Final Report(English Version) · Preface Thisreportis a summary oftheresult on “FY2018StudyonBusinessOpportunity ofHigh-qualityEnergy InfrastructuretoOverseas(Feasibility Study

FY2018 Study on Business Opportunity of High-quality Energy

Infrastructure to Overseas

Feasibility Study on the necessary of Individual Infrastructure

improvement etc. for realizing the Action Plan

Feasibility Study on

Northern Combined Cycle Power Plant Project in Romania

Final Report

February 2019

Prepared for:

The Ministry of Economy, Trade and Industry

Prepared by:

The Kansai Electric Power Company, Inc.

Reproduction Prohibited

FY2018

Studyon

BusinessOpportunity ofH

igh-qualityEnergy

Infrastructureto

Overseas

TheM

inistry ofEconomy,Trade

andIndustry

February 2019

Feasibility Study onN

orthernC

ombined

Cycle Pow

erPlant ProjectinR

omania

Preparedby:

TheK

ansaiElectricPow

erCom

pany,Inc.

Preface

This report is a summary of the result on “FY2018 Study on Business Opportunity of High-quality Energy

Infrastructure to Overseas (Feasibility Study on Northern Combined Cycle Power Plant Project in Romania)”

entrusted by the Kansai Electric Power Company, Inc. from the Ministry of Economy, Trade and Industry as a

project in FY2018.

This study “Feasibility Study on Northern Combined Cycle Power Plant Project in Romania" is to investigate

the environmental suppression effect due to update of power plants corresponding to the deterioration of the

power infrastructure in Romania and the emission regulations of EU joined in 2007. Specifically, the survey was

conducted on updating to gas-fired combined cycle power plant fueled by natural gas which is expected to be

medium to long-term stable supply in Romania and with low environmental impact in regards to aged coal-fired

power plants installed in the Deva area where it is located in north of Romania.

In this study, the study team also investigated the possibility of utilizing superior Japanese finance tools,

including buyers' credits.

The study team hope that this report will help to realize the project mentioned above, and additionally this

report will be a reference for exporting high-quality infrastructure in Japan.

February 2019

The Kansai Electric Power Company, Inc.

Project Site Map

(Source: prepared by the study team)

Hunedoara County

Capital CityBucharest

Deva

Romania

Scale 1:5,000,000

List of Abbreviation

Abbreviation Full Name

aFRR Automatic Frequency Restoration Reserve

AHT Average Highest Temperature

Al2O3 Aluminum Oxide

ALT Average Lowest Temperature

ANAP National Public Procurement Agency

ANPMAgentia Nationala pentru Protectia Mediului

(Romanian National Environmental Protection Agency)

ANREAutoritatea Na ional de Reglementare

(Romanian Energy Regulatory Authority)

ANRGN Romanian Natural Gas Regulatory Authority

API American Petroleum Institute

ARA Amsterdam/Rotterdam/Antwerp

ARCE Romanian Agency for Energy Conservation

ARPAAgen ii Regionale sau Provincii Autonome pentru Protec ia Mediului

(Romanian Regional Environmental Protection Agency)

As Arsenic

AVR Automatic Voltage Regulator

B/C buyer’s credit

B/L bank-to-bank loan

Ba Barium

BAT best available technology

bcm Billion Cubic Meter

BCPs Boiler Circulation Pumps

BOD5 Biochemical oxygen demand

BOP Balance of Plant

Ca2+ Calcium

CANDU Canada Deuterium Uranium

CaO Calcium Oxide

CAPEX Capital Expenditure

CCPP Combined Cycle Power Plant

CCR Central Control Room

CCTV Closed circuit television

Cd Cadmium

CEH Complexul Energetic Hunedoara (Hunedoara Energy Complex)

CFPP Coal fired Power Plant

CFR Cost & Freight

C6H5OH Water-frenzied phenols

CHP Combined Heat and Power

CIF Cost, Insurance & Freight

CIS Commonwealth of Independent States

Cl-; Cl2 ChlorineCN- Cyanide

Co Cobalt

CO Carbon monoxide

CO2 Carbon Dioxide

COD Commercial Operation Date

COD(c) Chemical Oxygen Demand (chemical)

CONELNational Electricity Company

Romanian National Electricity Company

Cr Chromium

Cr6+ Hexavalent Chromium

Cu CopperoC Degree Celsius

daN deca newton

dBA decibel adjusted

DCS Distributed Control System

ECAs Export Credit Agencies

EDG emergency diesel generator

EEE Electrical and Electronic Equipment

EHS Environment, Health and Safety

EIA Environmental Impact Assessment

EIRR Equity Internal Rate of Return

EN European Norm

EOH Equivalent Operating Hours

EPA Environmental Protection Agency

EPC Engineering, Procurement and Construction

ESIA Environmental and Social Impact Assessment

EU European Union

EU ETS EU Emission Trading Scheme

EUR euro

F/S Feasibility Study

FCR Frequency Containment Reserve

FDI Foreign Direct Investment

Fe2+ ; Fe3+ Total Iron

Fe2O3 Ferric Oxide

FIRR Financial Internal Rate of Return

FOB Free On Board

GC Grid Code

Gcal Giga calorie (1,000,000,000 calorie)

GD Governmental Decision

GDP Gross Domestic Product

GEC Green Energy Certificate

GEPP Gas Engine Power Plant

GFPP Gas fired Power Plant

GHG Greenhouse Gas

GNI Gross National Income

GST Generator Step-up Transformer

GT Gas Turbine

GW Giga Watt (1,000,000,000 W)

GWh Giga Watt hour (1,000,000,000 Wh)

HCl Hydrochloric

HF Hydrogen Fluoride

Hg Hydrargyrum (Mercury)

HP Home Page

HRSG Heat Recovery Steam Generator

IEA International Energy Agency

IFC International Finance Corporation

IMF International Monetary Fund

IPB Isolated Phase Busduct

IPP Independent Power Producer

IPPC Integrated Pollution Prevention and Control

IRR internal rate of returns

ISO International Organization for Standardization

JBIC Japan Bank for International Cooperation

JETRO Japan External Trade Organization

JMA Japanese Meteorology Agency

JPY Japanese Yen

K2O Potassium Oxide

kcal kilo calorie (1,000 calorie)

kg kilo gram (1,000 g)

km kilo meter (1,000 m)

km2 square kilo meter (1,000,000 m2)

KPI Key Performance Indicator

kV Kilo Volt (1,000 Volt)

kW kilo Watt 1,000 W

kWh Kilo Watt hour (1,000 Wh)

LCC Life cycle cost

LHV Lower Heating Value

LNRCA Laboratorului National de Referinta pentru Calitatea Aerului

LTPM Long Term Parts Management

LTSA Long Term Service Agreement

m meter

m3 cubic meter

mb Milli bar

mFRR Manual Frequency Restoration Reserve

mg milligram (1/1,000 g)

Mg2+ Magnesiummicro

g microgram (1/1,000,000 g)

MgO Magnesium Oxide

mm millimeter (1/1,000 m)

Mn; Mn2+; Mn3+ ManganeseMOE Ministry of Energy

MOF Ministry of Finance

MPa Mega Pascal (1,000,000 Pascal)

MW Mega Watt (1,000,000 W)

MWh Mega Watt hour (1,000,000 Wh)

Na2O Natrium Oxide

NATO North Atlantic Treaty Organization

NBR National Bank of Romania

NEMS National Energy Weather Model

NEXI Nippon Export and Investment Insurance

NH4+ Ammonium

Ni Nickel

NIS National Institute of Statistics

Nm3 Normal cubic meter

NO Nitric Oxide

NO2 Nitric Dioxide

NO2- NitriteNO3- Nitrate

NOx Nitrogen Oxides

NPP Nuclear Power plant

NPV net present values

O2 Oxygen

O3 Ozone

O&M Operation and Maintenance

ODAF Oil-directed Air-forced type

OECD Organization for Economic Co-operation and Development

OEL Over Excitation Limiter

OEM Original Equipment Manufacturer

OJT On-the-Job Training

ONAF Oil-natural Air-forced type

ONAN Oil-natural Air-natural type

OPCOMOperatorul Pie ei de Energie Electric i Gaze Naturale

(Romanian Gas and Electricity Market Operator)

OPEX Operating Expense

P2O5 Phosphorus Pentoxide

Pb Plumbum (Lead)

pH power of hydrogen

PM Particulate Matter

PO4- Total phosphorusPO43- Soluble orthophosphatesPSHPP Pumped Storage Hydro Power Plant

PSS Power System Stabilizer

QMS Quality Management System

R&D Research and Development

RENEL Regia Na ional de Electricitate (National Electricity Authority)

RH relative humidity

RNMCARe eaua Na ional de Monitorizare a Calit ii Aerului

(National Network for Monitoring Air Quality)

S2- Sulfides and hydrogen sulfide

SCI Site of Community Importance

Se Selenium

SiO2 Silicon Dioxide

SNN Societatea Nationala Nuclearelectrica

SO2 Sulfur Dioxide

SO3 Sulfur Trioxide

SO32- ; SO42- Sulfates

SOx Sulfur Oxide

ST Steam Turbine

TiO2 Titanium Dioxide

TJ TeraJoule

TOE ton oil equivalent

TSS Total Suspended Solids

TWh Tera Watt hour (1,000,000,000,000 Wh)

UAT unit auxiliary transformer

UEL Under Excitation Limiter

UK United Kingdom

UN United Nation

UNCTAD United Nations Conference on Trade and Development

UPS uninterruptible power supply

USA United States of America

US$ United States dollar

VAT Value Added Tax

WB World Bank

Zn Zinc

Table of Contents - 1

Table of Contents

Preface

Project Site Map

List of Abbreviations

Table of Contents

Summary

(1) Background and Necessity of the Project······································································Summary-1

1) Background of the Project ·····················································································Summary-1

2) Necessity of Project·····························································································Summary-1

(2) Basic Policy on Project Content Determination ······························································Summary-2

1) Basic Policy of Project Content Determination ·····························································Summary-2

2) Conceptual Design and Construction of Applicable Equipment ·········································Summary-2

(3) Project Outline·····································································································Summary-3

1) Scope of Project ·································································································Summary-3

2) Project Construction Cost ······················································································Summary-4

3) Preliminary Financial and Economic Analysis ·····························································Summary-5

4) Study of Environmental Social Aspects······································································Summary-9

(4) Project Schedule································································································· Summary-10

(5) Feasibility on Buyer's Credit Request / Implementation··················································· Summary-11

1) Issues on Buyer's Credit Request ··········································································· Summary-11

2) Feasibility on Buyer's Credit Request / Implementation················································· Summary-11

(6) Advantages of Japanese Companies on Technical Aspects ··············································· Summary-12

(7) Detailed Action Plan and Task to realize the Project ······················································ Summary-13

(8) A Map showing the Project Site Location in the Survey Country········································ Summary-14

Chapter 1 Background and Necessity of the Project

(1) Project Background ········································································································· 1-1

(2) Existing Equipment ········································································································· 1-2

1) Plant Site ··················································································································· 1-2

2) General Data ··············································································································· 1-2

3) Power Generation ········································································································· 1-3

4) Fuel Source················································································································· 1-4

5) District Heat System ······································································································ 1-5

(3) Necessity of the Project ···································································································· 1-6

1) EU Directive ··············································································································· 1-6


2) Necessity of the Project ·································································································· 1-6

3) Objectives of the Investment ···························································································· 1-7

(4) Present Situation of the Plant ······························································································ 1-8

1) Electricity & Heat Generation ··························································································· 1-8

2) Fuel Coal ··················································································································1-10

a) Specifications ··········································································································1-10

b) Coal Price Index·······································································································1-10

c) Coal Production········································································································1-11

d) Employees involved in the Mining Activity·······································································1-11

(5) Scope of Study··············································································································1-12

1) Study Contents············································································································1-12

2) Study Schedule ···········································································································1-13

3) Executing Organization ·································································································1-15

Chapter 2 Overview of the Host Country and Sector

(1) Economic and Fiscal Situation ···························································································· 2-1

1) General Information ······································································································ 2-1

a) Geography··············································································································· 2-1

b) Administrative Divisions······························································································ 2-2

c) Population ··············································································································· 2-3

d) Language ················································································································ 2-3

e) Ethnic Structure········································································································· 2-3

f) Religion ·················································································································· 2-3

g) Currency················································································································· 2-4

h) Climate··················································································································· 2-5

i) Politics···················································································································· 2-8

j) Military··················································································································· 2-8

k) Foreign Relations······································································································· 2-8

2) Economic and Fiscal Condition ························································································· 2-9

a) Economic Magnitude ·································································································· 2-9

b) Economic and Fiscal Overview ······················································································ 2-9

c) Labor Cost and Unemployment Rate ···············································································2-12

d) Inflation·················································································································2-13

e) Foreign Direct Investment (FDI) ····················································································2-15

f) Trade·····················································································································2-16

g) Trade with Japan ······································································································2-19

h) Tax ······················································································································2-21

i) Natural Resources······································································································2-23


j) Natural Gas ·············································································································2-25

k) Coal ·····················································································································2-26

(2) Overview of the Power Sector····························································································2-29

1) Brief History of Power Sector in Romania ···········································································2-29

2) Organization in Power Sector ··························································································2-29

a) Ministry of Energy ····································································································2-29

b) Romanian Energy Regulatory Authority (Autoritatea Na ional de Reglementare: ANRE)···············2-30

c) Electricity Market ·····································································································2-30

d) Electricity Generation ································································································2-31

e) Hydro Power Plant Operator (Hidroelectrica)·····································································2-33

f) Nuclearelectrica (SNN) ·······························································································2-33

g) Oltenia ··················································································································2-34

h) Hunedoara··············································································································2-34

i) Transmission System Operator ······················································································2-35

j) Distribution ·············································································································2-36

3) Current Situation of Power Sector ·····················································································2-38

a) Electricity Consumption per Capita ················································································2-38

b) Fuel Resources·········································································································2-38

c) Gas Turbine Combined Cycle ·······················································································2-40

4) Energy Strategy in Romania ····························································································2-41

a) Nuclear Energy ········································································································2-42

b) Natural Gas·············································································································2-42

c) Coal······················································································································2-43

d) Hydro ···················································································································2-44

e) Renewable Energy ····································································································2-44

f) Conclusion··············································································································2-45

(3) Matters relevant to the Deva Project ····················································································2-47

1) Relevant Matters from the Viewpoint of EU Environmental Regulation ········································2-47

2) Relevant Matters of the Future Fuel Supply··········································································2-48

a) Coal······················································································································2-48

b) Natural Gas·············································································································2-49

3) Relevant matters of Location ···························································································2-50

a) From the Viewpoint of Power Supply System ····································································2-50

b) From the Viewpoint of Introduction and Expansion of Renewable Energy ··································2-52

c) From the Viewpoint of Cost Reduction ············································································2-53

d) From the Viewpoint of Heat Supply················································································2-53

4) Current Situation of Deva Power Plant ···············································································2-54

5) Relevant matters of Power Demand and Analysis···································································2-55


a) Power Demand and Future Assumption ···········································································2-55

b) Influence of Renewable Energy·····················································································2-55

c) Effect of Coal-fired Power ···························································································2-55

Chapter 3 Study on the Power Plant

(1) General Explanations on the Power Plant ··············································································· 3-1

1) Introduction ················································································································ 3-1

2) Power Block Configuration (2on1, 1on1) ············································································· 3-1

a) CCPP Configuration ··································································································· 3-1

b) Main Characteristics of CCPP Shaft Configuration······························································· 3-2

c) Recommended Shaft Configuration at the Deva CFPP ··························································· 3-4

3) Gas Turbine ················································································································ 3-5

a) Dual Fuel System······································································································· 3-5

4) Condenser Cooling System ······························································································ 3-5

a) Overview ················································································································ 3-5

b) Condenser Cooling System of Deva CFPP········································································· 3-5

c) Condenser Cooling System of the CCPP to be newly constructed ·············································· 3-7

5) Plant Water Supply and Water Treatment System ··································································· 3-8

6) Fuel Gas Supply System ································································································· 3-8

a) Equipment Specifications of the Deva CFPP······································································· 3-8

b) Equipment Specifications required for CCPP to be newly constructed ········································ 3-8

7) Transmission Line for Generator ······················································································· 3-9

a) Transmission System of the Electrical Power generated by Deva CFPP······································· 3-9

b) Transmission System of the Electrical Power generated by CCPP to be newly constructed················ 3-9

8) Candidate for Existing Equipment to be Reused ····································································3-10

a) Significance of Reusing Existing Equipment ·····································································3-10

b) Equipment subject to Reuse Study··················································································3-10

c) Candidate for Reuse···································································································3-10

d) Equipment not recommended for Reuse ···········································································3-13

(2) Supply Plan of Natural Gas and Water··················································································3-14

1) Supply Plan of Natural Gas ·····························································································3-14

a) Demand of Natural Gas·······························································································3-14

b) Supply of Natural Gas ································································································3-14

2) Fuel Gas Supply System ································································································3-14

3) Supply of Plant Water ···································································································3-15

4) Water Treatment System ································································································3-15

(3) District Heating·············································································································3-16

1) Equipment Specification of District Heat Supply ···································································3-16


a) Possibility of Reuse of Existing Heat Exchanger ·································································3-16

b) Heat Supply Price ·····································································································3-16

2) Demand Record of District Heat Supply and Future Prospects····················································3-16

3) District Heat Supply by CCPP to be newly constructed ····························································3-17

Chapter 4 Conditions of Land and Climate

(1) Site of the power plant······································································································ 4-1

1) Candidate Site of Installation for CCPP to be newly constructed ················································ 4-1

2) Characteristics of Each Candidate Site················································································· 4-1

(2) The Climate of the Power Plant Site······················································································ 4-4

1) Climate······················································································································ 4-4

2) Water Intake Temperature of the River ················································································ 4-6

3) Climate Data ··············································································································· 4-6

a) Air Temperature ········································································································ 4-6

b) Precipitation and Atmospheric Pressure ············································································ 4-7

c) Relative Humidity / Wind Speed····················································································4-10

4) Natural Disasters ·········································································································4-11

(3) Characteristics of Land ····································································································4-13

1) Soil ·························································································································4-13

2) Terrain ·····················································································································4-14

3) Civil Works ···············································································································4-19

a) Layer ····················································································································4-19

b) Foundation work ······································································································4-19

Chapter 5 Basic Design of the Power Plant Equipment

(1) Basic Design of CCPP Equipment························································································ 5-1

1) Project Outline············································································································· 5-1

2) Operation Requirements·································································································· 5-1

a) Plant Requirements····································································································· 5-1

b) Start-up Time Schedule Requirements ·············································································· 5-2

c) Service Life Time ······································································································ 5-2

d) Start-up and Shutdown Time ························································································· 5-3

e) Compliance with the Grid Code······················································································ 5-3

3) Plant Performance········································································································· 5-3

a) Atmospheric Condition································································································ 5-3

b) Fuel Gas Properties ···································································································· 5-3

c) Bottoming System Type······························································································· 5-4

4) Specification of Power Generation Equipment ······································································· 5-5


a) GT and auxiliary systems ····························································································· 5-5

b) HRSG and HRSG Auxiliaries ·······················································································5-17

c) ST and ST Auxiliaries ································································································5-23

d) Generator and Generator Auxiliaries ···············································································5-26

e) Control System of the Power Plant ·················································································5-35

f) Fuel Gas Supply System······························································································5-37

g) Common equipment ··································································································5-38

(2) Alternative Plan ············································································································5-41

1) Characteristics of gas engine ···························································································5-41

2) Comparison of Gas Engine Power Plant (GEPP) and CCPP·······················································5-42

a) Basic specification of power plant equipment·····································································5-43

b) Construction cost ······································································································5-43

c) District heat supply····································································································5-43

d) Ancillary················································································································5-43

e) Environmental Aspect ································································································5-44

f) Required site area······································································································5-44

Chapter 6 Project Implementation and O&M Organization

(1) O&M Organization ········································································································· 6-1

1) Recommended O&M Organization of CCPP ········································································· 6-1

a) Matters to consider in building the O&M Organization of CCPP··············································· 6-1

b) Study of Organization based on CCPP O&M in Other Countries··············································· 6-1

c) Recommended O&M Organization·················································································· 6-3

(2) Recommended O&M System ····························································································· 6-4

1) Operation of an Ideal Thermal Power Plant ··········································································· 6-4

2) Current Status of Deva CFPP···························································································· 6-5

3) Construction of Recommended O&M System········································································ 6-5

(3) Support for building O&M Systems······················································································ 6-6

1) GT Training ················································································································ 6-6

2) LTSA Support by GT manufacturer and Construction of CCPP Remote Monitoring System················· 6-6

3) Support for Quality Control of Power Plant and KPI System Establishment····································· 6-6

(4) Possibility of Japanese Companies to participate in O&M···························································· 6-7

Chapter 7 Project Plan

(1) Project Implementation Program·························································································· 7-1

1) Contract with EPC Contractor··························································································· 7-1

2) Construction Phase········································································································ 7-1

(2) Project Schedule············································································································· 7-1


1) Feasibility Study··········································································································· 7-1

2) Romanian Domestic Approval ·························································································· 7-1

3) EIA ·························································································································· 7-2

4) Contract····················································································································· 7-2

5) From EPC Commencement to Commercial Operation ······························································ 7-2

Chapter 8 Economic and Financial Analysis

(1) Project Cost Estimation ···································································································· 8-1

1) Construction Cost ········································································································· 8-1

2) O&M Cost·················································································································· 8-2

(2) Preliminary Financial and Economic Analysis ········································································· 8-3

1) Methodology of Economic and Financial Analysis ·································································· 8-3

2) Scenarios ··················································································································· 8-3

3) Assumptions ··············································································································· 8-5

a) Price Outlook ··········································································································· 8-5

b) Primary Assumptions ·································································································· 8-8

4) The Results of Analysis ·································································································· 8-9

a) FIRR·····················································································································8-12

b) EIRR ····················································································································8-12

(3) Sensitivity Analysis ········································································································8-13

(4) Conclusion ··················································································································8-14

Chapter 9 Evaluation of Environmental and Social Impacts

(1) Environmental and Social Baseline Conditions········································································· 9-1

1) Overview ··················································································································· 9-1

2) Site Location ··············································································································· 9-1

3) Environmental and Social Baseline Data ·············································································· 9-4

a) Meteorology············································································································· 9-4

b) Geography and Topography ·························································································· 9-5

c) Main Habitats and Vegetation ························································································ 9-6

d) Air Quality ·············································································································· 9-7

e) Water Quality ··········································································································9-10

f) Noise·····················································································································9-11

g) Soil ······················································································································9-11

h) Land Use and Social Infrastructure ·················································································9-13

(2) Environmental Improvements arising with Project Implementation················································9-15

