low number of expressions of interest from the

leading investors in the region

The markets remain small and fragmented and the investment decisions

are still influenced by the energy nationalism;



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THANK YOU

Simon Uzunov

www.energy-community.org

Documents

Electricity Inftrastructure - Projects of the Regional Priority