1) Air Quality Improvement ·······························································································9-15

a) Current Air Emission Concentration ···············································································9-15


b) Emission Specification of New Equipment ·······································································9-16

c) Simulation Theory·····································································································9-17

d) Simulation Result – Dispersion from 1 Unit ······································································9-18

e) Simulation Result – Comparison between Baseline and Future Scenario·····································9-19

2) CO2 Emissions Reduction·······························································································9-22

a) Calculation Method ···································································································9-22

b) Calculation Conditions ·······························································································9-23

3) Water Effluent ············································································································9-24

4) Waste Generation and Processing ·····················································································9-25

(3) Summary of the Preliminary Assessment of the Potential Environmental and Social Impacts of the Project

(JBIC Checklist for Thermal Power Plants) ················································································9-27

(4) Overview of Romanian Environmental Legal Standards and Requirements ······································9-36

1) ESIA Legislation ·········································································································9-36

a) Screening ···············································································································9-38

b) Scoping ·················································································································9-38

c) EIA review ·············································································································9-38

d) Information Disclosure and Public Consultations ································································9-38

e) Final Decision··········································································································9-38

f) Monitoring & Control·································································································9-39

g) Typical EIA Report Content·························································································9-39

2) Other Legislation related to Environment, Health and Safety (EHS)·············································9-39

a) Air Quality and Pollution Prevention···············································································9-39

b) Water Quality and Effluents ·························································································9-41

c) Noise ····················································································································9-44

d) Waste Management ···································································································9-44

e) Soil ······················································································································9-44

(5) Conclusions and Considerations regarding the Project Implementation ···········································9-46

Chapter 10 Implementing Organization

(1) Complexul Energetic Hunedoara (CEH) ···············································································10-1

1) General Corporate Information·························································································10-1

2) Financial Conditions of CEH···························································································10-2

3) Insolvency Procedure of CEH··························································································10-4

(2) Organizational Structure for Project Implementation in Romania ··················································10-5

1) Project Implementation Body ··························································································10-5

2) Operation and Maintenance Organization of Power Plant ·························································10-5

(3) Evaluation of the Capacity of the Romanian Executing Body ······················································10-6

1) Capacity to Repay Debt ·································································································10-6


2) Capacity of Equipment Operation and Maintenance································································10-6

a) Maintenance············································································································10-6

b) Operation ···············································································································10-6

Chapter 11 Technological Advantages of Japanese Companies

(1) Participation Forms of assumed Japanese Companies (Investment, Supply of Equipment and Materials,

Operation Management of Equipment, etc.) ···········································································11-1

1) Supply of Equipment ····································································································11-1

2) Collaboration with Third Country ·····················································································11-1

3) Management of Equipment ·····························································································11-1

(2) Advantages of Japanese Companies in Project Implementation ····················································11-2

(3) Strategy Necessary for Japanese Companies to Receive Orders ····················································11-2

Chapter 12 Financial Arrangements

(1) Funding Option ·············································································································12-1

1) Buyer’s Credit ············································································································12-1

2) Bank Loan·················································································································12-2

(2) Feasibility of Fund-Raising ·······························································································12-3

1) B/C ·························································································································12-3

a) To Government of Romania ·························································································12-3

b) To CEH ·················································································································12-3

c) To the Third Organization····························································································12-3

2) B/L ·························································································································12-4

(3) Conclusion ··················································································································12-5

Chapter 13 Action Plan for Project Implementation and Challenges

(1) Effort toward Implementation of the Project···········································································13-1

1) Progress implemented by the Authorities concerned································································13-1

(2) Presence or Absence of Legal and Financial Constrains ·····························································13-2

1) Practical Aspects ·········································································································13-2

a) Implementing Organization ··························································································13-2

b) Licensing Procedure ··································································································13-2

2) Financial Aspects·········································································································13-5

(3) Strategic Significance······································································································13-6

1) Life Cycle Cost ···········································································································13-6

2) Capacity Building of Human Resource············································································13-6

a) GT Training ············································································································13-6

(4) Action Plan and Challenges·······························································································13-8


1) Site Selection and Specification of the Plant ······································································13-8

a) Site Selection········································································································13-8

b) Specification of the Plant ·························································································13-8

2) Implementing Organization and Financial Arrangements·······················································13-9

3) EPC Contract ··········································································································13-9

4) Conclusion ··········································································································· 13-11

Summary

Summary-1

(1) Background and Necessity of the Project

1) Background of the Project

Romania country became the member of the EU in January 2007, the electricity market was completely

liberalized in July 2007 and became a country with advanced power market in the Balkans region. According to the

generation capacity standards, it has 31% of hydropower, 23% of coal fired power and 18% of natural gas fired

power. In terms of equipment capacity, it owns over 20 GW of electric power infrastructure, while the demand is in

excess of supply of 9 GW.

However, thermal power plants, which are the main sources of power supply, are aging, and many of the power

plants do not meet EU emission regulations (Romania joined EU in 2007). Introduction of power generation

facilities with reduced environmental impact by renewal of power plants is an urgent issue.

Under these circumstances, with the aim of responding to the reduction of domestic coal output and

strengthening of the EU regulations on emission gas, Ministry of Energy in Romania has formulated plans to

update some facilities of the Deva coal thermal power plant located in the northwest of the country to a natural

gas-fired combined thermal power plant (CCPP). When Prime Minister Shinzo Abe visited Romania in January

2018, he received a request from Deputy Prime Minister Romania on support concerning this plan by Japanese

companies and governments.

2) Necessity of Project

Deva coal-fired power plant has the following problems.

I) Compliance with EU environmental regulations

II) Deterioration of facilities, increase of maintenance and maintenance expenses

III) Fuel supply uncertainty

IV) Partial load operation

On the other hand, the Deva coal-fired thermal power plant still plays the following important role.

I) System operation service

The Deva coal-fired power plant is located in the central western part of Romania, and only small power

plants scatters around Deva-coal-fired power plant. Particularly, with the increase in recyclable energy

requiring power quality control, the power plant plays an important role in the system operation service.

II) Regional heating in Deva area

It is the most economical system because it supplies hot water by using exhaust heat from the power plant

and it is the only regional heating system in the area.

Given the current situation, it is imperative to renew the aged facilities.

Summary-2

(2) Basic Policy on Project Content Determination

1) Basic Policy of Project Content Determination

a) Study of Project Contents and Technical Aspects

Obtain and analyse data on general power sector of Romania country.

We will investigate the current state of the candidate site for power plant construction and the properties of

natural gas used as fuel and formulate the optimum CCPP specification.

Based on the above specifications, outline processes are formulated.

b) Economic and Financial Analysis

To accumulate construction costs, summary construction costs according to the specifications that have

been formulated are integrated.

For the purpose of studying the feasibility, conduct economic and financial analyses and consider raising

financially available projects.

c) Environmental and Social Considerations

Investigate the impact of this project on the social environment (such as land acquisitions due to the

construction of the project, environmental improvement effect by the project, other social environment

impact).

Investigate licensing and approval relationships in Romania (environmental assessment, related laws,

necessary licenses, etc.).

2) Conceptual Design and Construction of Applicable Equipment

The proposed power generation equipment is highly efficient CCPP and has construction and operational

record.

The main equipment configuration of the power plant equipment is as follows.

Gas turbine

Steam turbine

HRSG

Generator

Relative equipment (fuel gas compressor, fuel gas depressurization station, etc.)

Electrical and control equipment

Summary-3

(3) Project Outline

1) Scope of Project

The main equipment of the highly efficient CCPP consists of gas turbine, exhaust heat recovery boiler, steam

turbine and generator equipment. In addition, it consists of the following facilities.

Gas turbine auxiliaries (air intake facility, lubricating oil facility, etc.)

Steam turbine auxiliaries (lubricating oil system, condenser, boiler feed pump, condensate pump, circulating

water pump, deaerator, condenser washing facility, etc.)

Generator auxiliaries (sealing oil devices, cooling devices, etc.)

Electrical equipment

Control facility

Compressed air facility

Fuel gas compressor facility

Cooling water facility

Disaster prevention equipment

District heat supply equipment

Table 1 shows the outline of the current scope of the construction plan of the CCPP subject to this project.

Table 1 Scope of Implementation of this Project

Item Contents

Area Hunedoara county, Deva

Power output 350 MW class

Scope of work CCPP construction work complete set

Civil work

Detail design of CCPP

Production, transportation and installation work of CCPP facilities (GT, GT

auxiliaries, HRSG, ST, ST auxiliaries, generators, generator auxiliary, electrical

equipment, control equipment, environmental equipment, compressed air

equipment, cooling water equipment, disaster prevention equipment)

Commissioning of CCPP

Out of scope work The following matters shall be implemented by the project implementing entity.

Purchase of land outside the Deva coal-fired power plant accompanying this

project (when necessary)


Summary-4

The properties of natural gas used as fuel gas are confirmed by field survey as follows.

Chemical composition vol. %

Methane 98.9594

Ethane 0.3788

Propane 0.1052

Isobutane 0.0173

Normal butane 0.0146

Isopentane 0.0041

Normal pentane 0.0024

Azole 0.4031

Carbon dioxide 0.1143

total 100.00

Net heating value (LHV)* 49,509 kJ/kg

* calculated by GT-Pro from above chemical component at supply temperature 25.0 ° C

2) Project Construction Cost

The estimation result for the CCPP to be newly constructed is shown in Table 1. The cost is shown in Table 8-1,

which the estimate is based on reusing some equipment of Deva coal thermal power plant.

Table 2 Estimation of the CCPP to be newly constructed

CCPP to be newly constructed:350MW class **

Item Total Cost Breakdown

a) Construction Cost JPY EUR

Foreign

Currency

EUR

Local

Currency

EUR

Power generation equipment/

District Heat supply equipment

14,938,968,086 116,292,761 116,292,761 0

Erection 3,457,862,744 26,917,817 6,521,481 20,396,336

Civil/Buildings 3,156,998,856 24,575,735 0 24,575,735

Engineering 1,532,311,805 11,928,319 11,928,319 0

Admin Cost 6,798,148,673 52,920,354 52,920,354 0

Subtotal 29,884,290,164 232,634,985 187,662,915 44,972,070

b) Reserve Cost * 3,509,786,056 27,322,015 22,040,231 5,281,783

Total 33,394,076,220 259,957,000 209,703,146 50,253,854

*Reserve cost is 11.7% of construction cost. This includes consulting cost, various procedures cost, land acquisition cost

and finance costs, etc.

** These costs are rounded to integers.


Summary-5

3) Preliminary Financial and Economic Analysis

In this report, economic and financial analysis based on the two scenarios, as shown in table 3, will be carried out.

Scenario 1 is defined based on “Energy Strategy to 2030 with a 2050 Prospective”. Scenario 2 is defined based on

the consideration of the current business situation. The main assumptions used in this analysis are shown in Table

4, Table 5 and Table 6. The long-term forecast of CO2 price, wholesale gas, electricity and ancillary services prices

are cited from the study by Tractebel Engie.

Table 3 Outline of Each Scenario

Scenario Outline

Scenario 1

Based on Energy Strategy

a) Cernavoda NPP

Units 1 and 2 are lifetime extension.

Units3 and 4 are commissioned in 2026 and 2036 (~2×700 MW).

b) Tarnita Lapnstesti pumped storage Hydro Power Plant (PSHPP)

PSHPP is commissioned in 2028. (1000MW)

Scenario 2

Considering the Current Situation

a) Cernavoda NPP


b) Tarnita Lapnstesti PSHPP

PSHPP are commissioned in 2028. (1000MW)


Summary-6

Table 4 Summary of the Common Assumptions

Item Assumption*

Power

Production

Output Net 338,354 kW

Efficiency Net 56.03%

CO2 Emission Factor 0.344 ton CO2/MWh

District heating supply 111,000 Gcal/year

Project Period 3 years for construction,

20 years for commercial operation

Discount Rate 6%

Depreciation Period 20 years

Cost Construction Cost 259,957,000 EUR

Operation &

Maintenance Cost

10,000,000 EUR (escalation rate of 1.5% per year

Tax (for corporate) 16%

Fuel Cost 21.22 EUR/MWh average escalation rate of 2.11% per year

CO2 Price 37 EUR/ton average escalation rate of 4.60% per year

Income Heat Selling Price 34.2 EUR/Gcal average escalation rate of 2.11% per year

Cogeneration Bonus not considered

Transformation Rate 1 EUR=128.46 JPY

1 EUR=1.13 USD

1 EUR=4.65 RON

Financing Structure JBIC and Japanese private banks covered by Nippon Export and

Investment Insurance’s (NEXI) buyer’s credit insurance.

JBIC and Banks 85%

Owner 15%

Financing Conditions Interest 3% per year, Commitment fee: 0.5%

Repayment period 12 years

* Each price is based on the reference year 2024.(Source: prepared by the study team)

Summary-7

Table 5 Assumptions for Scenario 1

Item Assumption *

Capacity Factor 2024 - 2026 68.5 %

2027 - 2036 51.4 %

2037 - 2043 58.2 %

Income Electricity

Selling

Price

Whole sale

electricity

Spot 54.46 EUR/MWh (average escalation rate of 2.54% per year)

Forward 38.68 EUR/MWh(average escalation rate of 2.20% per year)

The transaction price of the CCPP to be newly constructed is assumed

54.15 EURO/MWh.

Balancing

market

Upload 16.84 EUR/MWh(average escalation rate of 4.1% per year)

Download 81.96 EUR/MWh average escalation rate of 2.03% per

year

Ancillary

Services

market

FCR** 20.31 EUR/MWh average escalation rate of 2.18% per year

aFRR*** 18.48 EUR/MWh average escalation rate of 1.89% per year

mFRR*** 10.68 EUR/MWh average escalation rate of 2.71% per year

*Electricity selling price is based on the reference year 2024.

** Frequency Containment Reserve (FCR) is included in this analysis. Romania currently lacks a market for FCR, but

the ancillary services structure in compliance with European regulation will be operated in 2021.

*** Frequency Restoration Reserve (FRR) is automatically controlled and manually controlled, and they are shown

as Automatic Frequency Restoration Reserve (aFRR) and Manual Frequency Restoration Reserve (mFRR).


Summary-8

Table 6 Assumptions for scenario 2

Item Assumption *

Capacity factor 68.5 %

Income Electricity

Selling

Price

Whole sale

electricity


Forward 38.68EUR/MWh(average escalation rate of 2.42% per year)


54.15 EUR/MWh

Balancing

market

Upload 16.63 EUR/MWh (average escalation rate of 4.2% per year)

Download 80.94 EUR/MWh (average escalation rate of 2.13%

per year)

Ancillary

Services

market

FCR 20.12 (average escalation rate of 2.32% per year)

aFRR 18.30 EUR/MWh(average escalation rate of 1.94% per year)

mFRR 10.59 EUR/MWh (average escalation rate of 2.75% per year)


** Frequency Containment Reserve (FCR) is included in this analysis. Romania currently lacks a market for FCR, but

the ancillary services structure in compliance with European regulation will be operated in 2021.

*** Frequency Restoration Reserve (FRR) is the automatically controlled and manually controlled, and they are

shown as Automatic Frequency Restoration Reserve (aFRR) and Manual Frequency Restoration Reserve (mFRR).


The results of economic and financial analysis using the above assumptions are shown in Table 7.

Table 7 Results of Economic and Financial Analysis

Scenario Financial Internal Rate of Return : FIRR Equity Internal Rate of Return: EIRR

Scenario 1 8.78% 14.57%

Scenario 2 10.15% 17.27%


The analysis in both scenarios shows high value. This is indicated that this project is financially and

economically viable.

Based on the aforesaid Romania’s Energy Strategy and study by Tractebel Engie, in consideration of the current

business situation, the project in both scenarios shows high value in all measurement indicators including FIRR and

EIRR. This indicates that this project is financially and economically viable. These high IRRs arise from the future

structure that the CCPP to be newly constructed will play a main role in the electricity market as renewable energy

increases, and thus the project is able to make profit. Therefore, this project is important for the electricity market

in Romania. However, in both scenarios, the revenue is low for the first 5 years since the start of commercial

operation, and during this period, it is hard to repay loans. This is because Gas and CO2 cost turns out to be a big

burden to the project and spoils its cash flow. In this regard, scheme to offset Gas and CO2 cost, such as cogeneration

support, is desired.

Summary-9

4) Study of Environmental Social Aspects

Table 8 shows the results of the preliminary evaluation on the environmental and social impact of this project.

As shown in Table 8, it is expected that the environmental burden will not be large.

This project also complies with Romanian laws and regulations on ESIA and EU regulations. Regarding

environmental and social impact, no serious concerns are found based on JBIC thermal power generation

checklist.

Table 8 Preliminary Evaluation Results on Environmental and Social Impact

Major research items Potential

impact

Remark

I) Permit and approval, explanation No applicable

matters

II) Pollution control Small Compared with the current exhaust gas effect, it is

reduced. (CO2 reduction amount: about 500 t / year)

Noise is not an important source of influence

because there is no residence near the power station.

III) Natural environment Small Protected species and endangered species have not

been identified.

IV) Social environment Small Land acquisition or compensation from residents is

expected to be unnecessary.

V) Others Small


Table 9 shows the survey results on permits and approvals in Romania, which is necessary for this project

implementation.

Table 9 Major List of Permits and Approvals required

Permit/Approval Applied to

1 Zonal Urbanism Plan/ Building Permit Local Administration

2 Establishment Authorization ANRE

3 Environmental and Social Impact Assessment Local Administration

4 Grid Connection Transelectrica/ANRE

5 Aviation Easement Civil Aviation Authority

6 Approval by Neighbouring Owners Neighbouring Owners

7 Electromagnetic Interference National Communication Authority

8 Waters Endorsement National Water Administration

9 Emplacement Endorsement State Natural Gas System Operator (Transgaz)

10 Endorsement Agricultural Minister and Rural Development

11 Endorsement for Land Plots Administration of Land Improvement

(Source: prepared by the study team based on Nicolae Legal Report)

Summary-11

(5) Feasibility on Buyer's Credit Request / Implementation

1) Issues on Buyer's Credit Request

We examined borrowers. As a result, it was confirmed that JBIC / NEXI would be able to provide Buyer's Credit

only in the following two cases.

I) Payment guarantee is given by the Romanian government, or the Romanian government

II) Existing organization’s financial situation meets the loan condition of JBIC / NEXI

Obtaining permission (EIA, construction permission etc.) and loans can’t proceed unless the implementing entity

is decided.

As JBIC / NEXI finance to the entity described above, it is necessary for the bankable entity to be the successor

of this project.

2) Feasibility on Buyer's Credit Request / Implementation

It is not the implementing organization established until the licensing procedure and financial arrangement would

be faced.

The MOF would not issue guarantee for the repayment of external debt for implementation of the project.

The export credit provided by JBIC/NEXI is not available to CEH and MOE. However, it is possible to finance

the entity described in 1).

Therefore, if an entity eligible to be financed by JBIC / NEXI becomes the executing agency for this project, it

is possible to request Buyer's Credit. It is necessary to promote this project in cooperation with all the relevant

parties so that this entity becomes the executing agency.

Summary-12

(6) Advantages of Japanese Companies on Technical Aspects

Japanese power generation equipment manufacturers have endeavored to improve performance and improve

reliability while competing with manufacturers in Europe and the United States. In addition, Japanese power

generation equipment manufacturers have constantly made efforts to reduce costs in fierce international

competition. As a result, latest GT has sufficient competitiveness in terms of technology and price. Japanese

company has a comparable power output and thermal efficiency to its competitors, while the EPC cost is slightly

cheaper, which is also considered competitive.

In terms of operation, maintenance, and operation management, the technology and experience of Japanese

power generation equipment manufacturers, power generation companies etc. contribute greatly to support

CCPP's operation, maintenance and operation management of this project.

Summary-13

(7) Detailed Action Plan and Task to realize the Project

Challenges in promoting this project are mainly summarized into the following two points.

Decision of executing agency

Obtaining permission (EIA, construction permission etc.) and loans can’t proceed unless the implementing

entity is decided.

.

Financing

The Ministry of Finance in Romania will not guarantee for loans to this case. Export credit by JBIC / NEXI

is not applicable for CEH and Ministry of Energy.

In light of the necessity of main power supply in this region, supply of district heating and supply of system

operation service, it is necessary to repower the Deva CFPP. Construction of a state-of-the-art natural gas-fired

CCPP is judged to be the most suitable considering the diversification of power generation types, domestically

produced natural resources, environmental impact, and flexible adaptation to the load required by the system

throughout the year. Under these circumstances, prompt response of Romanian organizations, mainly the MOE, to

realize this project is expected.

Summary-14

(8) A Map showing the Project Site Location in the Survey Country

The map showing the project site location is as below.

Figure 1 Map showing the Project Site Location


Hunedoara County

Capital : Bucharest

Deva

Romania

Scale 1:5,000,000

Chapter 1 Background and Necessity of the Project

1-1

(1) Project Background

Romania is located in the southeastern Europe region, is the eastern edge of the EU. Romania is a geopoliticalpoint of view facing the Middle East region through the former Soviet bloc and the Black Sea.Romania has undergone a shift to a market economy with the support of Western countries after the system

change in 1989, and since then, it has maintained solid economic growth. However, in 2009, it fell to negative

growth due to the global economic downturn. The importance of the manufacturing industry is low, the exporting

power has not been strengthened, and there is a delay in infrastructure development including roads as a

development task.

Looking at the power infrastructure that becomes the foundation of the industry in Romania, the demand is limited

to 9 GW regardless of the equipment capacity of 20 GW or more, which is in excess of supply. However, thermal

power plants, which are the main sources of supply, are aging and many do not meet EU emissions regulations

they joined in 2007. Therefore, the urgent issue is the construction of power generation equipment that reduces the

environmental burden caused by renewal of power plants.

Under such backgrounds, with a view to responding to the declining domestic coal output and strengthening EU

regulations on emissions, Romania MOE has formulated plans to update some facilities of the Deva coal fired

power plant (CFPP) located in the northwestern part of the country to a natural gas-fired combined cycle power

plant (CCPP).

Regarding this plan, when Prime Minister Abe visited Romania in January 2018, he received a support request

from Romanian Deputy Prime Minister by Japanese companies and governments.

1-2

(2) Existing Equipment

1) Plant Site

The investment objective, the new thermal power plant of approx.350 Mega Watt (MW) will be located within Deva

coal fired power plants (CFPP), branch of Hunedoara Energy Complex (Complexul Energetic Hunedoara: CEH),

which is the largest power generation equipment in the region.

Figure 1-1 Site Location Map


2) General Data

Deva CFPP consists of

I) Four (4) units with an installed power of 210 MW (units:2,4,5 and 6),

II) One (1) unit with an installed power of 235 MW which has been modernized in 2009 (unit 3), and

III) One (1) unit decommissioned (unit 1),

It connects to the national power grid system through 220 kilo Volt (kV) stations, also provides the district heating

to Deva city with 1,598 contracts, and thus benefits from cogeneration bonus until 2021.

Hunedoara County

Capital CityBucharest

Deva

Romania

1-3

Table 1-1 Deva CFPP

Unit Capacity Steam Operation Rehabilitation decommission

1 - - 1969 - 2012

2 210 MW 13.72 MPa, 550 °C * 1971 - -

3 235 MW ditto 1971 2009 -

4 210 MW ditto 1971 - -

5 210 MW ditto 1977 - -

6 210 MW ditto 1980 - -

Total 1,075 MW

*Mega Pascal: MPa, Degree Celsius: oC


Figure 1-2 Appearance of Deva CFPP

(Source: CEH Home Page (HP) http://www.cenhd.ro/index.php/about-

us/?SGLSESSID=ahj1gjc9e5nsuqc5e6uv85gab7&/1/)

3) Power Generation

Deva CFPP is located in the South-Western part of Transylvania on the Mures River at a distance of 9 kilo meter

(km) from town of Deva, and has been contributed in providing national power generation as well as stabilizing

national power grid of which location there are small generation capacity as compared to south region.

http://www.cenhd.ro/index.php/about

1-4

Due to the structural change in the Romanian economy, the demand of electricity and heat in Romania as well as in

Deva has very much fallen. The structural change in power generation sources also affects the operation of thermal

power plant, which is forced to operate more in partial load, according to the increase of renewable energy.

Deva CFPP only generate electricity 885 Giga Watt hour (GWh) in 2017, which is only 12% of the record value

7,247 GWh in 1985, units in operation are only 3 of the original 6 units, mainly modernized unit 3 and secondary

unit 2 and unit 5.

Although the generation of the Deva CFPP has been decreased, it should be noticed that in the central-west of the

country there is a few power plants, which obviously creates an imbalance within the National power network and

the Deva CFPP has a strategic importance from the technological point of view to mitigate the imbalance and

stabilize the National power network. At the same time, it plays an important role to provide load frequency control

capability which becomes more and more necessary due to the increase of renewable energy. In 2017, Deva CFPP

has provided wide range of electricity from approx. 60 MW to 350 MW.

However, it is in a serious situation of operation of the power plants, since generation units in Deva CFPP were built

during 1971 – 1980 and very much deteriorated. Total efficiency of the power plant has been dropped by approx.

9% from its original value, resulting in higher fuel consumption.

The environmental regulation of large combustion plant, Directive 2010/75/EU, is making the situation much worse.

For strictly environmental and economic reasons, CEH was forced to retire from operation of Deva CFPP unit 1,

and other units (unit 2, 5 and 6) are to be decommissioned. To meet the European Union (EU) Directive, extremely

large rehabilitation works will be implemented such as replacement of Low-Nitrogen Oxides (NOx) burners,

mechanical works at coal mills and air fans, wet flue gas desulfurization, in conjunction with increasing the degree

of Electrostatic Precipitator particulate retention and disposal of ash and slag in dense fluid (semi-dry), which

requires huge amount of investments and long outage period.

4) Fuel Source

Fuel coal for Deva CFPP is extracted from the collieries in Jiu Valley area owned by CEH. Mining activity is also

in a very difficult economic and financial situation. Relatively higher cost of production of coal led to the lack of

financial possibilities, resulting in decrease in coal production capacity as well as the decrease of coal reserves in

Deva CFPP.

In order to compensate the lack of coal, the purchase of coal from other sources would be required. However there

is no reasonable source for the coal with such low calorific value which is specific to the existing boiler.

1-5

(Source: EURACOAL HP https://euracoal.eu/info/country-profiles/romania/)

5) District Heat System

The centralized supply district heat system of Deva has been provided from Deva CFPP via hot water pipeline since

1985. From 1997, the vast majority of industrial units connected to Deva district heat system changed their field of

activity or even disappeared, which effectively led to the disappearance of technological steam consumption and to

significant reduction of the demand of hot water.

Thus, in 2017, the annual heat supply from Deva CFPP is 131,425 Giga calorie (Gcal), which is 26% of the record

number 513,462 Gcal in 1996. This fall in the demand of hot water is due to the change of circumstance that the

consumers who decided to disconnect from district heat system and adopted the individual heating solution.

The demand of hot water decreases, however district heat system is basically an efficient energy system as it utilizes

waste/low-value heat from thermal power plant effectively and it should be used continuously especially effective

use of energy and existing assets being considered.

Figure 1-3 Map of Coal Field in Romania

https://euracoal.eu/info/country-profiles/romania/)

1-6

(3) Necessity of the Project

1) EU Directive

The new environmental standards for all the large combustion plants in Europe has been approved on 31 July 2017

by the commission implementation decision 2017/1442 establishing best available technology (BAT) conclusions

under the Directive 2010/75/EU, which stipulates the limits of the materials in exhaust gas as the following table.

Table 1-2 Regulatory Value of each Pollutant

No Pollutant Material Limit Monitoring Due

1 NOx 175 mg/Nm3 *1 permanent 17 Aug.2021

2 Sulfur Dioxide (SO2) 130 mg/Nm3 permanent ditto

3 Particulate Matter (PM) 12 mg/Nm3 permanent ditto

4 Hydrargyrum (Hg, Mercury) 7 g/Nm3 *2 permanent ditto

5 Hydrochloric (HCl) 5 mg/Nm3 every 3 months ditto

6 Hydrogen Fluoride (HF) 3 mg/Nm3 every 3 months ditto

7 Carbon monoxide (CO) 100 mg/Nm3 permanent ditto

*1 milligram: mg, Normal cubic meter: Nm3

*2 micro:


2) Necessity of the Project

Deva CFPP has the following serious situations;

I) Compliance with EU environmental regulations to be tightened in August 2021 as the above-mentioned,

which requires extremely large rehabilitation works and investment costs,

II) Deterioration of the equipment, which causes larger operation cost (larger fuel consumption and the hugest

scale of repair works),

III) Lack of coal supply, due to the relatively higher production cost of fuel coal, CEH’s mining activity is

financially difficult situation, and there is no market in the world for fuel coal with such lower calorific value,

and

IV)Partial load operation which makes lower efficiency and a decrease in income, due to the increase of

renewable energy which receives priority connection right over fossil fuel power plants.

1-7

While, Deva CFPP still takes the following important role.

I) Ancillary Service in national power grid

Deva CFPP stands in the central-west of Romania where there is a few and smaller power plants, and

contributes to mitigation of the imbalance in the national power grid, especially under the circumstance of

large amount of renewable energy introduced which requires more load frequency control capability.

II) District heat system in Deva region

This is the most economical heat supply system since the heat is generated by the exhaust gas from Deva

CFPP, and only the solution in the region.

Once again, following is the problem of the Deva CFPP;

I) too expensive to be economically competitive,

II) the equipment exceeding those designed life time,

III) lack of coal supply,

IV)EU environmental regulations to be tightened in August 2021, and

V) ancillary service required to operate more flexibly

It is reiterated that the replacement of the old generation equipment with new thermal energy generation units is

absolutely necessary.

Considering the diversification in electricity generation equipment, the availability of domestic natural resources

and environmental friendly equipment, the ministry of energy (MOE) has the plan to install most advanced natural

gas fired combined cycle power plant within the Deva CFPP site, which shall be designed to operate with a required

load flexibly by the national grid over the year.

Thus, the Memorandum of Understanding was made in May 2018 among MOE, CEH and ITOCHU Corporation

for ITOCHU’s preparation of the study on the new high efficiency 350 MW class generation equipment whose goal

is to evaluate the technical and financial aspects required to carry out the investment works in the optimal and

feasible solution.

For the investment of new equipment most economical operation and the relatively shorted pay-back period shall

also be considered. With regard to the ancillary service to be provided, the new equipment shall be designed

compliant to the provisions of the grid code in Romania.

3) Objectives of the Investment

The following issues are mainly focused for the investment:

I) Improvement of the technical and economic parameters performed by the most advanced technology,

II) Environmental improvement by means of the fuel conversion from coal to gas and high-efficient operation,

III) Reinforcement of the ancillary service to the national grid, and

IV)Heat supply to the region continuous and safety manners with a minimal cost.

1-8

(4) Present Situation of the Plant

1) Electricity & Heat Generation

Figure 1-4 shows the transition of the amount of electricity generation after the start of the commercial operation of

the Deva CFPP and Figure 1-5 shows the transition of the heat supply amount.

As can be seen from Figure 1-4, after Romania joined EU in 2007, electricity generation gradually decreased to

below 1,000 GWh in the recent years. And as can be seen from Figure 1-5, heat demand is decreasing mainly due

to the individual heating solution.

Figure 1-4 Electricity Generation of Deva CFPP

GWh

(Source: provided by CEH)

Figure 1-5 Heat Generation of Deva CFPP

GCal


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000 Max.7,247

885

0

100,000

200,000

300,000

400,000

500,000

600,000Max.513,462

131,425

1-9

Monthly generation data for both electricity and heat in 2017 are shown Figure 1-6 and 1-7.

As shown in Figure 1-6, the Deva CFPP has a large amount of power generation in summer and winter. As shown

in Figure 1-7, heat supply tends to be higher in winter.

Figure 1-6 Monthly Electricity Generation of Deva CFPP in 2017

Mega Watt hour (MWh)


Figure 1-7 Monthly Heat Generation of Deva CFPP in 2017

Gcal


103,905

75,634

55,574

93,99098,853

53,585

89,263

78,717

50,22754,606 57,252

73,516

0

20,000

40,000

60,000

80,000

100,000

120,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

23,307

16,580

13,003

10,448

6,8305,060 4,711 4,658 5,152

10,140

13,763

17,773

0

5,000

10,000

15,000

20,000

25,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

1-10

2) Fuel Coal

a) Specifications

The following table shows the specifications of the fuel coal for Deva CFPP, and the Drummond coal in Colombia

for comparison. The 20% interest of Drummond coal is held by Itochu Corporation and the coal is exported to

European market.

As shown in the table below, the coal properties of Deva are low-grade coals different from coal properties

commonly traded in international markets, and it is difficult to procure coal of the same grade from the international

market.

Table 1-3 Coal Properties

Parameter UnitDeva Drummond

Base Maximum Minimum Base Value

Calorific Value kcal/kg * as received 3,700 3,200 as received 6,030

* kilo calorie (kcal), kilo gram (kg)

(Source: prepared by the study team based on the data provided by CEH)

b) Coal Price Index

”Coal Price Indexes” are used worldwide when trading coal. “Coal Price Indexes” are the spot prices per ton given

in United States dollar (US$) and are published by Argus Media Limited and McCloskey.

As shown in the table below, fuel coal with calorific value of 3,200 - 3,700 kcal/kg does not have a market in the

world, and from that point also it is difficult to procure the coal used in Deva from the international market.

Table 1-4 Coal Price Indexes

Code Price Index Trade Term Calorific Value

1 API 2 ARA * Cost, Insurance & Freight (CIF) ARA 6,000kcal/kg

2 API 3 South Africa Free on Board (FOB) Richards Bay 5,500kcal/kg

3 API 4 South Africa FOB Richards Bay 6,000kcal/kg

4 API 5 Australia FOB Newcastle 5,500kcal/kg

5 API 6 Australia FOB Newcastle 6,000kcal/kg

6 API 8 South China Cost & Freight (CFR) South China 5,500kcal/kg

7 API 10 Colombia FOB Puerto Bolivar 6,000 kcal/kg

8 API 12 India CFR India 5,500kcal/kg

* Amsterdam/Rotterdam/Antwerp: ARA


1-11

c) Coal Production

The breakdown of hard coal /lignite is not available. The production of coal/lignite in Romania is given in the

following table. As shown in Figure 1-8, production volume is on a downward trend overall.

Figure 1-8 Transition of Coal/Lignite Production in Romania

million tons oil equivalent (TOE)

(Source: BP Statistical Review of World Energy June 2018)

d) Employees involved in the Mining Activity

Figure 1-9 shows the transition of the number of coal miners. As shown in Figure 1-9, in the last 20 years, the

average numbers of employees decreased from 37,808 in 1997 to 3,022 at the end of the first semester of 2018.

Figure 1-9 Numbers of Employees

(Source: CEH HP)

6.9 7.06.6

5.9

6.76.3

4.74.4

4.74.2

4.7

3.03.54.04.55.05.56.06.57.07.5

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

37,808

23,265

19,914

18,114

17,943

17,337

16,516

14,900

13,364

12,041

11,740

11,533

10,742

9,200

8,459

7,433

5,095

4,741

4,493

4,083

3,552

3,022

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1-12

(5) Scope of Study

1) Study Contents

In this survey, the study team first investigated Romania's energy sector policy, master development plan, market

trends, competitive environment, etc. Next, in order to promote the adoption of eco-friendly high efficiency gas

turbine technology boasted by Japan with the Northern Deva Power Station in Romania as a target project, in

addition to examining the technical aspects, the study team also examined from the aspects of fuel supply and

environmental and social considerations. In addition, the study team clarified the technology and business

problems and risks of this project, and verified the financial and economic feasibility etc. on the premise of

utilizing optimal financing tools. In the study, the study team conducted a survey with the aim of contributing to

the development of Romania and the reduction of the environmental burden by implementing consistently high-

quality proposals from the delivery of equipment. The study team also conducted a survey with the aim of

contributing to expanding exports of high-quality infrastructure in our country.

Specifically, the following survey was conducted.

I) The situation of Romania and the energy sector

Romanian economic and financial situation

Situation of the electric power sector

(current situation and problems of market and policy, future plans, competitors etc.)

Analysis of current situation of target area

II) Project outline, technical aspects examination

Project outline, background, necessity

Optimum equipment specifications and composition

(including comparative advantage analysis with competitors)

Fuel supply status

Issues and proposals for operation and maintenance

(including comparative advantage analysis with competitors)

Possibility of Japanese companies to participate in operation and maintenance

Environmental impact analysis such as the reduction of the Carbon Dioxide (CO2) etc.

III) Examination of environmental and social aspects

Analysis of the current environment and society

The project’s impact on environment and society

Positive effect on the environment such as CO2 reduction

Outline of the relevant laws and regulations and investigation of necessary measures for the project

Investigation of necessary measures based on guidelines of Japan's export credit institution, etc.

1-13

IV) Project implementation schedule

V) Implementation capacity of the Romanian executing agency

Analysis of the Romanian Electricity Market System

Capability analysis of the existing agency (construction, operation, maintenance etc.)

VI) Financial and economic analysis and the prospect of procurement

Project cost (Capital Expenditure (CAPEX) and Operating Expense (OPEX))

Sensitivity analysis on power selling price, fuel price etc.

Review of financial arrangement plan and its feasibility

Cash flow analysis etc.

VII) Action plans and its bottleneck

Activities of Japanese companies, Romanian government agencies and Romanian executing agencies

Legal and financial constraints in Romania

Future actions etc.

2) Study Schedule

The implementation schedule of this study is shown below.

1-14

Figure 1-10 Overall Study Schedule


Survey consideration item ·event

2018 2019

June July Aug Sep Oct Nov Dec Jan Feb

1. The situation of Romaniaand the energy sector

2. Project outline, technicalaspects examination

3. Examination ofenvironmental and socialaspects

4. Project implementationschedule

5. Implementation capacity ofthe Romanian executingagency6. Financial and economicanalysis and the prospectof procurement

7. Action plans and itsbottleneck

Field survey *** *** ***

Report submissionDraft Final

1-15

3) Executing Organization

The structure of the study team is shown below. Kansai Electric Power Co., Ltd. plays the main role, and a portion

of this study is shared by ITOCHU Corporation, Japan NUS Inc., TRACTEBEL and NICOLAE.

Figure 1-11 Study Implementation Organization


Team LeaderPower development plan / Financialeconomic analysis / Cost integration,

financingKatsutoshi Yurugi

Business administration group

Mechanical placement plan /master machine design

Masaaki Miura

Mechanical BOP Equipment /Fuel / Water Supply and

EquipmentEisuke Matsuoka

Electric Design / TransformerEquipment

Rie Taniguchi

Instrumentation equipmentKensuke Okumura

Deputy Team LeaderOperation management / Environmentalsocial aspect / Implementation capacity

analysisNaoki Fujimura

Kansai Electric Power Co., inc.Thermal Power Division

ITOCHU CorporationCollect local information, appoint

appointments, negotiate supportAnalysis of finance and economics

and consideration of project's fundingplan

Translation of related laws andregulations

JAPAN NUS Co., ltd.Environmental and social

consideration analysis

Mechanical Leader

Kei Tanaka

Electrical Leader

Toshihiko Ogata

TRACTEBEL ENGINEERINGS.A.

Gathering and analyzinginformation on Romanian relatedlaws and regulations, local situation

NICOLAELegal Advisory

Services

Chapter 2 Overview of the Host Country and Sector

2-1

(1) Economic and Fiscal Situation

1) General Information

a) Geography

Figure 2-1 shows the location of Romania. As shown in Figure 2-1, Romania is located in south east Europe at the

strategic crossroads of the EU, the Commonwealth of Independent States (CIS) and the Middle East. With 19.52

million inhabitants (as of 1st January 2018), the country is the seventh most populous EU member state, and its

capital and largest city, Bucharest, is the sixth largest city in the EU.

Figure 2-1 Location of Romania

(Source: HP https://www.tripsavvy.com/maps-of-eastern-europe-4123431)

It extends approximately 800 km from east to west (43~49 degrees east longitude) and 450 km from north to south

(20~30 degrees north latitude) with a total land area of 238,391 square kilo meter (km2), which is almost same area

as the Honshu island.

https://www.tripsavvy.com/maps-of-eastern-europe-4123431)

2-2

Romania’s relief is very diverse and complex. 31% of the area is covered by mountains (with heights between 800

and 2,543 meter (m)), 36% by hills and tablelands, and the rest of 33% by plains (under 200 m elevation).

The Danube Delta, located north of the Plateau of Dobrudja, is the youngest geographical feature in Romania. It

encompasses the three main arms, Chilia, Sulina and Sfantul Gheorghe, through which the Danube flows into the

Black Sea. The Danube Delta stretches on the Romanian territory over an area of 4,340 km2, of which 78% is subject

to flooding.

Romania’s flora and fauna are very rich and variegated, given the geographic position and the diversity of natural

conditions.

b) Administrative Divisions

Figure 2-2 shows the administrative divisions of Romania. As shown in Figure 2-2, the administrative organization

of Romania features 41 prefectures, and Bucharest, the capital city. In the prefectures, the basic administrative units

are the towns and communes (made of several villages). There are 263 cities and towns, of which 80 municipalities,

and 2,685 communes with over 13,285 villages.

Besides Bucharest, which has a population of nearly 2.1 million, there are 17 cities with over 100,000 inhabitants,

7 of which exceed 300,000. (Source: Embassy of Romania to Japan HP)

Figure 2-2 Administrative Divisions

(Source: HP http://www2m.biglobe.ne.jp/ZenTech/world/map/Romania/Counties_Map_of_Romania.htm)

Ukraine

HungaryMoldova

Ukraine

Serbia

Bulgaria

Romania Map

http://www2m.biglobe.ne.jp/ZenTech/world/map/Romania/Counties_Map_of_Romania.htm)

2-3

c) Population

Figure 2-3 shows the population of Romania. As shown in Figure 2-3, after the largest number was recorded in

1990, the population has been decreasing gradually. In 2017, the population was 19.64 million.

Figure 2-3 Population of Romania

(Source: International Monetary Fund (IMF) HP http://www.imf.org/external/datamapper/datasets/WEO)

d) Language

The national language is Romanian (a neo-Latin language of the Romance languages family).

e) Ethnic Structure

Romanian is the largest and accounts for 89.5%. The others are Hungarians (6.5%: including Szecklers) and others

(4%: Roma, Tatars and etc. ).

f) Religion

Most of Romanian citizens keep Christiane identities (Eastern Orthodox: 86.7%, Roman-Catholic: 4.7%; Protestant:

3.2%, and etc.).

0

5

10

15

20

25

30Actual Forecast

million

joining the EU as of January 1, 2007

http://www.imf.org/external/datamapper/datasets/WEO)

2-4

g) Currency

The Romanian leu (plural: lei) is the currency of Romania. Its currency code is RON. RON is subdivided into 100

bani (singular: ban). The word “bani” is also used for “money” in the Romanian language.

Figure 2-4 shows the RON vs US$, EUR and JPY historical chart. US$ 1 is RON4.0776, euro (EUR) 1 is

RON4.6519 and Japanese Yen (JPY) 100 is RON3.6172 with the exchange rate announced by the National Bank of

Romania (NBR) on 5 December 2018.

Figure 2-4 RON vs US$, EUR and JPY Historical Chart

RON/Currency

(Source: NBR HP http://www.bnr.ro/Exchange-Rates--3727.aspx)

0

1

2

3

4

5

6

Jan-

08Ju

n-08

Nov

-08

Apr

-09

Sep-

09Fe

b-10

Jul-1

0D

ec-1

0M

ay-1

1O

ct-1

1M

ar-1

2A

ug-1

2Ja

n-13

Jun-

13N

ov-1

3A

pr-1

4Se

p-14

Feb-

15Ju

l-15

Dec

-15

May

-16

Oct

-16

Mar

-17

Aug

-17

Jan-

18Ju

n-18

Nov

-18

EUR Yen100 US$

http://www.bnr.ro/Exchange-Rates--3727.aspx)

2-5

h) Climate

Figure 2-5 shows Romania map of Köppen climate classification. Romania has a temperate-continental climate with

moderate features which is characteristic for Central Europe, with hot summers, long, cold winters and very distinct

seasons. Abundant snowfalls may occur throughout the country from December to mid-March, especially in the

mountainous areas.

The annual average temperature depends on latitude and ranges from 8°C in the North and 11°C in the South, with

temperatures of 2.6°C in the mountains and 12°C in the plains. In general, the warmest areas are in the southern

districts of Romania.

Figure 2-6 shows the average temperature of Bucharest and Tokyo in the last 10 years. Daytime temperatures vary

from 0-5°C in the winter and 25-30°C in summer months. In the northern and eastern mountainous districts of

Transylvania, it can be cooler with moderate daytime temperatures and cool nights in the summer and temperatures

far below zero in the winter.

Figure 2-7 shows the monthly mean precipitation of Bucharest and Tokyo. Annual average rainfall is about 700

milli meter (mm), more in the mountains (up to 1000 mm) and less on the coast (around 400 mm). It can rain

throughout the year; spring is the driest season. In summer, showers and thunderstorms are common, especially in

the mountains.

2-6

Figure 2-5 Romania Map of Köppen Climate Classification

(Source: Romania National Meteorological Administration)

2-7

Figure 2-6 Average Temperature in the last 10 years

(Source: Japanese Meteorology Agency (JMA) HPhttp://www.data.jma.go.jp/gmd/cpd/monitor/climatview/frame.php

http://www.jma.go.jp/jma/menu/menureport.html

Figure 2-7 Monthly Mean Precipitation

(Source: JMA http://www.data.jma.go.jp/gmd/cpd/monitor/nrmlist/NrmMonth.php?stn=15420

http://www.jma.go.jp/jma/menu/menureport.html)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecAHT Bucharest 2.3 5.4 12.7 18.7 23.9 27.3 31.0 31.0 26.1 16.9 11.7 5.3AHT Tokyo 9.8 10.7 14.1 18.9 23.2 26.3 30.3 31.8 28.2 22.4 17.3 12.2ALT Bucharest -6.0 -3.4 0.5 4.6 9.6 13.9 15.8 15.3 11.3 5.3 2.1 -2.9ALT Tokyo 2.6 3.1 6.0 10.7 15.8 19.9 23.8 25.1 21.7 16.3 10.5 5.1

-10

-5

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35AHT Bucharest AHT Tokyo ALT Bucharest ALT Tokyo

Average Highest Temperature: AHTAverage Lowest Temperature: ALT

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecRainfall in Bucharest 33.8 34.1 38.6 52.4 56.4 79.2 63.1 51.4 54.5 49.5 43.0 44.2Rainfall in Tokyo 49.9 79.3 99.1 152.4 162.8 166.6 117.4 139.5 213.0 293.2 93.8 82.2

0

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100

150

200

250

300Amount(mm)

http://www.data.jma.go.jp/gmd/cpd/monitor/climatview/frame.php

http://www.jma.go.jp/jma/menu/menureport.html

http://www.data.jma.go.jp/gmd/cpd/monitor/nrmlist/NrmMonth.php?stn=15420

http://www.jma.go.jp/jma/menu/menureport.html)

2-8

i) Politics

The constitution stipulates that Romania is a sovereign, independent, unitary and indivisible republic state headed

by the President.

The state is organized according to the principle of separation and balance of the powers - the Legislative, the

Executive and the Judiciary - in the framework of constitutional democracy, guaranteed by political pluralism.

The President of Romania represents the Romanian state and guarantees the national independence, unity and

territorial integrity of the country. The President is elected for a five-year term (maximum 2 times) by direct elections.

The current President of Romania is Klaus Iohannis since 21 December 2014.

The Parliament of Romania (4-year term) has two houses, the Senate (137seats) and the Chamber of Deputies (334

seats).

The Government of Romania, headed by the Prime Minister, entrusted by the President of Romania with forming

the Cabinet and with the Governance Program endorsed by Parliament by a vote of confidence.

j) Military

The Land Forces, Air Forces and Naval Forces of Romania are collectively known as the Romanian Armed Forces.

The new armed forces include 90,000 men and women, of whom about 75,000 are military personnel (the remaining

15,000 or so are civilians). 60,000 of the 90,000 are active forces; 30,000 comprise the territorial reserve. Out of the

75,000 troops which comprise the actual military, about 45,800 make up the Land Forces, 13,250 serve as the Air

Forces and 6,800 are in the Naval Forces; the remaining 8,800 serve in other fields.

The conscription system was abolished in 2006.

k) Foreign Relations

Romania is a member of the United Nation (UN) (joining in 1955)

After the end of the Cold War, Romania developed closer ties with Western Europe and the United States of America

(USA), eventually joining North Atlantic Treaty Organization (NATO) in 2004, and hosting the 2008 summit in

Bucharest.

The country applied in June 1993 for membership in the EU and became an Associated State of the EU in 1995, an

Acceding Country in 2004, and a full member on 1 January 2007.

2-9

2) Economic and Fiscal Condition

a) Economic Magnitude

Figure 2-8 shows the nominal Gross Domestic Product (GDP) of Romania and neighboring countries in 2016

reported by IMF. As shown in Figure 2-8, the nominal GDP of Romania in 2016 was US$ 187,593 million which

was 52nd biggest in the world and just the same economic magnitude of Hyogo prefecture in Japan.

Figure 2-8 Nominal GDP of Romania and Neighboring Countries in 2016

(Source: IMF World Economic Database October 2017)

b) Economic and Fiscal Overview

Following the collapse of communist rule in 1989, Romania has undergone a long period of economic transition to

a market economy, which has not been smooth. Since 2000, there has been more progress.

An extensive programme of economic reforms included the privatization of several state-owned enterprises and the

restructuring of Romania’s energy, mining and industrial sector. The economy had been growing at an average

annual rate of 6% from 2000 until the economic crisis hit Romania’s economy hard in the final quarter of 2008.

187,593

124,380

93,263

52,390

37,745

0 50,000 100,000 150,000 200,000 250,000

Romania

Hungary

Ukraine

Bulgaria

Serbia Unit: US$ million

2-10

Figure 2-9 shows the real GDP growth of Romania. As shown in Figure 2-9, Romania officially entered recession

in mid-May 2009. Romania signed a EUR 20 billion stand-by agreement with the EU and the IMF, which has helped

stabilize the economy. After that, the Romanian economy recovered and grew by 3.9% in 2015.

Figure 2-9 Real GDP Growth (%)

(Source: IMF World Economic Database October 2017)

Table 2-1 shows the Romanian key macroeconomic and financial indicators in the last 12 years. Private consumption

was the main source of growth. The pace of growth was accelerated to 4.8% in 2016 in response to the significant

fiscal stimulus including tax cuts and increases of the minimum wage and public wages. Economic growth is

estimated to 5.5% in 2017 and 3.3~4.4% in the following 5 years.

The EU has allocated EUR 23 billion to Romania through the year 2014 - 2020 structural and cohesion fund

(provided to Member States whose Gross National Income (GNI) per inhabitant is less than 90 % of the EU average

and available for investments related to energy or transport that benefit the environment in terms of energy efficiency,

use of renewable energy, developing transport and supporting intermodal transport) programme.

The current account and external debt are on a recovery trend compared to around the 2008 economic crisis.

-15

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0

5

10

Actual Forecast

Bankruptcy ofLeaman Brothers

Collapse ofCommunist Rule

2-12

c) Labor Cost and Unemployment Rate

Figure 2-10 shows the hourly labor cost in EU member countries. As shown in Figure 2-10, the mean labor cost in

industry was EUR6.3 per hour (4 times or much lower than EU average of EUR26.8 per hour) in 2017.

Figure 2-10 Hourly Labor Cost in EU Member Countries

(Source: Eurostat HP http://ec.europa.eu/eurostat/web/labour-market/publications)

0

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[EUR]

http://ec.europa.eu/eurostat/web/labour-market/publications)

2-13

Figure 2-11 shows the unemployment rate in Romania. As shown in Figure 2-11, unemployment rate in Romania is

rather lower among EU member countries.

Figure 2-11 Unemployment Rate in Romania

(Source: National Institute of Statistics (NIS) HP http://www.insse.ro/cms/en/content/official-statistics-romania)

d) Inflation

Consumer prices in Romania increased 5.0 % year-on-year in March of 2018, accelerating from a 4.7 % gain in the

previous month and beating market expectations of 4.9 %. It was the highest inflation rate since June 2013, as prices

rose at a faster pace for both non-food (6.6 % from 6.3 % in February) and food products (4.0 % from 3.7 %).

Meanwhile, services inflation was steady at 2.9 %.

Figure 2-12 shows the inflation rate vs policy interest rate in Romania. As shown in Figure 2-12, inflation Rate in

Romania averaged 45.45 % from 1991 until 2018, reaching an all-time high of 316.90 % in November of 1993 and

a record low of -3.50 % in May of 2016.

7.2 7.36.4

5.66.5

7.0 7.26.8 7.1 6.8 6.8

5.95.0 4.8

0

2

4

6

8

10

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

[%]

http://www.insse.ro/cms/en/content/official-statistics-romania)

2-14

Figure 2-12 Inflation Rate vs Policy Interest Rate in Romania

(Source: NBR HP http://www.bnro.ro/Monetary-Policy--3318.aspx

http://www.bnro.ro/Inflation-Reports-3343.aspx)

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Poricy Interest

Inflation

%

http://www.bnro.ro/Monetary-Policy--3318.aspx

http://www.bnro.ro/Inflation-Reports-3343.aspx)

2-15

e) Foreign Direct Investment (FDI)

FDI flows and stock in 2009 – 2016 are shown below. As shown below, FDI is on an increasing trend.

Figure 2-13 FDI Flows in 2009 – 2016

(Source: FDI in 2016 published by NBR)

The breakdown of FDI stock by country of origin is shown below. As shown below, the top five countries were

Netherlands, Germany, Austria, France and Cyprus.

Figure 2-14 FDI in Romania by County-origin at 2016 End


1,730 1,832 1,505830

2,4272,846

3,5954,341

1,627432

195 1,659

285

-425 -134

176

-500

0

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1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2009 2010 2011 2012 2013 2014 2015 2016

Equity Credit[EUR million]

Netherlands, 24.3

Germany, 13.2

Austria, 11.9France,6.9Cyprus, 6.5

Italy, 6.3Luxembourg, 4.3

Switzerland, 3.6

Greece, 2.8Belgium, 2.7Spain, 2.4

UK, 2.4

USA, 1.9Czech, 1.7

Hungary, 1.4

Other,7.7

Total EUR 70.1 billion

[%]

2-16

The breakdown of FDI in Romania by main economic activity is shown below. As shown below, utility sector such

as electricity, gas and water supply is one of largest recipients.

Figure 2-15 FDI in Romania by Main Economic Activity at 2016 End


f) Trade

The transition of Romania's trade value is shown in the figure below. As shown below, export and import amount

has been rapidly increasing since Romania became an EU acceding country. Major export items are machinery and

electronic parts, transportation equipment, food, clothing, chemical products, etc., and major imports are machinery

and electronic parts, transportation equipment, chemical products, foods, metal products and the like.

Manufacturing,32.0

Construction,14.0

Trade, 12.8

FinanceInsurance,

12.6

Electricity, Gas,Water, 9.6

Science &Technology, 5.6

Information &Technology, 5.2

Agriculture, 2.6

Mining, 2.6 Transportation, 1.7 Food Service, 0.6 Other,0.7

Total EUR 70.1 billion

[%]

2-17

Figure 2-16 Trade Volume in Romania (1990-2016)

(Source: UNCTAD HP http://unctadstat.unctad.org/wds/TableViewer/tableView.aspx)

Table 2-2 shows the top 10 countries importing from Romania. Table 2-3 shows the top 10 countries exporting to

Romania. As shown in Table 2-2 and Table 2-3, major export countries are Germany, Italy, France, Hungary, and

United Kingdom (UK), and major importing countries are Germany, Italy, Hungary, France and Poland.

Table 2-2 Top 10 Countries Importing from Romania

(Unit: EUR million)

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Germany 5,009 5,554 5,442 6,735 8,424 8,369 9,181 10,100 10,782 12,348

Italy 5,033 5,183 4,461 5,159 5,800 5,443 5,619 6,146 6,786 6,660

France 2,272 2,478 2,378 3,103 3,380 3,150 3,353 3,561 3,715 4,147

Hungary 1,691 1,708 1,266 1,782 2,568 2,419 2,456 2,662 2,937 2,974

UK 1,221 1,103 970 1,351 1,448 1,622 2,024 2,149 2,380 2,486

Bulgaria 941 1,390 1,106 1,337 1,636 1,735 1,691 1,772 1,822 1,851

Turkey 2,072 2,205 1,450 2,564 2,780 2,462 2,485 2,312 2,150 1,819

Spain 679 776 868 1,132 1,101 1,108 1,203 1,391 1,579 1,720

Poland 637 669 647 982 1,075 1,087 1,170 1,289 1,463 1,655

Czech 407 526 480 - 754 812 985 1,180 1,365 1,515

(Source: JETRO HP https://www.jetro.go.jp/world/europe/ro/gtir.html)

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Export (FOB) Import (CIF)[US$ billion]

EU Acceding Country

http://unctadstat.unctad.org/wds/TableViewer/tableView.aspx)

https://www.jetro.go.jp/world/europe/ro/gtir.html)

2-18

Table 2-3 Top 10 Countries Exporting to Romania

(Unit: EUR million)

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Germany 8,845 9,189 6,741 7,818 9,405 9,511 10,227 11,187 12,482 13,810

Italy 6,529 6,384 4,551 5,420 6,251 5,983 6,000 6,263 6,857 6,910

Hungary 3,566 4,177 3,250 4,061 4,783 4,916 4,564 4,591 5,005 5,061

France 3,260 3,205 2,401 2,772 3,173 3,096 3,201 3,320 3,519 3,736

Poland 1,732 1,926 1,384 1,749 2,173 2,333 2,457 2,713 3,051 3,464

Netherlands 1,858 2,104 1,505 1,642 1,758 1,920 2,038 2,186 2,524 2,766

Turkey 2,764 2,776 1,460 1,721 1,903 1,841 1,860 1,939 2,283 2,554

Austria 2,483 2,742 1,855 1,914 2,198 2,284 2,193 2,204 2,427 2,406

Bulgaria 609 976 942 1,440 1,582 1,535 1,521 1,680 1,862 2,095

Russia 3,235 3,336 1,502 2,039 2,092 2,391 2,361 2,277 1,986 1,975

(Source: JETRO HP https://www.jetro.go.jp/world/europe/ro/gtir.html)

https://www.jetro.go.jp/world/europe/ro/gtir.html)

2-19

g) Trade with Japan

Figure 2-17 Japan’s Trade Volume with Romania

(Source: Trade Statistics of Japan HP http://www.customs.go.jp/toukei/srch/index.htm?M=23&P=0)

Figure 2-17 shows the Japan’s trade volume with Romania. In 2016 Romania's exports to Japan amounted to EUR

215.53 million, up 2.2% from the previous year, imports to Japan amounted to about EUR 332.1 million, up 13.6%

the same.

Table 2-4 shows the major trade goods between Romania and Japan. Looking at exports by major items in Table 2-

4, wood and charcoal (composition ratio 75.7%) increased by 10.3% from the previous year. Grains (the same 4.5%)

decreased by 57.8%. This is due to the fact that wheat and maslin increased more than 6 times, while barley

decreased by 95.1% and remarkably decreased. Optical equipment and precision devices (the same 2.1%) increased

by 27.2%, transportation equipment (the same 1.7%) also increased 9.8%, and tractor and automobile parts 27.7%

increase contributed to this. In addition, medicine (the same 1.5%) and natural honey (the same 1.4%) increased 2.3

times and 2.8 times, respectively. Meanwhile, rubber and the same product (the same1.9%) decreased by 11.3%,

and electrical machinery and electrical equipment (the same 1.2%) decreased by 47.5%, both exports declined.

Looking at imports by major items, reactors, boilers, machinery (the same 23.0%) increased by 12.5%, and electrical

machinery and electrical equipment (the same 20.7%) also increased by 7.7%. Transportation equipment (the same

18.8%) increased by 42.8%, as passenger cars increased by 18.5%, and tractors and automobile parts increased by

60.6% to a large extent. In addition, glass and the same product (the same 3.1%) increased 56.9%, organic chemicals

(the same 1.2%) increased 81.3%. In addition, iron and steel (the same 1.1%) and steel products (the same 5.8%)

decreased by 52.3% and 11.1%, respectively.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Export (FOB) 2.58 1.24 2.38 7.56 9.53 19.7 21.8 29.9 46.5 20.9 24.3 36.5 29.2 30.2 35.3 39.4 42.0 44.6Import (CIF) 5.20 5.56 6.39 7.28 11.3 17.1 21.3 26.4 22.5 20.4 26.0 34.8 34.3 49.7 52.3 52.5 51.9 64.1

0

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Export (FOB) Import (CIF)[Yen billion]

http://www.customs.go.jp/toukei/srch/index.htm?M=23&P=0)

2-21

h) Tax

EU Directives are applicable and extensive tax treaties are available (with around 90 countries, including Japan with

favorable withholding tax rates) in Romani.

Table 2-5 shows the taxes in Romania. As shown in Table 2-5, corporate income tax rate is 16.0%. Corporate income

tax is one of the lowest in Europe. Various tax incentives (for example extra deduction on research and development

(R&D) activities, corporate income tax exemption for 10 years for companies performing exclusively R&D,

exemption on reinvested profit, income tax exemption for software developers, etc.) and state aid schemes are

available.

2-22

Table 2-5 Taxes in Romania

Tax or Mandatory Contribution Rate Remark

1 Corporate Income 16.0% 7 years carry forward of tax losses

for Microenterprise (sales less than EUR1 mil) 1% 3% if no employees

2 Mandatory Social Contributions 37.25%

of which Pension Fund Contribution 25% born by Employees

Health Fund Contribution 10% born by Employees

Work Insurance Contribution 2.25% born by Employers

3 Personal Income Tax 10.0% effective on 1st January 2018

4 Withholding Tax - Dividends 5% Remittance to Japan Max.10%

- Interest/Royalties/Services 16% ditto Max.10% (Royalty 15%)

5 Value Added Tax (VAT) 19%

VAT for Medicines, Food, Beverage, etc. 9% excluding Alcohol

VAT for Book, Museum, Movie, Sport, etc. 5%

6 Local Tax (Building, Land, Car, Advertise, et.) various

7 Contribution for Environmental Fund shall be filed monthly

a Air Pollutants (PM, NOx, SOx, etc.) * various RON 0.02~20 per kilo gram (kg)

b Import or Manufacture of Hazardous Substance 2.0% levied on Price

c Waste (Ferrous & Non-Ferrous) Service Company 3.0% levied on Profit

d Woodwork Sales Company 2.0% levied on Sales

e Import or Manufacture of Mineral Oil RON0.3/kg

f Supplier of Plastic Package RON2/kg less than legal recovery ratio

g Tire Manufacture RON2/kg less than recycle target

h Manufacturer of Plastic Bag not made from Bio RON0.1/pack

* PM: RON0.02/kg

NOx, Sulfur Oxide (SOx): RON0.04/kg

Persistent Organic Pollutants: RON20/kg

Plumbum (Lead: Pb): RON12/kg, Cadmium (Cd): RON16/kg, Hg: RON20/k


2-23

i) Natural Resources

Romania is rich country in natural resources such as crude oil, coal and natural gas among east European countries.

In 2015 Rumanian self-sufficient rate of coal, crude oil, natural gas and uranium were 80.45%, 35.58%, 98.44%

and 100%, respectively.

Figure 2-18 shows the primary energy consumption vs real GDP in Romania. As shown in Figure 2-18, after three

consecutive years of decline, the primary energy consumption in 2015 increased by 1.08% compared with the

previous year and reach 31.91 million TOE.

Generally, it is said that the growth of energy consumption is correlate with that of GDP. However, being compared

to the figure in 2011, the primary energy consumption in 2015 decreased by 10.87%, while the real GDP grew by

11.34% in the same period.

Figure 2-18 Primary Energy Consumption vs real GDP in Romania

(Source: International Energy Agency (IEA) HP

https://www.iea.org/statistics/statisticssearch/report/?country=Romania&product=indicators)

The consumption and production of natural resources in Romania during the period of 2006~2015 are shown in

Table 2-6. As shown in Table 2-6, consumption and production of coal are on a decreasing trend in Romania.

100

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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Energy Consumption Real GDP[US$ billion][TOE million]

https://www.iea.org/statistics/statisticssearch/report/?country=Romania&product=indicators)

2-25

j) Natural Gas

Romania occupies the third place in the EU in term of natural gas reserves, after the Netherlands and the United

Kingdom. This makes it different from its neighbors, as it needs to import only a small quantity of natural gas in

recent years.

At this moment two companies account for 95% or more of Romanian gas production: state-owned Romgaz and

OMV Petrom, a subsidiary of Austrian company OMV. Imports (usually in the winter) come from Russia, although

not directly from Gazprom, but through intermediary companies, like WIEE (owned by Gazprom in hungary) and

Conef Gaz.

Table 2-7 shows the production and consumption of natural gas in Romania. As shown in Table 2-7, although

Romania was one of the first countries that used natural gas in Europe, nowadays consumption and production in

Romania are decreasing. The Energy Strategy drafted in 2016 end by the government envisioned a continuing

decrease in gas production and consumption from onshore reserves in the period 2016-2030, mainly because of the

shutdown of large gas consuming industries. While the government permits by the same strategy announced in

September 2018 those industries to consume gas as the raw material whose products are exported.

This is a continuation of a trend that started in the 1990s, when production declined from almost 25.5 billion cubic

meters (m3) in 1990 to around 10.2 billion m3 in 2015, with the share of natural gas declining from 60% to 34.4%

of total energy production.

Consumption has decreased from almost 32 billion m3 in 1990 to 11.0 billion m3 in 2014, the biggest decrease of

consumption in the EU, where the majority of countries increased their consumption of natural gas. For example,

Poland saw its gas consumption grew from 10 billion m3 in 1990 to 15 billion m3 in 2014.

Romania’s gas imports have followed the same path, with volumes decreasing from almost 6.5 billion m3 in 1990

to 0.5 billion m3 in 2014. In 2015, imports accounted for only 1.8% of Romania’s consumption.

Table 2-7 Production and Consumption of Natural Gas in Romania

(UNIT: billion m3)

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Production 10.7 10.5 10.4 10.0 10.1 10.1 10.0 10.2 10.2 9.1 10.3

Consumption 14.8 14.1 12.3 12.5 12.9 12.5 11.4 11.0 10.4 10.4 11.9

(Source: BP Statistic Review of World Energy June 2018)

According to the Energy Strategy published by the government in September 2018, the total proved reserves of

natural gas in Romania is estimated at 153 billion m3.

2-26

Romania could almost double its natural gas production to about 20 billion m3 a year by 2025, helped by new

offshore discoveries in the Black Sea. It is expected that two companies could be producing natural gas offshore in

Romanian Black Sea waters by 2021.

Black Sea Oil & Gas, controlled by private equity firm Carlyle Group LP, has almost finalized its project and could

start producing roughly 1 billion m3 of gas per year by the start of 2020 at the latest. Meanwhile, a joint venture of

OMV Petrom and ExxonMobil could start extracting 6 billion m3 per year in 2020-2021

Figure 2-19 shows the map of gas field in Romania. Romania plans to start work this year on its section of a new

EU-backed natural gas pipeline to connect Bulgaria, Romania, Hungary and Austria and ease reliance on Russian

gas.

Figure 2-19 Map of Gas Field in Romania

(Source: HP http://peopletales.blogspot.jp/2013/10/oil-industry-in-romania-world-premieres.html)

k) Coal

Total hard coal resources are estimated to be 2,446 million tons of which 252.5 million tons are commercially

exploitable within the currently leased areas, although as little as 11 million tons might be economically recoverable.

Figure 2-20 shows the map of coal field in Romania. Proven reserves of lignite total 280 million tons, with a further

9,640 million tons of resources. Of these deposits, 95% are situated in the Oltenia mining basin where more than

80% can be surface mined. The remaining lignite deposits have low economic potential, explaining why extraction

in most other areas has stopped.

http://peopletales.blogspot.jp/2013/10/oil-industry-in-romania-world-premieres.html)

2-27

(Source: EURACOAL HP https://euracoal.eu/info/country-profiles/romania/)

I) Hard Coal

Back in January 2011, the National Hard Coal Company had seven underground coal mines (Lonea, Petrila,

Livezeni, Vulcan, Paro eni, Lupeni and Uricani). In September 2012, these mines were merged with hard CFPP to

create the COMPLEXUL ENERGETIC HUNEDOARA (Hunedoara Energy Complex), a state-owned electricity

and heat producer headquartered at Petro ani in the Southern Carpathians.The company accounts for approximately

2% of Romanian electricity generation, with a capacity of 595MW and about 6,300 employees.

Meanwhile, the CEH entered into insolvency in June 2016. Restructuring continues according to Council Decision

787/2010/EU with aid approved by European Commission decision C (2015) 2652.

II) Lignite

COMPLEXUL ENERGETIC OLTENIA (Oltenia Energy Complex) is Romania’s largest producer of coal-based

energy with an installed capacity of 3,570MW. The company is responsible for 99% of national lignite production.

Its mines and power plants provide direct jobs for 15,500 people.

Figure 2-20 Map of Coal Field in Romania

https://euracoal.eu/info/country-profiles/romania/)

2-28

Reserves of lignite are concentrated in a relatively small area of 250 km2 where lignite is mined in twelve opencast

pits licensed for another fifty years. These reserves provide a long-term, secure supply for the adjacent Turceni,

Rovinari, Craiova and I alni a power plants

2-29

(2) Overview of the Power Sector

1) Brief History of Power Sector in Romania

Under the planned economy of Socialism the Romanian state-owned autonomous company in the electricity field,

Regia Na ional de Electricitate (National Electricity Authority: RENEL was established. In 1998, following the

RENEL restructuring programme, the National Electricity Company (CONEL) and Societatea Nationala

Nuclearelectrica (SNN) were established.

CONEL comprised three subsidiaries: SC Termoelectrica SA for generation of electrical and thermal power in

thermal power stations, SC Hidroelectrica SA for generation of electricity in hydro-electrical stations, and SC

Electrica SA for electricity distribution and supply.

SNN is the only nuclear power station in Romania and the only Canada Deuterium Uranium (CANDU) reactors

operating in Europe. SNN is now registered with the Register of Commerce, Chamber of Commerce and Industry,

as a state-owned company.

In 2000, CONEL was split into the following independent and fully state-owned trading companies: S.C.

Termoelectrica S.A., S.C. Hidroelectrica S.A., S.C. Electrica S.A. (Distribution and Sales) and C.N. Transelectrica

S.A., as Transmission System Operator, with its subsidiary and the electricity market administrator, Operatorul

Pie ei de Energie Electric i Gaze Naturale Romanian Gas and Electricity Market Operator: OPCOM . As result

of such split, CONEL was dissolved.

2) Organization in Power Sector

a) Ministry of Energy

The Ministry formulates programme and strategy in the energy sector, representing the state and the government, at

a national and international level in energy-related matters, monitoring the energy sector and the compliance with

international treaties in the energy sector.

The Ministry has published a draft of its Energy Strategy toward 2030, including an outlook until 2050 and being

elaborated based on quantitative modeling, which required macroeconomic, industrial, and employment impact

assessments of the energy scenarios and give stress tests for the power and the gas supply systems. The roadmap is

based on five strategic objectives, which have been combined to resemble a building in Figure 2-21.

Finally, the ministry has published “Energy Strategy to 2030 with a 2050 Prospective” on 19th September 2018.

2-30

Figure 2-21 Five Key Strategic Goals

(Source: Energy Strategy toward 2030 published by the MOE)

b) Romanian Energy Regulatory Authority (Autoritatea Na ional de Reglementare: ANRE)

Regulatory authorities for both electricity and natural gas sectors were established in Romania (the electricity

regulator ANRE in 1998 and the natural gas regulator ANRGN (Romanian Natural Gas Regulatory Authority) in

2000) with the mission to create and implement the appropriate regulatory system to ensure the proper functioning

of the electricity and natural gas sector and markets. In 2007, the two regulatory bodies merged under the name of

ANRE and in 2010 ANRE took over the activity of the Romanian Agency for Energy Conservation (ARCE),

therefore assuming the responsibility to monitor and implement energy efficiency measures and promote the use of

renewable energy sources to the final consumer.

Under the laws in Romania ANRE is an autonomous administrative body under Parliamentary control, entirely self-

financed and independent as regards its decision-making process, organization and functioning whose scope of

activity is to issue, approve and monitor the implementation of the national-wide binding regulatory framework

required for the proper functioning of the electricity, heat and natural gas sectors and markets in terms of efficiency,

competition, transparency and consumer protection.

c) Electricity Market

In Romania, which joined the EU in January 2007, the electricity market was completely liberalized from July 2007

and became a country with an advanced electricity market in the Balkans area.

It is OPCOM that manages the electricity market, and operates Day-ahead market, the futures market, the CO2

emission rights market, and the green certification market. The demand supply adjustment market is handled by

Transelectrica, a state-owned enterprise that is a transmission system operator.

2-31

The structure of the current power sector can be classified into the following seven types in Table 2-8.

Table 2-8 Classification in Romanian Power Sector

Classification State/Private Numbers

1 Thermal Power Plant Operators State-owned 6

2 Combined Heat and Power (CHP) System Operators Private 20

3 Independent Power Producer (IPP) Private 170

4 Hydro Power Plant Operator (Hidroelectrica) State-owned 1

5 Nuclear Power Plant Operator (SNN) State-owned 1

6 Transmission System Operator (Transelectrica) State-owned 1

7 Distribution Companies Private 8


d) Electricity Generation

The available capacity installed in 2016, and the generation capacity of 2000 – 2015 are shown below. Following

hydro power generation plants, coal power generation plants have the second largest available installed capacity.

Figure 2-22 Available Installed Capacity (MW) in 2016

(Source: National Report 2016 published by ANRE)

Hydro 6,417MW31%

Coal 4,922MW23%

N.Gas 3,738MW18%

Wind 3,008MW14%

Nuclear 1,413MW7%

Solar 1,304MW6%

Biomass 126MW1%

Total 20,928MW

2-32

Figure 2-23 Generation Capacity (GWh) in Romania

(Source: IEA HP

https://www.iea.org/statistics/statisticssearch/report/?country=Romania&product=electricityandheat)

The market share in 2017 is shown below.

Figure 2-24 Market Share by Producers in 2017

(Source: Presentation by Oltenia Clean Coal Technology Seminar 22 February 2018)

51,93453,86654,73555,14056,49959,413

62,69761,67364,956

58,01460,97962,217

59,04558,887

65,67666,296

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Coal Oil N.Gas Biofuel Nuclear Hydro Solar Wind[GWh]

Hidroelectrica,24.14%

Oltenia, 23.88%

Nuclearelectrica,18.53%

OMV Petrom 5.51%

Elcen, 3.98%

Romgaz, 3.17%

Enel Green, 2.40%Hunedoara, 1.98%

Tomis, 1.32%

Ovidiu, 0.98%Govora, 0.95%

EDPR, 0.91%

Veolia, 0.65%

Crucea,0.55% Cernavoda, 0.53%

Other, 10.53%

https://www.iea.org/statistics/statisticssearch/report/?country=Romania&product=electricityandheat)

2-33

e) Hydro Power Plant Operator (Hidroelectrica)

Hidroelectrica is the largest energy producer in Romania, using water from all around the country. It generates about

25-30% of the national electricity consumption, and even more in the cases of heavy rain or snow falls.

Hidroelectrica has an installed capacity of 6,400 MW and produces about 15-20 Tera Wat hour (TWh) per year. The

largest hydro power plant in Romania is Iron Gates, situated on the Danube, which is exploited equally by Romania

and Serbia. It produces about 40% of the energy generated by Hidroelectrica.

Because of a bad management scheme in the last 10 years, Hidroelectrica is now in insolvency since January 2014,

for the second time. The first time was from June 2012 to June 2013.

Hidroelectrica is a state-owned company, with 80% held by the MOE and 20% by the Proprietatea Fund. The

Government wants to list the 10% or 15% of the company’s shares, on the Bucharest Stock Exchange when the

company exits insolvency, which was expected in the second half of 2015.

f) Nuclearelectrica (SNN)

SNN owns and operates Cernavoda Nuclear Power Plant (NPP) unit 1 and 2, 700MW each. 1st unit started the

commercial operation in December 1996 and 2nd unit in September 2007.

Since July 1998, SNN is registered with the Register of Commerce, Chamber of Commerce and Industry as a state

owned company. SNN is reporting to the Minister of Energy. The state owns 82.48% of SNN’s share, Fundul

Proprietatea 9.10% and other shareholders 8.42%.

The main activity fields of SNN are centered on the generation electrical and thermal power, and manufacturing of

nuclear fuel. SNN also coordinates the investment-development activities as well as the human resources training

and optimization.

SNN has two branches.

I) Cernavoda NPP division

- operating Cernavoda NPP units 1 and 2 and the auxiliary services

- performing the preservation of unit 3, 4 and 5 until completion and commissioning

II) FCN – Pitesi, the Nuclear Fuel plant

- manufacturing nuclear fuel for Cernavoda NPP units 1 and 2

In November 2010 receiving the favorable approval of the European Commission for the project of Cernavoda NPP

units 3 and 4 under the European Atomic Energy Community Treaty, SNN signed Memorandum of Understanding

for the development, construction, operation and decommissioning of Cernavoda NPP units 3 and 4 with China

General Nuclear Power Corporation in November 2015.

2-34

g) Oltenia

Table 2-9 shows the power plants operated by Oltenia. Oltenia EC whose object of activity is to generate electricity

and thermal energy based on lignite and to operate lignite mining and reprocess, was established by merger of

Rovinari EC, Turceni EC, Craiova EC, Isalnita EC and Oltenia national lignite society.

Oltenia EC operates 12 power units whose total capacity is 3,570 MW.

Table 2-9 Power Plants operated by Oltenia

Power Plant Capacity Boiler Turbine Operation

1 Rovinari 4 x 330MW Babcock IMBG 1976-1979

2 Turceni 4 x 330MW Vulkan (Babcock) IMBG 1980-1987

3 Isalnita 2 x 315MW MAN Alstom 1987-1988

4 Craiova 2 x 150MW Vulkan IMBG 1987-1988

(Source: Presentation by Oltenia in Clean Coal Technology Seminar 22 February 2018)

h) Hunedoara

Table 2-10 shows the power plants operated by Hunedoara. Hunedoara EC was established in November, 2012, by

merging of Paroseni and Mintia power plants. The four viable mines in the Jiu Valley - Lonea, Livezeni, Vulcan and

Lupeni are going to be included in this structure.

Hunedoara provides about 2% of Romania's electricity generation with an existing installed capacity of 1,075 MW,

being the only major producer of electricity in the center and northwest of the country.

The setting-up of Hunedoara was required by the fact that in Romania there is no company generating electricity

from hard coal which is enough large to participate to regional and international projects for the benefit of Romanian

market.

Table 2-10 Power Plants operated by Hunedoara

Power Plant Capacity Boiler Turbine Operation

1 Paroseni 150MW Soviet Ganz 1964

2 Minta-Deva 210MWx4+235MW Soviet LMZ 1969-1980

(Source: prepared by the study team based on Hunedoara HP)

2-35

i) Transmission System Operator

National Transmission System Operator, Transelectrica was founded in July 2000 further to unbounding the former

Romanian Electricity Authority (CONEL) into four independent entities: Transelectrica (electricity transmission

and dispatching), Electrica (distribution), Hidroelectrica (hydro generation) and Termoelectrica (thermal

generation).

Thus, the transmission and system services were completely separated from the generation, distribution and supply

activities. From the technical view point, the electric power system remained unitary, managed by a unique operator

– Transelectrica.

The shares are listed to the Bucharest Stock Exchange since August 2006.

Transelectrica operates according to the provisions of the Electricity Law and the secondary legislation, particularly

the Transmission and System Operator Licenses, the Transmission Grid Code (GC), Electricity Market Commercial

Code and the Metering Code.

The key function of Transelectrica is as follows:

I) Transmission and System Operator of the Romanian System

û The grid infrastructure

û The dispatching infrastructure

û Capacity allocation on interconnections

û Green certificate

II) Balancing market Operator

û The balancing market platform

III) Commercial Operator of the Electricity Market – OPCOM, a legal subsidiary

û Trading platforms

û Green certificates trading platform

IV) Metering Operator of the Wholesale Electricity Metering Division OMEPA

û Metering system

V) Telecommunication and IT Operator – TELETRANS, a legal subsidiary

û The optic fiber, digital telecom system

Figure 2-25 shows the map of national grid operated by Transelectrica.

2-36

Figure 2-25 National Grid Map

(Source: Transelectrica HP)

j) Distribution

In 2001 on the reorganization of “Electrica” SA, 8 distribution companies are established. “Electrica” SA was split

into 8 branches in Table 2-11:

Table 2-11 Regional Distribution Companies in Romania

Area Name Registered Office

1 North-West Electrica Transilvania Nord Cluj-Napoca

2 Center Electrica Transilvania Sud Bra ov

3 East Electrica Muntenia Nord Ploie ti

4 South-South-East Electrica Muntenia Sud Bucharest

5 South-West Electrica Banat Timi oara

6 North-East Electrica Moldova Bac u

7 South Electrica Oltenia Craiova

8 South-East Electrica Dobrogea Constan a

(Source: Electrica HP https://www.electrica.ro/en/the-group/about/hystory/)

https://www.electrica.ro/en/the-group/about/hystory/)

2-37

Figure 2-26 shows the map of distribution companies in Romania. As shown in Figure 2-26, 4 regional distribution

companies are bought by European utility companies; such as Electrica Moldova by E.ON (Germany), Electrica

Banat and Electrica Dobrogea by Enel (Italy), and Electrica Oltenia by CEZ (Czech).

Figure 2-26 Map of Distribution Companies in Romania

(Source: The Diplomat – Bucharest HP http://www.thediplomat.ro/features_0605.htm

http://www.thediplomat.ro/features_0605.htm

2-38

3) Current Situation of Power Sector

a) Electricity Consumption per Capita

The following figure shows the electricity consumption (kilo Watt hour: kWh) per capita of Romania and the EU

countries. The figure of Romania is the lowest among the EU countries.

Figure 2-27 Electricity Consumption per Capita in Romania and the EU Countries

[kWh/Capita]

(Source: IEA 2014 Key World Energy Statistics)

b) Fuel Resources

As shown in the following figure, 42% of all generation equipment in Romania is thermal power equipment.

It is quite rare case among the eastern Europe countries that Romania is rich country in fossil fuel as shown in table

1-6 for example in 2015 the self-sufficiency rate of coal, natural gas and crude oil were 80.5%, 98.4 and 35.6 ,

respectively. However those reserves are not many and Romania tries to develop new coal mines, accelerate the

introduction of renewable energy and promote energy conservation according to National Energy Strategy

2007~2020.

Then, there stipulates in Energy Strategy 2011~2035 announced by the government in April 2011 that electricity

consumption in 2035 is expected to increase to 88.5 Tera Wat hour (TWh) (62% up from that in 2010), and the share

of nuclear and renewable energy shall be increased:

Nuclear: 20.3% (2009) 42.4% (2035), Hydro: 29.2 24.3%, Renewable Energy: 0% 16.8%, Thermal:

50.5% 16.5%

2,602

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Aus

tria

Bel

gium

Bul

garia

Cro

atia

Cyp

rus

Cze

chD

enm

ark

Esto

nia

Finl

and

Fran

ceG

erm

any

Gre

ece

Hun

gary

Irela

ndIta

lyLa

tvia

Lith

uani

aLu

xem

burg

Mal

taN

ethe

rland

sPo

land

Portu

gal

Slov

akia

Slov

enia

Spai

nSw

eden UK

Rom

ania

2-39

Figure 2-28 Generation Capacity in 2017

(Source: Transelectrica Preliminary Report 2017)

SNN has a hard time in development of Cernavoda NPP units 3 and 4 with Chinese company.

Figure 2-29 shows the installed capacity of renewable energy in Romania 2017. As shown in Figure 2-29, regarding

renewable energy, thanks to the introduction of “Green Energy Certificate (GEC)” 9,069MW renewable energy

have started commercial operation as of end of 2017. However, since July 2013 the issuance of GEC has been

restricted and it is concerned if the pace of implementing renewable energy would slow down.

Figure 2-29 Installed Capacity of renewable energy in Romania 2017

(Source: Transelectrica Preliminary Report 2017)

Thermal,25.1TWh, 42%

Hydro, 14.5TWh,24%

Nuclear,10.6TWh, 18%

RE, 9.6TWh16%

Total 59.8 TWh

Wind 6,049MW67%

Solar 2,757MW30%

Biomas 263MW3%

Total 9,069MW

2-40

On the other hand, it is important for Romania to utilize thermal power plants which now occupies 50% or less of

total generation capacity and can complement nuclear or renewable energy. In Romania coal and natural gas are

used for electricity generation. In 2012 CFPP accounted for 39.7% of total generation capacity and natural gas fired

power plants (GFPP) 12.8%. CFPP is still majority in thermal power plants and GFPP gradually increases a presence.

c) Gas Turbine Combined Cycle

Table 2-12 shows the Combined Cycle Power Plant (CCPP) installed in Romania. As shown in Table 2-12, oil and

gas giant Petrom, subsidiary company of OMV Austria, has the largest GFPP in Romania.

In 2015 in Romania 98 5% of domestic consumption of natural gas was produced in the country by Petrom and

state-owned company Romgaz equally.

Petrom has started commercial operation of 860MW CCPP in Brazi 50km north from Bucharest since August 2012.

It accounts for about 25% of the installed capacity of natural GFPPs in Romania (3,738MW, as of end of 2016) and

Petrom supplied 5.51% electricity of domestic consumption in 2017 together with other electricity generating

equipment.

Due to the increase of renewable energy whose electricity generation is instable depending on the climate, large

capacity CCPP is expected to take an important role by means of balancing the supply and the demand in electricity

market.

In June 2017 Romgaz ordered a new CCPP in Iernut (a part of Mures County located in the central part of the

Transylvanian Plateau). Work commenced later in 2017, and the new plant is expected to start commercial operation

in 2019.

Table 2-12 CCPP installed in Romania

Name Owner

ManufacturerCommercial

OperationGas Turbine * HRSG**Steam

Turbine***

1 Bucharest West 186MW (1-1-1) Elcen GE Alstom Skoda 2009

2 Brazi 860MW (2-2-1) Petrom GE Doosan GE 2012

3 Iernut 430MW (2-2-1) x 2 Romgaz GE Alstom GE construction

* Gas Turbine (GT)

** Heat Recovery Steam Generator (HRSG)

*** Steam Turbine (ST)


2-41

4) Energy Strategy in Romania

In September 2018, the MOE has published “Energy Strategy of Romania for 2019-2030, with an outlook to 2050.

Table 2-13 shows the forecast of electricity generation to 2050. As shown in Table 2-13, the demand of electricity

is expected to be 77.1 TWh in 2030.

Table 2-13 Forecast of Electricity Generation to 2050

(Unit TWh)

2020 2025 2030 2035 2040 2045 2050

Nuclear 11.5 11.5 17.4 23.2 23.2 23.2 23.2

Hydro 15.8 17.5 17.6 17.6 17.6 17.6 17.6

Wind & Photovoltaic 8.8 9.6 10.5 11.4 12.3 13.1 14.0

Coal 17.5 17.8 15.8 14.9 14.9 14.9 14.9

Oil 0.4 0.4 0.4 0.4 0.4 0.4 0.4

Gas 14.0 14.5 14.5 14.5 14.5 14.5 14.5

Biomass 0.9 0.9 0.9 0.9 0.9 0.9 0.9

Total 68.9 72.2 77.1 82.9 83.8 84.6 85.5

(Source: Energy Strategy of Romania for 2019-2030, with an outlook to 2050)

Figure 2-30 shows the availability of existing power generation equipment. The demand of electricity is expected

to increase. By 2030 due to the ending their lives and or EU emission regulations, fossil fuel-fired equipment are

expected to be decommissioned, and therefore those modernizations or replacements shall be realized in compliant

to EU emission standard.

2-42

Figure 2-30 Availability of Existing Power Generation Equipment


a) Nuclear Energy

Nuclear power is a strategic option for Romania.

Making a timely extension of Cernavoda Unit 1's lifetime will mobilise nuclear expertise in Romania. During the

retrofitting of Unit 1, it will be necessary to provide energy from alternative sources or from import. For this reason,

postponing the definitive withdrawal of some coal or gas capacities could be justified.

Expanding nuclear capabilities at Cernavoda is a strategic decision. The project of two new units will make good

use of the existing infrastructure and will capitalize on the significant reserves of heavy water produced in Romania.

In addition, it will ensure the continuity and development of Romanian expertise in the nuclear sector, as well as

the premises for reuniting the complete nuclear cycle in Romania.

The Cernavoda Unit 3 and Unit 4 projects are the largest potential projects in Romania in the coming decades.

b) Natural Gas

Romania has a net installed capacity of natural gas of about 3,650 MW, out of which 1,750 MW with cogeneration

of thermal and electric energy. There are 450 MW in reserve, and another 1,150 MW are nearing the end of standard

life and will be retired by 2023. A new capacity of 400 MW is under construction in Iernut.

Unit: Giga Watt (GW)

2-43

Instead of the old capacities that will be decommissioned in the near future, it is required to invest in new capacities,

some of which are intended for cogeneration in localities with functional centralized heat supply system of

Bucharest, Constan a, Gala i and others. This includes the replacement of Iernut capabilities.

The cost of the investment is relatively low, below EUR1,000/kW of installed power so that it can be financed even

under the high cost of capital, and the turbines are efficient and flexible.

c) Coal

Romania currently has 3,300 MW of installed and available net capacity (including those reserved for system

services) in lignite and CFPP, with other capacities being refurbished.

All lignite-based units were put into operation in 1970-1990 and the oldest ones are near the end of their life span,

requiring either retrofitting investments to extend the life spans of existing equipment or replacing them with new

units, through larger investments.

The competitiveness of lignite in the electricity mix will depend on:

I) the performance of each unit, rather low for existing equipment,

II) the cost of the lignite delivered to the plant, which is relatively high, and

III) the price of EU Emission Trading Scheme (EU ETS) emission allowances,

and new lignite capacities must have over-critical parameters, high efficiency, operational flexibility and low green-

house gas emissions.

Maintaining coal-based equipment implies streamlining business in this sector throughout the production chain,

including implementing technologies that ensure emissions levels that meet the requirements of environmental

legislation.

In the long run, the role of lignite in the energy mix can be preserved by developing new equipment, equipped with

CO2 capture, transport and geological storage technology.

Even more important will be the role of lignite in ensuring the adequacy of national energy system in stressful

situations, such as periods of prolonged drought or severe frost.

Hard coal reserves in Romania are impossible to exploit under economic efficiency, making it impossible to build

new units to replace the withdrawn ones.

2-44

d) Hydro

A slight increase in hydropower capacity by finalising projects that are currently under development is forecasted.

The essential role played by hydropower on the balancing market will require strengthening through timely

implementation of maintenance and refurbishment works.

According to Energy Strategy of Romania for 2019-2030, hydropower will have an investment budget of over euro

800 million up to 2020 for modernisation and retrofitting works at the plants currently in operation.

The investments necessary for the completion by 2030 of the hydropower equipment, optimised according to the

current requirements, amount to about 2.5 billion euros, which will be provided both by Hidroelectrica and by other

companies and authorities benefiting from these equipment.

In 2030, the total installed capacity in hydropower plants in Romania will reach 7,490 MW compared to 6,741 MW

in 2018. As a result of this installed capacity increase, in 2030 the production of electricity in hydropower plants

will increase from 16.55 TWh in 2018, up to 17.60 TWh.

e) Renewable Energy

Technological evolution leads to lower costs of wind and photovoltaic equipment and opens new prospects for

prosumers. However, without the financial support scheme established by the government, the share of renewable

energy is expected to grow slightly by 2030. Nevertheless, if the energy storage technology were be developed with

the reasonable cost, the share of renewable energy would be higher.

In 2030 the total installed capacity and the annual generated electricity of wind power are expected to reach

approximate 4,300 MW and 11 TWh (It is conflict with the figure shown in table 2-13, however is kept as it is since

so written in the Energy Strategy of Romania.), respectively.

Until 2030, a total installed capacity and an annual production of photovoltaic systems will reach about 3,100 MW

and 5 TWh (ditto).

It is estimated that plants powered exclusively by biomass, bio-liquids or waste, with a total capacity of 139 MW

will be in operation by 2030. The total electricity production from biomass is estimated at about 2 TWh in 2030.

The total investments to be made by 2030 to build new plants or adapt existing ones are around euro280 million.

These investments will be made by the operators who wish to capitalise on this relatively inexpensive energy

resource in new projects, or by thermal power station owners who want to reduce their costs by using a mix of fuel

including primary renewable resources.

2-45

f) Conclusion

Figure 2-31 shows the installed capacity forecast in 2030 compared with present. As shown in Figure 2-31, Romania

has a balanced and diversified electricity mix at present. It contains all types of primary energy sources available in

Romania. It is composed of traditional fuels such as hydropower, nuclear power, coal and natural gas, which is also

preferable from the viewpoint of energy security.

The relative role of natural gas and CFPP in the electricity mix after 2025 will depend on the price of EU ETS

emission allowances. Current projections show a sustained increase in the cost of emissions to euro 40/tonne of CO2

equivalent in 2030 to facilitate the achievement of decarbonisation targets. At this cost, natural gas is competitive

compared to lignite at a price level of euro19 per MWh. If the EU ETS cost remains lower than currently estimated,

coal would keep important position in the energy mix, as it is unlikely that long-term gas prices will remain below

euro15/MWh.

Unless the volume of electricity generated by nuclear energy becomes double, larger scale of natural gas and CFPP

will take place of nuclear energy.

New investment to renewable energy is expected to continue intermittently without the support schemes

implemented by the government. A key factor for the sustainability of renewable energy projects is to secure low-

cost financing.

Through appropriate support mechanisms, the use of biogas and waste will slightly increase, especially in

cogeneration equipment in accordance with environmental regulations.

2-46

Figure 2-31 Installed Capacity Forecast in 2030 Compared with Present

* The figures for Gas/Coal in 2030 are obtained by visual measurement from the graphs.


1,400

3,6503,300

6,741

2,953

1,360

126

1,440

2,2001,600

7,490

4,300

3,100

1390

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Nuclear Gas Coal Hydro Wind Photovoltaic Baiomass

Current 2030MW

2-47

(3) Matters relevant to the Deva Project1) Relevant Matters from the Viewpoint of EU Environmental Regulation

Romania joined EU in 2007. Thus existing thermal power plants are required to comply with EU environmental

regulations.

CFPP, which account for more than half of the thermal power plants, are not equipped with adequate environmental

equipment and are facing deterioration. Therefore, the reduction of the environmental burden is necessary as below:

Renovate CCPP to improve environmental impact

Repair coal boiler on large scale and introduce environmental equipment

Abolition of CFPP

As shown in Table 2-14 and Table 2-15, the emissions of air pollutants from the Deva CFPP does not comply with

the current EU environmental regulations. (PM, SO2 and NOx exceed regulatory limits) Therefore, the reduction of

environmental impact is urgently required. The EU environmental regulations plan to launch even stricter

atmospheric emission standards in 2021, and thus acceleration to apply environmental measures is required more

than ever before.

The value of NOx and PM10 included in the air around Deva city exceeded the EU environmental regulation value

as shown in Table 2-16. In the light of the EU’s intention towards new stricter regulations, improvement of air

quality is necessary.

Table 2-14 Air Emission Limits for CFPP in EU

FuelPM

(mg/Nm3)

CO

(mg/Nm3)

SO2

(mg/Nm3)

NOx

(mg/Nm3)

coal and lignite 20 - 200 200

(Source: DIRECTIVE 2010/75/EU, Article 30, Annex V Part1)

Table 2-15 Air Emission Concentration in the Deva CFPP in 2017

PM

(mg/Nm3)

CO

(mg/Nm3)

SO2

(mg/Nm3)

NOx

(mg/Nm3)

Deva 271.44 - 2720.66 422.20

(Source: prepared by the study team based on interview with the project company)

2-48

Table 2-16 Air Quality Standards in EU and Air Quality Monitoring Results in Deva City Throughout 2017

Parameter Limit Warning Level

Critical Level

(Influence on

Vegetation)

Monitoring Results

in Deva city

SO2

Hourly average

( g/m3)350 500 - 310.26

24-hour average

( g/m3)125 - - 41.85

Yearly average

( g/m3)- - 20 10.26

NO2*

Hourly average

( g/m3)200 400 - 108.06

Yearly average

( g/m3)40 - - 16.58

NOxYearly average

( g/m3)- - 30 32.10

PM10

24-hour average

( g/m3)50 - - 143.62

Yearly average

( g/m3)- - 23.27

PM2.5Yearly average

( g/m3)25

-- -

CO

Max. 8-hour

average

(mg/m3)

10 - -Max daily

2.51

* Nitric Dioxide (NO2)

(Source: prepared by the study team based on interview to CEH and DIRECTIVE 2008/50/EC)

2) Relevant Matters of the Future Fuel Supply

a) Coal

Currently, Deva CFPP generates electricity by domestic coal (lignite) from the nearby mine. The amount of domestic

lignite is currently confirmed as approx. 690,000,000 tons and the reserves are approx. 290,000,000 tons, which is

abundant, as shown in Table 2-17 “Situation of Natural Primary Energy Resources” issued by MOE in 2018.

However, since the lignite is mined from underground, the mining of lignite is becoming increasingly difficult due

to economic and financial reasons, and thus lignite mines are being closed in accordance with the plan. A vicious

spiral is formed that the decrease of lignite production and high price compared to other power fuels bring about the

decrease of the electricity sales. This problem may be solved if lignite is transported from other economically and

financially reasonable mines and used for generation at Deva CFPP. However, there are no such suitable mines in

2-49

the vicinity of the Deva CFPP, therefore it is not sustainable to generate electricity with lignite. Accordingly, even

at Deva CFPP, it is meaningful to shift from coal power generation system to natural gas power generation system.

Table 2-17 Situation of Natural Primary Energy Resources

Primary

Energy

Resources

Resources ReservesEstimate Annual

Production

Resource and Reserve

Ensurance Period

Resources Reserves

Mil.

tonnes1)Mil. Toe

Mil.

tonnest1)Mil. Toe

Mil.

tonnest1)Mil. Toe Years Years

Lignite 690 124 290 52 25 4.5 28 12

Hard

Coal232 85 83 30 0.8 0.3 290 104

Oil 229.2 52.6 3.4 67.4 15.5

Natural

Gas726.8 153 10.5 69.2 14.6

1) only natural gas is calculated in billions of m3

(Source: Energy Strategy of Romania for 2019-2030 with outlook to 2050)

b) Natural Gas

Romania is rich in natural gas. As shown in Table 2-17, Romania has 726.8 billion cubic meter (bcm) of natural gas

resources and 153 bcm of natural gas reserves. Regarding natural gas reserves, Romania is ranked third in the EU.

Romanian gas self-sufficiency rate is at a high level. At present, reserves-to production ratio is expected to be 14.6

years on reserves basis and 69.2 years on a resources basis. Current gas production sources are primarily onshore

gas wells, but the offshore gas wells at the Black Sea are developed for the use of the Black Sea region. A huge

amount of gas exceeding 200 bcm is buried in the Black Sea, and this gas is regarded as important in the Romanian

energy strategy. In the future, domestic reserves will increase along with the development of the Black Sea,

Romania’s reserves are expected to be the second largest in the EU, exceeding the UK.

As described in Chapter 2 (1) 2) j), domestic gas production volume has a trend toward decrease along with the

decline in domestic gas consumption until 2016, but as stated in the energy strategy issued at the end of 2018,

Romanian government plans to increase domestic gas consumption in the future, and increase in domestic gas

production is expected. The Black Sea gas which is being developed is the prime source of this increase in gas

production.

Given the situation of such gas reserves and production, the gas supply for this project is stable in the future.

Romania and its neighboring countries are connected with gas transmission pipelines. To export Black Sea gas to

the European gas market, the expansion of the interconnection network is in progress. The major suppliers to the

European natural gas market are Russia which has abundant gas reserves, Azerbaijan which is now developing the

2-50

interconnection network to start exporting gas in 2020 and etc. If necessary, it is possible to use imported gas as an

alternative of domestic gas, and therefore fuel supply stability to this project is deemed to be high.

Considering these circumstances of Romanian natural energy resources, shift from coal power generation system to

CCPP using natural gas as fuel for Deva power plant is recommended.

3) Relevant matters of Location

a) From the Viewpoint of Power Supply System

Table 2-18 shows a list of main thermal power plant which is above300 MW. Highlighted in yellow shows the

power plant near Bucharest. As the table shows, the new large-scale CCPP is currently concentrated in the southern

part of Romania, close to the demand site. On the other hand, only few power plants exist in the northwestern part

of Romania where the Deva CFPP is located, and the Deva CFPP is the largest power plant in the area.

2-51

Table 2-18 Main Thermal Power Plant in Romania (over 300MW)

Name of power plant Power Output

(MW)

Configuration

(MW × Number of units)

Fuel Type Year of

COD*

Turceni 1650 330×5 Lignite 1978-1987

Rovinari 1,320 330×4 Lignite 1976-1979

Deva 1,075 210×4

235×1

Lignite 1969-1980

Brazi 950 50×5

150×2

200×2

Coal 2012

Petrom Brazi 860 430×1

430×1

Natural Gas 2011

Ludu -Iernut 800 200×2

100×4

Natural Gas 1963/1967

Br ila 647 227×1

210×2

Petroleum Natural

Gas

1973/1974

Craiova- I alni a 630 315×2 Lignite, Natural Gas 1987/1988

Bucharest South 550 125×2

100×2

50×2


Gala i 535 105×3

100×1

60×2


Bucharest West 310 40×4

190×1

Coal, Natural Gas 1955/2007

Borze ti 420 210×2 Petroleum 1968/1969

Craiova II 300 150×2 Lignite, Natural Gas 1987/1988

* COD : Commercial Operation Date

(Source: https://en.wikipedia.org/wiki/List_of_power_stations_in_Romania,

https://www.sourcewatch.org/index.php/Category:Existing_coal_plants_in_Romania)

Figure 2-32 shows the current configuration and the future plan of the 400 kV transmission system. As can be

seen in Figure 2-32, the Mintia district which embrace the Deva CFPP has a plan to reinforce the system to export

electricity to Moldova in the future, and with regard to this plan, the Deva CFPP is expected to be an important

source. This future expansion of energy exports is clearly stipulated as a policy in the "Energy Strategy of

Romania for 2019-2030, with an outlook to 2050" in Romania.

In addition, the Mintia district is located at the middle of the transmission network between the neighboring Hungary,

and since the Deva CFPP have strengthened disperse of the power plant, Deva CCPP to be newly constructed will

contribute greatly to the stabilization of the electric power system.

https://en.wikipedia.org/wiki/List_of_power_stations_in_Romania

https://www.sourcewatch.org/index.php/Category:Existing_coal_plants_in_Romania)

2-52

Figure 2-32 Current Structure and Future Plan of 400 kV Transmission System in Romania

(Source: Transelectrica HP http://www.transelectrica.ro/web/tel/plan-perspectiva)

b) From the Viewpoint of Introduction and Expansion of Renewable Energy

Currently, renewable energy is introduced and expanded. Also in the "Energy Strategy of Romania for 2019-2030,

with an outlook to 2050" in Romania, the future expansion of renewable energy is expected. Figure 2-33 shows the

transition of the future power capacity and its breakdown which is indicated in the "Energy Strategy of Romania for

2019-2030, with an outlook to 2050".

It is assumed to increase the ratio of renewable energy and nuclear power energy which has few frequency

adjustment capability. On the other hand, the ratio of coal-fired power energy which has frequency adjustment

capability is assumed to decrease.

Therefore, to comply with the demand change, the importance of the power source containing both the load change

ability and the frequency adjustment function will increase more in the future. In the current situation, the Deva

CFPP is required to operate in a wide range of load zones. Taking this into consideration, from the viewpoint of

stabilizing the power frequency, it is assumed that the necessity of CCPP, which has higher frequency adjustment

capability than the thermal power plant, namely coal-fired power, is expected to increase further.

Mintia

http://www.transelectrica.ro/web/tel/plan-perspectiva)

2-53

Figure 2-33 Changes in Future Power Capacity of each Power Supply Indicated in "Energy Strategy of

Romania for 2019-2030, with an outlook to 2050"


c) From the Viewpoint of Cost Reduction

Since this project is a renewal of the existing equipment (Brownfield case), it is possible to reuse existing equipment

such as water intake / drainage equipment and fuel gas piping. By reusing the existing equipment, CAPEX can be

lowered, which enables to construct a competitive power supply. From this point, it is very significant to build a

CCPP in the Deva CFPP area.

d) From the Viewpoint of Heat Supply

Regarding heat supply, in the "Energy Strategy of Romania for 2019-2030, with an outlook to 2050" in Romania, it

is indicated as a policy that all consumers have secure access to electricity and heat.

Heat from the thermal power plant makes it possible to form a cogeneration system that can effectively utilize the

exhausted steam from the ST, which as a result improves the total thermal efficiency of the power plant.

The amount of district heat supply from the Deva CFPP is very small compared to the heat quantity of ST exhaust

steam of the CCPP to be newly constructed, thus without adding any special equipment, it is possible to supply

regional heat.

Regional district heat supply network has already been developed in Deva area, and successive operation of the

Deva CFPP is also important from this point.

Nuclear Power

Renewable Energy

Coal-fired Power

Other ThermalPower

2-54

4) Current Situation of Deva Power Plant

A total of 6 units were built in the Deva CFPP from 1971 to 1980 in order. As described in Table 2-19, Unit 1 has

already been abolished, and currently total of 5 units (Unit 2 to 6) are in operation. Unit 3 was updated in 2007, and

output of Unit 3 improved from 210 MW to 235 MW.

Table 2-19 Abolition Plan of Deva CFPP and List of Power Generation Output

Unit 1 2 3 4 5 6

Abolition planAlready

abolished2019

To be

determined

To be

determined2020 2020

Power Output

(MW)

Already

abolished210 235 210 210 210

(Source: Based on the data provided by CEH and prepared by the study team)

The transition of the electricity generation is shown in Figure 2-34. Compared with the maximum electricity

generation (7,247 GWh) which was recorded in 1985, the electricity generation in 2017 resulted in 12% (885 GWh)

decline, and 3 units were operated.

Figure 2-34 Transition Electricity Generation at Deva CFPP

(Source: Based on the data provided by CEH and arranged by the study team)

On the other hand, the Deva CFPP supplies electricity in a wide range of load from 60 MW to 350 MW, making a

great contribution to the stabilization of grid power which bears the introduction of renewable energy.

However, the Deva CFPP started its operation from 1971 to 1980 and is now facing deterioration. The thermal

efficiency has also decreased by about 9% since commercial operation started.

2,085

1,757

987 997885

0

500

1,000

1,500

2,000

2,500

2013 2014 2015 2016 2017

Gen

erat

edEl

ectri

cEn

ergy

(MW

h)

Year

Electricity Generation

2-55

Furthermore, along with the accession to the EU, large-scale thermal power plants are required to comply with EU

environmental regulations (Directive 2010/75 / EU), and in order to comply with this regulation, large scale of

Rehabilitation is necessary.

Replacement to low NOx burner

Modification of mills and fans

Installation of desulfurization equipment

Enhancement of electrostatic precipitator

Enhancement of ash treatment equipment etc.

In response to this, from the viewpoint of environmental friendliness and economic efficiency, Unit 1 had already

abolished and other units will also be abolished in order.

5) Relevant matters of Power Demand and Analysis

a) Power Demand and Future Assumption

Figure 2-35 shows the Romania country power supply type generation electric energy. Electric power demand,

which recorded approximately 59,000 GWh in 1985, declined in 2000 due to a series of restructuring in the industry

and transporting sectors. Electric power demand has recovered since 2000 as a result of stable demand growth in

the homes and commercial sector.

Despite the Romania’s decline in population which should directly ruin the electricity demand, the demand for

electricity is stable owing to the government’s effective economic policy.

As above, it is estimated that the demand for electricity will stay at the current level.

b) Influence of Renewable Energy

Renewable energy (excluding hydraulic power) has expanded from 5.5% (2012) to 16% (2017) on the basis of

electricity generation, and expansion is expected to accelerate in the future. From this point, the growing importance

of a power supply having a high frequency adjustment function can be forecasted.

Since CCPP has a notably high frequency adjustment function among thermal power plant, CCPP is important from

the viewpoint of stabilizing the frequency, given the background of growing increase in introduction and expansion

of renewable energy.

c) Effect of Coal-fired Power

Coal-fired power, which occupied 37.5% (as of 2012) of the amount of electricity generation, continues to

decrease year by year as renewable energy increases, and has decreased to 25.2% as of 2017. CFPP are obliged to

2-56

be abolished due to the strict EU environmental regulations, thus it is expected that repowering and construction

of new CCPP with high frequency adjustment function will become indispensable in the future.

Figure 2-35 Romania Country Power Supply Type Generation Electric Energy

(Source: Romania State Energy Department HP)

Chapter 3 Study on the Power Plant

3-1

(1) General Explanations on the Power Plant1) Introduction

As mentioned in Chapter 2, Romania became a member of the EU in January 2007. Along with this, thermal power

plants in Romania are required to comply with EU environmental regulations. Especially since aged CFPP is being

big burden to the environment, environmental measures in large amount is required against the operating existing

equipment.

On the fuel supply side, the continuous supply of coal (lignite) in Romania is at a difficult situation. Meanwhile,

the prospect of natural gas supply is stable in the medium and long term due to the rich reserves of the Black Sea

and the reinforcement of the supply network within the EU.

The Deva area is a major base from the viewpoint of the transmission grid and from the viewpoint of district heat

supply.

In addition, since Deva CFPP can be renovated to CCPP by using its existing equipment, it is possible to reduce the

CAPEX and therefore competitive electricity selling price can be achieved.

Based on the above, we will consider to renew an aging Deva CFPP to high thermal efficiency CCPP by replacing

the existing equipment.

2) Power Block Configuration (2on1, 1on1)

a) CCPP Configuration

In constructing the CCPP, the CCPP configuration needs to be studied. The main shaft configuration can be

classified into two types, single-shaft type and multi-shaft type.

Single-shaft type shall be selected from one unit configuration or two unit configuration. Considering the following,

we choose to the premise to be of a single-shaft type with two unit configuration. Comparison between single-shaft

type and a multi-shaft type will be performed afterwards.

I) Because there is district heat demand throughout the year, the configuration should be suitable for short

heat outage period.

II) Since this power plant will be the main electric power source of the Deva area, the configuration should

be suitable for short power plant outage.

Figure3-1 shows an example of the shaft configuration of both types. The single-shaft type is a shaft configuration

in which GT, ST, and generator are coaxially laid.

On the other hand, in the multi-shaft type, separate shaft pierces GT and ST respectively, and the generator

configuration is set together with each GT and ST.

3-2

Figure 3-1 An Example of the Shaft Configuration of Single-shaft and Multi-shaft

Shaft type Configuration

Single-

shaft

1on1 ×2 units

HRSG GT ST HRSG GT ST

The system that consists of GT and ST on the same shaft.

Multi-shaft 2on1 ×1 unit

HRSG GT

Each GT and ST is installed separately and each GT and ST has a generator.


b) Main Characteristics of CCPP Shaft Configuration

I) Power output, Thermal efficiency

In general, it is possible to increase ST output by adopting multi-shaft type CCPP. Compared to single-shaft

type, during base load operation, multi-shaft type has a little higher generator output and thermal efficiency.

On the other hand, in case of middle load operation, this type of CCPP can be operated with high efficiency,

since one block can be stopped while the other block operates at rated load.

II) Operability

CCPP’s main operation is solely done by the automatic control of fuel which flows into GT. It is a complete

automatic operation. Therefore, there is no difference between multi-shaft type and single-shaft type.

III) Number of main equipment

Compared to the multi-shaft type, the single-shaft type has one less generator and one more ST and related

equipment.

ST

HRSG GT

3-3

IV) Installation area

Multi-shaft type is inferior to single-shaft type in terms of efficient land use, since ST needs to be installed

separately. On the other hand, multi-shaft type can have a more flexible plan than single-shaft type when

placing equipment.

Installing a multi-shaft type (2 on 1) as one block requires larger area than installing two blocks of single-

shaft type (1 on 1).

V) Construction cost

Construction cost of single-shaft type is slightly higher due to the increase in auxiliary equipment.

VI) Serviceability

Little difference in configuration exists, however, basically difference is scarce in terms of serviceability

between the two types.

VII) Repair cost

Difference between single-shaft type and multi-shaft type is scarce.

VIII) Unit price of electricity generation

The difference of shaft configuration hardly makes difference in repair cost. On the other hand, single shaft

type is slightly higher in construction cost than multi-shaft type, while single-shaft type’s power

generation efficiency is slightly lower than multi-shaft type. As a result, single-shaft type’s unit price of

electricity generation is slightly higher than multi-shaft type.

IX) GT/ST handling at maintenance period

In the case of multi-shaft type, when one GT can’t be operated due to inspection or unplanned outage, power

plant can operate at almost 50% output.

On the other hand, in the case of single-shaft type, when the GT or ST can’t be operated due to situations

such as inspection of each shaft, it is possible to continue operation by high thermal efficiency while securing

50% output.

X) Summary of Examination Results

A summary of the evaluation is shown in the table3-1.

3-4

Table 3-1 Characteristic of Each Shaft Type


c) Recommended Shaft Configuration at the Deva CFPP

As shown in Chapter 2 (3), Table 3-2 can be cited as requirements for the power supply of the Deva area.

Table 3-2 Requirements for the Power of the Deva Area

Requirement Reason

High thermal efficiency To maintain price competitiveness against other power supplies

Low construction cost Same as above

It is possible to operate in a wide load

range

To stabilize the power system accompanying expansion of

renewable energy

High frequency adjustment function Same as above


Considering the requirement, as shown in the previous section, multi-shaft type (2on1) is favorable than single-shaft

type (1on1) in the following points.

High thermal efficiency

Low construction cost

No difference between multi-shaft type and single-shaft type regarding the following points.

Operational load range

Frequency adjustment function

Based on the above, we recommend the shaft configuration to be multi-shaft type (2on1) as the CCPP of the Deva.

Item Multi-shaft type (2on1×1 block) Single-shaft type (1on1×2blocks)

Power Output Base A little low

Thermal efficiency BaseA little high

high efficiency at partial load of CCPP

Operability Base Same

Number of main

equipment

Base

GT:2, HRSG2, ST:1, GEN:3

Many

GT:2, HRSG:2, ST:2, GEN:2

Installation area Base A little compact

Construction cost Base A little expensive

Serviceability Base Same

Repair cost Base Same

Unit price of

electricity generationBase A little high

GT/ST handling at

maintenance periodIt can be operated at about half load.

Same

it is possible to operate at high efficiency

3-5

3) Gas Turbine

a) Dual Fuel System

For an emergency backup power system, GT loaded with dual fuel system is capable of burning liquid fuel such

as light oil when no fuel gas is supplied. In case of burning liquid fuel, there is a method to suppress the amount of

NOx caused by partially high temperature by lowering the combustion temperature by spraying steam or water

into the combustion chamber.

For this project, we confirmed through field survey that the dual fuel system is unnecessary.

4) Condenser Cooling System

a) Overview

Since the candidate site of the project is adjacent to the river, generally there are three following options for the ST

condenser cooling system.

River water cooling system

Cooling tower system

Air cooled condenser system

The ST condenser cooling system is selected through consideration on the environmental conditions of the candidate

site (atmospheric temperature, river water temperature, availability of water use), regulation, operation cost,

construction cost, and ST power generation efficiency.

With regard to the CCPP to be newly constructed, we will consider suitable cooling system, taking into consideration

the operation status of the current Deva CFPP.

b) Condenser Cooling System of Deva CFPP

The condenser cooling system of the Deva CFPP is shown in Figure 3-2. The cooling system is combined with the

following three cases and are used in combination.

Unidirectional flow cooling system using river water

Circulation cooling system using cooling tower (natural circulation type)

Discharge case upstream from the water intake position of the Mures river

3-6

Figure 3-2 Condenser Cooling System of Deva CFPP


Regarding the operation of these three cases, taking into consideration the operation restrictions shown in Table 3-

3, optimum system is selected and operated each time. When operating the circulation cooling system, from the

viewpoint of securing the minimum flow rate, 2 units of operation is required. In addition, the circulating water

pump is namely a variable blade, and thus enables to adjust the amount of circulating water.

Table 3-3 Operation Restriction List of Each Condenser Cooling System

Route Operational restriction

1 None

2 If any of the following conditions are satisfied, Route2 is operated.

Low flow rate of river water

Occurence of screen clogging due to river garbage

When the river water temperature rises and the cooling merit in the cooling tower relatively

increases

When saving is necessary due to high water unit cost

3 If the Mures river freezes and has negative impact to water intake or if there is such concern, Route

3 is selected.


P

WaterG

ate

Condenser

WaterGate

P

CoolingTower

Mures River

CirculationPump

RecirculationPump

Screen

Route 3

Route 1Route 2

3-7

For reference, Table 3-4 shows the rated circulation water volume list of the Deva CFPP.

Table 3-4 List of rated Circulating Water Amount of the Deva CFPP

Existing unit 1 2 3 4 5 6

Circulating water

volume (m3/h)

Already abolished

(before abolished:29,400*)29,400* 29,400* 29,400* 29,400* 29,400*

*These values include plant cooling water of 2,400 m3/h.


c) Condenser Cooling System of the CCPP to be newly constructed

I) Reuse policy of existing equipment

i) Cooling tower

Based on the condenser cooling system of the Deva CFPP, we studied the condenser cooling system for the CCPP

to be newly constructed. With respect to the cooling tower, considering the operation restrictions of the Deva CFPP,

we think that this equipment is also necessary for the CCPP to be newly constructed.

The maximum circulating water volume of the CCPP to be newly constructed is expected to be 29,000 (m 3 / h).

This circulating water amount is equivalent to the circulating water pumps flow rate (two pumps) per unit of the

Deva CFPP, which is 29,400 (m 3 / h), and it is considered that the existing equipment of circulating water system

can be reused by judging the design aspect. Also, as a result of visual inspection of the exterior, we recommend the

reuse of the existing cooling tower since the equipment condition by visual inspection is good.

In addition, it is confirmed that the cooling tower has not been operated in 2018 (operating hour is 0). As mentioned

above, since the cooling tower is rarely operated, there is no problem in operation at present. However, if the cooling

tower will be operated more frequently in the future, re-examination of the operation method of the cooling tower

is recommended in order to reduce the in-house power.

Table 3-5 List of Discharge Flow Rates of Existing Circulating Water Pump and Recirculation Pump

Specification Circulating Water Pump Recirculation Pump

Discharge flow rate (m3/h/pump) 14,700 14,700


ii) Pump

As described above, the power of circulating water pump is the largest among the in-house power, and optimum

design leads to improvement of the thermal efficiency of the CCPP to be newly constructed. The same applies to

the recirculation pump. Based on the above, it is recommended to newly install both pumps. For reference, the

specifications of both pumps examined by the study team are shown in Table 3-6.

3-8

Table 3-6 Recommended New Equipment for Circulating Water System for CCPP to be newly constructed

Equipment Specification

Circulating Water Pump 14,500 (m3/h) × 2 units

Recirculation Pump 14,500 (m3/h) × 2 units


iii) Screen

As for the bar screen and the traveling screen, there is no abnormality as a result of the visual inspection. Also, since

the design capacity of existing equipment and the design capacity of the CCPP to be newly constructed are almost

equal, we recommend the reuse of these equipment.

5) Plant Water Supply and Water Treatment System

The amount of water required for the CCPP to be newly constructed is within the water required per unit for existing

CFPP. Since Unit 1 of the existing CFPP is abolished, from the viewpoint of the specification, water equipment can

be reused without problems.

6) Fuel Gas Supply System

a) Equipment Specifications of the Deva CFPP

The specifications of the fuel gas supply piping for the Deva CFPP are shown in Table 3-7.

In the Deva CFPP, up to approximately 40,000 Nm 3 / h of gas is used for auxiliary combustion. The existing units

are planned to be abolished sequentially, therefore the amount of gas will decrease in accordance with the number

of discontinued units.

Table 3-7 Specification of Fuel Gas Supply Piping for the Deva CFPP

Item Specification

Design pressure 10.5bar (gauge)

Design flow rate 100,000Nm3/h

Piping diameter 500A

Piping material Steel


b) Equipment Specifications required for CCPP to be newly constructed

For fuel gas, it is necessary to check whether it meets the required gas temperature and pressure of CCPP.

Table 3-8 shows the fuel gas pressure and flow rate required for the CCPP to be newly constructed.

As shown in Table 3-8, the required flow rates are consistent with the specifications of the Deva CFPP. Since the

required pressures do not match, it is necessary to newly install a fuel gas compressor. Since gas is supplied within

the design pressure (10.5 bar) on the upstream side of the fuel gas compressor, it is possible to reuse upstream fuel

gas piping (from the fuel gas compressor to the existing valve station).

3-9

Table 3-8 Fuel Gas Pressure and Flow Rate required for CCPP to be newly constructed

Item Specification

Required pressure About 40bar (gauge)

Required flow rate About 70,000 Nm3/h

According to GT model.

This specification describes the largest numerical value among candidate CCPP.


7) Transmission Line for Generator

a Transmission System of the Electrical Power generated by Deva CFPP

As shown in Figure 3-3, the electrical power generated by Deva CFPP is stepped up to 220 kV by the generator

step-up transformer (GST) for each unit, and is transmitted to the adjacent Mintia substation. One line capacity of

the transmission line connecting the Deva CFPP - Mintia substation is 225 MW, the rated current of the GST circuit

breaker installed at the Mintia substation is 1,600 A (capable of transmitting up to 550 MW). The substation is

owned by Transelectrica which is Romanian electricity transmission company, and the point of interconnection with

the transmission company is the dead-end transmission tower. Along with the elimination of the unit, the

transmission line from the GST of the existing No.1 power plant to the dead-end transmission tower has already

been removed.

Figure 3-3 Outline Drawing of Transmission Line to Mintia Substation

(Source: prepared by the study team based on Google Earth)

b) Transmission System of the Electrical Power generated by CCPP to be newly constructed

As the power transmission equipment will be constructed after the abolition of existing power station units, we

believe that they can be reused. For example, the configuration of 3 feeders is shown in Figure 3-4. The advantages

of 3 feeders include the ability to supply partial load at the time of failure / inspection of transformers / circuit

breakers, and to reduce the frequency fluctuation to the grid at the time of 1 feeder transformer / circuit breaker

failure. On the other hand, as three transformers is required, equipment costs will increase.

3-10

Figure 3-4 Generated Power Supply System of H-100 type CCPP


8) Candidate for Existing Equipment to be Reused

a) Significance of Reusing Existing Equipment

This project is a Brownfield project. To realize a competitive power supply, it is important to reuse equipment that

can maintain the condition of equipment to the utmost, while at the same time it is also important to take into

consideration the condition of aging equipment. By reusing equipment, CAPEX can be reduced. On the other hand,

if equipment that can’t maintain equipment integrity in the future is reused, there is a possibility that some equipment

might stop the operation, and thus repair expenses may increase significantly.

Therefore, the selection of equipment to be reused is important from the viewpoint of minimizing the life cycle cost

(LCC).

b) Equipment subject to Reuse Study

In terms of reusing equipment, equipment that satisfy the following are the target.

Equipment outside the scope of the main equipment manufacturer ‘s package of supply equipment

Equipment which its design specification does not violate that of the equipment for the CCPP to be newly

constructed.

c) Candidate for Reuse

In light of the requirements of the MOE in Romania and on-site inspection of existing equipment, we consider that

existing equipment in Table 3-9 are the possible candidates to be reused.

For the avoidance of doubt, the existing equipment was selected by evaluating its specification and by visual

inspection. Therefore, we do not guarantee that the reused equipment will operate normally, and we think that re-

examination is necessary to judge whether equipment listed Table 3-9 is good to reuse at detailed designing stage.

As for the candidate equipment listed Table 3-9, it is considered that relocation is unnecessary under current

3-11

circumstances.

Table 3-9 Existing Equipment that can be Reused

Candidate equipment for

existing reuse

Visual inspection

result

Rationale of judgment to reuse from the viewpoint of

specification comparison

Intake pit Good The amount of circulating water is equal and possible

Bar screen Good Same as above

Traveling screen Good Same as above

Circulating water piping

Intake

Good Same as above

Discharge pit Good Same as above

Cooling tower Good Same as above

Fuel gas piping Good It is possible because the amount of fuel gas used is

within the design flow rate.

District heat supply pump Good It is possible that the amount of district heat supply is

within the amount of existing equipment supply.

District heat supply piping Good Same as above

Demineralized water

equipment

Good It is possible that the amount of required demineralized

water is within the existing equipment usage.

Demineralized water tank Good Same as above

Potable water equipment Good It is possible that the amount of required potable water

is within the existing equipment usage.

Water pre-treatment

equipment

Good It is possible that the equipment scale is within the

existing equipment scale.

Wastewater treatment

equipment

Good It is possible that the equipment scale is within the

existing equipment scale. (However, depending on the

wastewater standard applied to the CCPP to be newly

constructed, it may be necessary to remodel the

equipment)

Workers house Good It is possible that the equipment scale is within the

existing equipment scale.

Warehouse Good Same as above

Transmission line Good Same as above

In the future, when discontinuing all the units of the Deva CFPP, it is necessary to reconsider whether it can

be reused.


3-12

Figure 3-5 Reuse / New Installation Equipment out of Equipment around the Intake Pit


Figure 3-6 Reuse / New Installation Equipment out of Equipment around the Discharge Pit


(Reuse)

Bar screen

(Reuse)

Intake pit

(Reuse)

Traveling

screen

(New installation)

Circulating water pump

(Reuse)

Circulating

water piping

(Reuse)

Discharge pit

(Retirement)

Recirculation pump

Cooling tower

(1 unit : new installation)

Recirculation pump

(Reuse)

Cooling tower

3-13

d) Equipment not recommended for Reuse

We compared existing equipment and equipment specification required for CCPP to be newly constructed. As a

result, it isn’t recommended to reuse the equipment shown in Table 3-10 in the CCPP to be newly constructed.

Table 3-10 Existing Equipment not recommending Reuse

Equipment Visual inspection

result

Basis for judging not to reuse from the viewpoint of

specification comparison

Circulating water pump Good Since the equipment performance is directly related to

thermal efficiency, and the influence on power plant

operation upon failure is also large, it isn’t

recommended to be reused.

Recirculation pump Good Because this equipment performance directly connects

to thermal efficiency, it can’t be reused.

Heat exchanger for

district heat supply

Good Because the number of steam lines for heat exchange is

different and remodeling costs is estimated to be huge, it

isn’t recommended to be reused.

Central control room Good Considering the point that the operability deteriorates

and the construction cost increases, it isn’t

recommended to be reused.

Generator step-up

transformer

Oil bleeding is

present

Considering the point that the generator voltage is

different, the number of years since the installation, and

the influence on power plant operation at the time of

failure is also large, it isn’t recommended to be reused.

Start-up auxiliary

transformer

- No installation required for new CCPP

Compressed air

equipment

- Considering the number of years passed since

installation and the influence on plant at the time of

trouble is also large, it isn’t recommended to be reused..


3-14

(2) Supply Plan of Natural Gas and Water1) Supply Plan of Natural Gas

a) Demand of Natural Gas

Currently, the development and refurbishment plan of an international gas transmission pipeline including the

BRUA connecting Bulgaria, Romania, Hungary and Austria is proceeding. It is expected that gas export to the

European markets including Romania's neighboring countries will increase mainly due to the Black Sea gas.

As mentioned in Chapter 2 (3) 2) b), Romanian gas reserves are huge as 153 bcm. In comparison, the gas volume

used in this project is very small, approximately 0.5 bcm per year. While development of the Black Sea gas fields

increase gas production and thus the exportation to the European gas market increase, simultaneously the gas reserve

is also expected to increase. Therefore, the project’s consumption of gas gives slight impact to Romanian gas

demand and supply balance.

b) Supply of Natural Gas

Trans gaz, which is the gas supplier of this project, is extending Romanian gas transmission infrastructure to meet

the increasing future gas demand and to comply with each gas consuming project’s plan. We confirmed that Trans

gaz will complete the extension of gas transmission infrastructure and supply gas to this project at the required time.

Regarding gas supply to this project, the adjustment will be proceeded with the following system.

2) Fuel Gas Supply System

Existing equipment upstream from the fuel gas pressure reduction equipment to the valve station can be reused as

mentioned in Chapter 3 (1) 6). It is necessary to design equipment downstream from existing gas pressure reduction

equipment during the detailed designing phase. Specifically, the following equipment will be designed.

(The following equipment will be installed downstream from existing gas pressure reduction equipment.)

û Shut-off valves

û Flow meter

û Separators for removing foreign substance

û Gas compressors

û Gas heaters (if necessary)

û Gas flow and pressure regulating system

û Gas detectors

û Fire extinguish system

û Gas sampling systems (if necessary)

Trans gaz

MOE

Owner of CCPP

3-15

The flow meter is an important data measuring instrument to confirm performance in the performance test. In this

performance test, the owner of the CCPP will confirm whether the actual performance of the CCPP satisfies the

contract guarantee. Therefore, it is recommended the flow meter to be newly installed.

There is the minimum gas supply pressure for GT. Each model of GT requires different level of this pressure. The

maximum value of this pressure will be approximately 40 bar.

As shown in Table 3-8, it is confirmed that the designed gas pressure of the existing gas piping is 10.5 bar. Currently

supplied gas does not meet gas pressure requirements of GT. Therefore, it is necessary to install gas compressors

inside the power plant site for this project.

3) Supply of Plant Water

It is confirmed that city water or river water near the Deva CFPP is used for plant water. Water consumption at the

Deva CFPP is approximately 400 m3/h. This means that water supply capacity of the Deva CFPP is enough for

CCPP which requires approximately 13 m3/h of plant water. As the Deva CFPP units will be retired in the future, it

can be evaluated that there is no problem with water supply for CCPP. For reference, Table 3-11 shows the water

source and price of the water confirmed to CEH in the field survey.

Table 3-11 Price and Source of Water

Water Source Price

District heating water City water 1.14 EURO*(5.31 RON) / m3

Plant water City water 1.14 EURO*(5.31 RON) / m3

Cooling water for condenser Mures river 5.16 EURO*(24 RON) / 1,000m3 + thermal contribution

* This is the price calculated from original RON-denominated data.


4) Water Treatment System

High quality water is required for a power plant. It is necessary to install water treatment equipment such as

pretreatment equipment and demineralized water equipment as shown. As mentioned in Chapter 3 (1) 5), the water

treatment system including pretreatment equipment and demineralized water equipment can be reused for this

project. Figure 3-7 shows an example of a typical water treatment system.

Figure 3-7 Example of Water Treatment System

(Source: Mitsubishi Heavy Industries technical report Vol.50 No.3 [2013]

3-16

(3) District Heating1) Equipment Specification of District Heat Supply

a) Possibility of Reuse of Existing Heat Exchanger

Concerning existing equipment, it was confirmed that heat exchanger was installed for each unit.

In addition, the heat exchangers of existing equipment have different steam side systems from that of the CCPP to

be newly constructed, and through field investigation we found out that equipment is aging and reuse is difficult.

b) Heat Supply Price

Regarding the price of heat supply, it was confirmed through field survey that the price of the following two types

are determined by the permission of ANRE.

Price for the amount of heat delivered from the Deva CFPP to the central control district heating system

Price for the amount of heat supplied from the central control district heating system to customers such as

home

2) Demand Record of District Heat Supply and Future Prospects

As a district heat supply, we confirmed in the field survey that heat supply of 5 MWth in summer and 30 MWth in

winter needs to be incorporated to the future supply plan.

The amount of district heat supply supplied from Deva CFPP is small but sufficient compared with the amount of

ST exhaust steam of CCPP to be newly constructed, making it possible to supply district heat without adding any

special equipment.

Table 3-12 and Figure 3-8 show the historical record of district heat supply amount of the Deva CFPP acquired on

the field survey and summarized on monthly basis.

It is expected that the same trend will continue in the future, as the average supply of heat of about 16 MWth is

carried out throughout the year, and it fluctuates with similar trends over the 3 years from 2015 to 2017.

Table 3-12 District Heat Supply Amount of Deva CFPP (MW)

Period: January 2015 ~ December 2017

Year Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.Annual

average

2015 28.9 28.0 21.3 15.1 8.1 7.1 6.5 6.3 6.7 13.2 18.7 24.8 15.4

2016 29.5 23.8 21.4 12.4 9.6 7.8 7.0 7.2 7.8 15.8 24.6 29.1 16.3

2017 34.2 26.7 18.8 15.4 9.6 7.5 7.0 7.0 7.7 14.1 20.4 25.5 16.2

Average 30.9 26.2 20.5 14.3 9.1 7.5 6.8 6.8 7.4 14.4 21.2 26.5 16.0


3-17

Figure 3-8 District Heat Supply Amount of Deva CFPP

Period: January 2015 ~ December 2017


3) District Heat Supply by CCPP to be newly constructed

The amount of heat for district heat supply is 5 to 30 MWth, which is a very small amount of condenser heat capacity

used at 350 MW class CCPP, and the influence on the performance of CCPP itself is negligible. Moreover, utilizing

the CCPP calorific value as a heat supply leads to an improvement in the total thermal efficiency of the plant as a

whole, which is a favorable state of operation.

0

5

10

15

20

25

30

35

40

Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec.

District Heat Supply(MW)

2015 2016 2017 Average

Yearly average

Chapter 4 Conditions of Land and Climate

4-1

(1) Site of the power plant1) Candidate Site for CCPP to be newly constructed

Based on the results of field survey, coordination with local stakeholders (MOE · CEH · the staff of the Deva

CFPP) was implemented, and the following three are the candidate sites to a CCPP to be newly constructed.

Case 1: The site of Unit1, 2 of existing CFPP

Case 2: Coal yard

Case 3: An adjacent site of Unit 6 of existing CFPP

Figure 4-1 shows terminal points between the candidate site and utility equipment scheduled to be reused.

Figure 4-1 Terminal Points between Candidate Sites and Utility Equipment scheduled to be Reused


2 Characteristics of Each Candidate Site

Characteristics of each candidate site are shown in Table 4-1. Case 3 has the greatest economic merit when

comparing the three cases. However, land acquisition of private land is necessary in Case 3. There will be a risk

of delaying the construction schedule if it takes time to proceed the land acquisition. Therefore, it is important to

promote land acquisition in a timely manner so as to avoid the risk. The required land acquisition range is

shown in Figure 4-2.

It was confirmed at the Deva CFPP that the unit price of private land in Case 3 is estimated to be 8 to 20 EUR /m2.

Therefore, the cost of land acquisition is estimated to be around 61,000 to 152,000 EUR.

4-2

Table 4-1 Characteristics of Each Candidate Site

Items Case 1 Case 2 Case 3

Economy 15,800,000 EUR

: the cost of demobilization

for equipment below FL + 0

m the cost of relocation

cost for common equipment

in the same area

4,500,000 EUR

: The cost of power

consumption caused to the

increase of the power for

circulating water pump

Base

(Including the expense of

land acquisition)

Environment [Concerns]

Soil contamination

(Outflow of underground

polluted soil because of the

excavation)

The influence of asbestos

[Concerns]

Soil contamination

(Outflow of underground

polluted soil because of the

excavation)

Operability [Concerns]

Inconvenience for O & M

(The central control room

becomes farther than the

existing.)

Work

Schedule

[Concerns]

The delay of schedule

(Due to dismantling large-

scale existing equipment and

soil remediation)

[Concerns]


(Due to soil remediation and

the installation of common

equipment)

[Concerns]


(If the acquisition of the land

outside the CFPP is delayed)

Safety [Concerns]

Impact on the construction

(Due to the insufficient

earthquake resistance)

Impact on the existing

CFPP during operation

Evaluation

Results

Not recommended Not recommended Best

(Source: Prepared by the study team)

4-3

Figure 4-2 The Range of Private Land in the Candidate Site of Case 3


4-4

(2) The Climate of the Power Plant Site1) Climate

Romania is classified as a humid continental climates with hot summers (Dfb) in the Köppen-Geiger climate

classification (shown in Figure 4-3). This climate classification refers to a region where the average temperature of

the coldest month is less than 0 (or -3) ° C., the average temperature of the warmest month is between 10 ° C. and

22 ° C., and at least 4 months are 10 ° C. or more. Compared to a humid continental climate with dry winter (Dw),

humid continental climate has no significant difference in precipitation among the four seasons.

Table 4-2 shows each climate data of the project site in Deva.

The average monthly temperature is the highest at 28.6 ° C in August and the lowest at 0.8 ° C in January, and the

annual average temperature is 15.0 ° C.

The annual precipitation is 500 mm - 950 mm, and rainy season and dry season are not clearly separated throughout

the year as shown in the table below (monthly average precipitation 59.2 mm).

Figure 4-3 The Köppen-Geiger Climate Classification (Europe)

(Source: Hydrology and Earth System Sciences: "Updated world map of the Köppen-Geiger climate

classification")

4-5

Table 4-2 The Climate Data in Deva [Five-year Average] Period: 2013.4~2018.3

Items Units Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. YearlyAverage

SummerAverage

(Jun.-Aug.)

WinterAverage(Dec.-Feb.)

Average Air

Temperature° C 15.4 21 25.6 28.2 28.6 21.4 14 8.4 2 0.8 4.8 9.6 15.0 27.5 2.5

Precipitation mm 67.6 94.7 71.9 49.9 33.2 67.8 58.6 56.0 44.3 60.8 41.7 63.5 59.2 51.7 49.0

Relative

Humidity% 69.8 71.8 69.6 63 59 67.8 73.2 78 79.8 80.8 78.4 69.8 71.8 63.9 79.7

Atmospheric

Pressuremb* 1015 1013 1014 1014 1016 1016 1020 1019 1025 1020 1018 1015 1017 1015 1021

Wind

speedm/s 1.9 1.7 1.6 1.6 1.4 1.7 1.6 1.5 1.6 1.5 1.7 1.8 1.6 1.6 1.6

River

Temperature° C 11.2 15.0 19.2 20.9 21.8 18.1 11.9 6.4 3.6 2.4 3.7 6.8 11.7 20.6 3.2

* Milli bar: mb

(Source: HP WORLD WEATHER ONLINE URL: https://www.worldweatheronline.com/deva-weather-

averages/hunedoara/ro.aspx)

Figure 4-4 The Temperature and Precipitation in Deva (Five-year average)



The monthly average of the relative humidity is 59 - 69.6% in summer and 78.4 - 80.8% in winter. Atmospheric

pressure fluctuated from 1013 to 1025 mb throughout the year.

0

10

20

30

40

50

60

70

80

90

100

0

5

10

15

20

25

30

35

Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar.

Average Tempreture [ ] Monthly Precipitation [mm]

https://www.worldweatheronline.com/deva-weather


4-6

2) Water Intake Temperature of the River

Table 4-3 shows the water temperature of the Mures river, used for cooling of the condenser.

The annual average water temperature is 11.8 ° C, and the monthly average water temperature is 21.8 ° C which is

the highest in August and 2.4 ° C which is the lowest in January.

Table 4-3 Average Water Intake Temperature of the Mures River Unit: ° C

Year Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec.Yearly

average

2014 3.6 3.9 8.6 12.9 14.7 20.5 23.7 25.2 21.4 14.7 6.8 3.6 13.3

2015 1.2 2.6 6.7 9.7 16.4 19.8 23.2 22.8 19.2 12.7 7.0 4.7 12.2

2016 1.8 4.8 7.0 12.5 14.3 19.0 19.0 18.7 16.7 9.7 5.1 2.4 10.9

2017 - - 7.8 9.6 14.7 17.5 17.9 20.4 15.0 10.3 6.6 3.8 12.4

2018 2.8 3.3 4.0 11.8 17.4 18.1 - - - - - - 9.6

Average 2.4 3.7 6.8 11.3 15.5 19.0 20.9 21.8 18.1 11.9 6.4 3.6 11.8

Source: Provided by CEH

Figure 4-5 Water Intake Temperature of the Mures River (unit: ° C)



3) Climate Data

a) Air Temperature

The monthly average air temperature in Deva is shown in Table 4-4 and Figure 4-6.

According to the five-year average of the temperature, the annual average is 15 ° C, which is the highest at 29 ° C

in August and the lowest at 0.8 ° C in January.

According to each monthly data, the highest temperature of 31 ° C was recorded in July 2015 and the lowest

temperature of -4 ° C was recorded in January 2017.

0

5

10

15

20

25

30

Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar.

Monthly Average Max. Min. Yearly Average


4-7

Table 4-4 Average Air Temperature in Deva (unit: ° C)

Year Apr. May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar.Yearly

Average

2013-2014 15 21 24 26 28 18 15 10 1 3 7 11 15

2014-2015 16 20 24 27 27 21 15 9 3 1 3 9 15

2015-2016 14 23 26 31 30 24 14 9 4 0 7 9 16

2016-2017 18 20 27 28 28 24 12 6 -1 -4 4 12 15

2017-2018 14 21 27 29 30 20 14 8 3 4 3 7 15

Average 15 21 26 28 29 21 14 8 2 0.8 5 10 15



Figure 4-6 Average Air Temperature in Deva



b) Precipitation and Atmospheric Pressure

The monthly precipitation and atmospheric pressure in Deva are shown in Table 4-5, 4-6, and Figure 4-7.

Regarding the data of precipitation for five years, the average precipitation throughout the year is 59.2 mm. The

maximum precipitation 94.7 mm was recorded in May and the lowest precipitation 33.2 mm was recorded in

August.

Regarding the precipitation data for each month, the highest precipitation 137.8 mm was recorded in May 2017

and the lowest precipitation 16.0 mm was recorded in December 2015.

Regarding the precipitation data for each fiscal year, the highest precipitation 945.4 mm was recorded in FY 2017

and the lowest precipitation 517.9 mm was recorded in FY 2013.

-10

-5

0

5

10

15

20

25

30

35

2013 Apr. Oct. 2014 Apr. Oct. 2015 Apr. Oct. 2016 Apr. Oct. 2017 Apr. Oct. 2018 May.

Max: 31

Average: 15

Min: -4



4-8

Regarding the data of atmospheric pressure for five years, the average annual atmospheric pressure is 1017.1 mb.

The highest atmospheric pressure 1025.4 mb was recorded in December and the lowest atmospheric pressure

1013.1 mb was recorded in May.

4-9

Table 4-5 The Precipitation data in Deva (Unit: mm)


total

2013-2014 59.9 70.5 59.0 19.0 42.2 82.8 45.9 32.7 16.7 26.9 19.0 43.4 517.9

2014-2015 67.8 85.9 56.8 91.1 28.2 55.3 51.1 27.0 46.5 68.8 37.8 40.5 656.9

2015-2016 78.0 76.2 52.5 19.8 30.7 90.1 51.7 45.7 16.0 78.0 66.3 65.9 670.9

2016-2017 68.6 103.0 112.3 85.1 36.6 43.4 79.2 70.3 42.4 29.3 34.4 54.8 759.4

2017-2018 63.5 137.8 79.0 34.8 28.2 67.3 64.8 104.5 100.2 101.1 51.3 112.9 945.4

Average 67.6 94.7 71.9 49.9 33.2 67.8 58.6 56.0 44.3 60.8 41.7 63.5 710.1



Table 4-6 Average Atmospheric Pressure (Unit: mb)


Average

2013-2014 1015.9 1011.2 1013.4 1015.7 1015.4 1015.2 1021.0 1016.3 1026.8 1017.0 1017.5 1015.8 1016.8

2014-2015 1012.3 1012.5 1014.3 1012.4 1013.6 1016.7 1019.8 1020.1 1020.6 1018.4 1017.1 1020.2 1016.5

2015-2016 1017.3 1014.2 1016.3 1014.9 1016.4 1016.3 1020.4 1020.0 1031.7 1018.5 1016.2 1013.4 1018.0

2016-2017 1012.1 1012.5 1013.5 1015.1 1017.1 1017.9 1020.9 1019.9 1029.7 1024.2 1022.4 1017.1 1018.5

2017-2018 1016.3 1015.1 1014.2 1014.1 1016.5 1015.7 1019.0 1017.7 1018.2 1020.0 1015.9 1008.9 1016.0

Average 1014.8 1013.1 1014.3 1014.4 1015.8 1016.4 1020.2 1018.8 1025.4 1019.6 1017.8 1015.1 1017.1



Figure 4-7 Precipitation and Average Atmospheric Pressure in Deva



0

20

40

60

80

100

120

140

160

995

1000

1005

1010

1015

1020

1025

1030

1035

2013Apr. Oct.

2014Apr. Oct.

2015Apr. Oct.

2016Apr. Oct.

2017Apr. Oct.

2018May.

Precipitation [mm] Atomospheric Pressure [mb]




4-10

c) Relative Humidity / Wind Speed

Relative humidity and wind speed of Deva are shown in Tables 4-7, 4-8, and 4-8.

As for the relative humidity in terms of the 5-year average, the yearly average of relative humidity (RH) is 72%,

which the highest RH is 81% in January and the lowest RH is 59% in August.

Yearly average of wind speed over the past 5 years is 1.6 m / s, which the highest is 1.9 m / s in April , and the

lowest is 1.9 m / s in August.

Table 4-7 Average Relative Humidity of Deva (Unit: %RH)


Average

2013-2014 70 66 71 62 62 74 72 79 73 73 74 64 70

2014-2015 71 73 69 70 64 69 71 74 82 82 78 71 73

2015-2016 69 71 66 55 55 67 75 77 83 83 83 76 72

2016-2017 68 73 73 68 64 64 80 80 79 89 82 75 75

2017-2018 71 76 69 60 50 65 68 80 82 77 75 63 70

Average 70 72 70 63 59 68 73 78 80 81 78 70 72



Table 4-8 Average wind speed of the Deva (Unit : m/s)


Average

2013-2014 2.0 2.1 1.4 1.6 1.3 1.9 1.6 1.9 1.9 1.9 2.1 2.3 1.8

2014-2015 2.0 1.7 1.7 1.7 1.5 1.7 1.7 1.7 2.0 1.7 1.5 1.8 1.7

2015-2016 2.1 1.6 1.6 1.7 1.5 1.6 1.4 1.5 1.1 1.4 1.6 1.6 1.6

2016-2017 1.8 1.8 1.4 1.5 1.4 1.3 1.5 1.4 1.4 1.3 1.3 1.5 1.5

2017-2018 1.8 1.5 1.8 1.7 1.5 1.8 1.8 1.2 1.5 1.4 1.9 1.7 1.6

Average 1.9 1.7 1.6 1.6 1.4 1.7 1.6 1.5 1.6 1.5 1.7 1.8 1.6





4-11

Figure 4-8 Average Wind Speed and Average Relative Humidity of Deva



4) Natural Disasters

We confirmed through field survey that a large natural disaster disturbing the operation of the plant did not occur

around Deva and the project site, and the risk of natural disasters such as earthquakes and floods are low.

Also from the viewpoint of the degree of disaster based on the past earthquake records in the area, the situation of

the seismic activity and other factors of the earthquake area, coefficient Ks - a coefficient determined according to

the properties of the earthquake - around the Deva area is 0.08, which is low enough compared to coefficient Ks of

Japan, which is 0.7 to 1.2. Based on the value of Ks, the risk of earthquakes is low.

As for the ground characteristics, coefficient Tc is 0.7 seconds, and Deva area is classified as the second type ground.

It can be understood that the hardness of the ground is at ordinary degree.

From the above, it can be considered that the risk of natural disaster is low according to Deva area’s past natural

disaster record, the earthquake record and the ground based evaluation index.

Table 4-9 Earthquake Relation Coefficient of Deva

coefficient Deva Japan

Earthquake area coefficient

Ks

0.08 0.7 1.2

Ground period

Tc (second)

0.7


0

20

40

60

80

100

120

140

160

0

0.5

1

1.5

2

2.5

2013Apr. Oct.

2014Apr. Oct.

2015Apr. Oct.

2016Apr. Oct.

2017Apr. Oct.

2018May.

Wind Speed [m/s] Relative Humidity [%RH]


4-12

Table 4-10 Ground Type and Ground Cycle

Ground type Ground period Tc (second) Characteristic

Type 1 ground 0.4 Rigid

Type 2 ground 0.6 Normal

Type 3 ground 0.8 Soft


4-13

(3) Characteristics of Land1) Soil

Soil monitoring at the project site was conducted from 2016 to 2017. As for monitoring points, points with high

probability of soil contamination in existing CFPP sites such as coal storage area, petroleum storage areas, and fuel

storage areas were selected. The location of these points are displayed in Figure 4-9.

The results meet the environmental standards of Romania as shown in the table below. Although the risk of soil

contamination in and around the site of the Deva CFPP is low, the study team encourage to implement another soil

survey at the relevant place once again before the implementation of this project.

Figure 4-9 Location of Soil Survey Site

Point 1 : Railway station

Point 2 : Coal storage yard

Point 3 : Mintia (out of the map range)

Point 4 : Oil fuel discharge

Point 5 : Transformer oil reservoir

Point 6 : A point 800 m away from the power station site (outside the map range)

Point 7 : Mintia (out of the map range)

Point 8 : Oil fuel storage

(Source: prepared by the study team based on interview with CEH and Google Earth)

4-14

Table 4-11 Results of Soil Monitoring at Deva CFPP

Analysis

target

Analysis

methodUnit

Analysis result Regulation

value *Point1

Point2

Point3

Point4

Point5

Point6

Point7

Point8

Cu

SR EN

15309/2007mg/kg

30 63 33 46 49 84 29 21 250

Zn 118 159 112 129 145 216 105 107 700

Pb 85 71 30 42 47 65 25 29 250

Ni 32 50 27 30 41 79 13 32 200

Cd <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 5

As <0.1 1 <0.1 1 <0.1 3 <0.1 <0.1 25

Cr 65 97 63 52 65 126 42 53 300

Co 10 20 8 5 6 17 6 3 100

Mn 731 605 695 499 585 620 730 331 2000

SO4 1943 4201 1132 1949 4199 3804 1058 1452 5000* Regulation value: ORDER No.756/1997

(Source: prepared by the study team based on CEH supply data)

2) Terrain

There are three areas as candidate areas for installation of CCPP to be newly constructed.

In the field survey, no area has undulations in the topography, no topographical constraints have been confirmed for

CCPP construction, and therefore it is assumed that topographical constraints are trifled.

Also, as a reference of the local topography, Figures 4-10 to 13 show in-site photographs taken by the study team

and the floor plan showing the locations where each picture was taken.

4-15

(Sou

rce:

pre

pare

d by

the

study

team

bas

ed o

n G

oogl

eEa

rth)

Figu

re 4

-10

Site

Sur

roun

ding

Vie

w

4-16

Figure 4-11 Reference Photo 1/3[1]

Intake mouth

[1]

Intake water source

[2]

Switch yard

[3]

District heat supply equipment

[4]

Demineralized water tank

[5]

Training house[6]

Demineralized water equipment

[6]

Demineralized water equipment


4-17


Stack area when looking at unit 1 to 6

[7]

Unit 1 area

[8]

Flue

[9]

Service air receiver tank

[10]

Coal yard for unit 1 to 3

[11]

Coal yard for unit 4 to 6[12]

Carriage conveyor

[13]

Carriage conveyor(Source: prepared by the study team)

4-18


Slurry equipment (remnant reuse desired)

[15]

CCPP installation candidate location (Case 3)[16]

Private property (In case 3, accommodation is necessary)

[17]

Transformer area[18]

Transmission system

[18]

Transmission system[19]

Circulating water pump

[19]

Traveling screen


4-19

: Vegetable soil layer

: Sand clay layer

: Gravel pebble layer

: Basement rock formations

(Mudstone, sandstone)

: Geologic boundary

3) Civil Works

a) Layer

An overview of the layer at the Deva CFPP is shown in Figure 4-14.

The foundation of the main building of the Deva CFPP was built on the foundation rock to bear the following loads.

Allowable value for basic load: 8 deca newton (daN) / cm2

Acceptable value for accidental load: 10 daN / cm2

Fig. 4-14 Overview of the Layer at the Deva CFPP

Geological features Legend


b) Foundation work

The study team confirmed the record of 7.1 meters piling at the time of construction of the Deva CFPP, and

confirmed that there are no problems with the foundation.

It is assumed that it is unnecessary to take special countermeasures even if the foundation is refreshed since the new

candidate site is within the existing power plant premises and there is no problem at the existing power plant.

However, since concrete candidate location isn’t decided yet, the study team recommend that measurements of the

layer on candidate construction location be implemented at the detailed designing stage.

Chapter 5 Basic Design of the Power Plant Equipment

5-1

(1) Basic Design of CCPP Equipment

1) Project Outline

The planned CCPP will be installed in Deva site in the Hunedoara region. The net power output will be about

350 MW.

As mentioned in Chapter 4, according to the records around the Deva area in the past five years, the average

temperature is 15.0 ° C. In addition, the highest and lowest temperature around the Deva area in the past is

40 ° C and -29.4 ° C *. Therefore, specifications that enables operation under temperature conditions of -30 °

C to 40 ° C shall be set during detailed designing stage.* Source: msn Microsoft corporate management portal site

URL: http://www.msn.com/en-us/weather/today/Deva,Hunedoara,Romania/we-

city?iso=RO&el=f1nVUt7%2BwfnEUPGPEEr7QQ%3D%3D

Fuel gas will be supplied by Trans gaz. Also, since the fuel gas supply source pressure (10.5 bar) is lower

than the GT required fuel gas pressure (the required pressure is different depending on Original Equipment

Manufacturer (OEM) but maximum is about 40 bar), installation of the fuel gas compressor is required.

During detailed designing stage, the specifications of the compressor shall be set based on the combustion

gas pressure requirement of GT.

As mentioned in Chapter 3 (2) 2) , fresh water will be supplied by city water and river water near the power

plant site.

As for the cooling system of the steam turbine condenser, the study team evaluated the technology and

economics aspects. As a result, using river water-cooled condenser and reusing open type forced circulation

cooling tower of existing equipment is recommended.

2) Operation Requirements

The main components and their auxiliaries shall be designed to ensure that start-up and operation are achieved

without troubles throughout the designed life time of the CCPP to be newly constructed. Adequate

redundancies for equipment shall be kept to achieve high availability. The main components and their

auxiliaries shall be designed to enable start-up and to reach rated load by pushing a single start button. The

entire plant shall be suitable for continuous load operation. All equipment shall comply with Romanian rules

such as the Romania GC.

a) Plant Requirements

http://www.msn.com/en-us/weather/today/Deva,Hunedoara,Romania/we

5-2

The new plant shall have high thermal efficiency and reliability. The CCPP to be newly constructed shall be

designed to withstand the anticipated annual operation in this project.

b) Start-up Time Schedule Requirements

The start-up time shall be as short as possible to cope with the function of the CCPP to be newly constructed.

This CCPP shall be designed to meet such a start-up time as specified in table 5-1.

The start-up time for the CCPP to be newly constructed shall be defined as the time from when the start button

is pushed until the rated load conditions are achieved, provided that a condenser vacuum is established and

the CCPP to be newly constructed is ready for start. The start-up time for simple cycle shall be defined as the

time necessary from ignition to rated load. The time for air purging of GT exhaust line and synchronization

shall be excluded.

Table 5-1 Requirement for Unit Starting Time in Each Mode (for Example)

Type of Start-up Time as CCPP (min.) *1 Time as Simple Cycle (min.)*2

Cold start after stop of more than 36 hours Max. 240 Max. 25

Warm start after stop of less than 36 hours Max. 180 Max. 25

Hot start after stop of less than 8 hours Max. 120 Max. 25

Very hot start after stop of less than 1 hour Max. 60 Max. 25*1. The time from pushing the start button to the rated load.*2. The time from the ignition to rated load.


c) Service Life Time

The CCPP to be newly constructed and the associated equipment shall be designed and constructed to

withstand the service time as specified below:

Minimum service time = 20 years

Equivalent service hours = 120,012 hours on a rated load basis

(24 × 365 × 20 × 0.685, 0.685: capacity factor)

The CCPP to be newly constructed shall be designed for a continuous load operation with 6,001 actual

operating hours per year on the basis of the rated load. The hours necessary for the starting up and shutting

down cycle are not included in the above operating hours. Throughout the service time, the new plant and the

associated equipment shall continue to be operated with high efficiency, high reliability and excellent

economy.

5-3

d) Start-up and Shutdown Time

The start-up and shut-down operation of the CCPP to be newly constructed shall be performed automatically

from the Central Control Room (CCR).

Full supervisory and control functions shall be provided for the safe, reliable and efficient operation of the

new plant.

The CCPP to be newly constructed shall be capable of being auto-synchronized and initial-loaded from the

CCR.

As a basis for design of the new plant, it is assumed that the new plant shall operate on a rated load basis for

the service time of 20 years, during which highly efficient and reliable operation shall be maintained.

e) Compliance with the Grid Code

All generators connected to the grid system shall comply with the GC. For example, frequency variation,

ability to island, black start capability, etc. must comply with the GC.

3) Plant Performance

CCPP of this project is composed of candidate GT procurable in the current world market and bottoming

system (HRSG and ST system) matching the candidate GT. The performance of CCPP varies depending on the

candidate GT and the form of the bottoming system. In addition, the performance of CCPP also varies

depending on atmospheric conditions and fuel gas properties.

Prerequisites for performance calculation in this survey are as follows.

a) Atmospheric Condition

Based on the survey results mentioned in Chapter 4, atmospheric condition in this project site is as follows.

Type of Site Condition Rated Value

Dry Bulb Temperature 15.0 ° C

Relative Humidity 71.8 %RH

Wet Bulb Temperature 12.1 ° C

Barometric Pressure 101.7 kPa

b) Fuel Gas Properties

Based on the survey results mentioned in Chapter 3, atmospheric condition in this project site is as follows.

5-4

Chemical composition vol. %

Methane 98.9594

Ethane 0.3788

Propane 0.1052

Isobutane 0.0173

Normal butane 0.0146

Isopentane 0.0041

Normal pentane 0.0024

Azole 0.4031

Carbon dioxide 0.1143

total 100.00

Net heating value (LHV)* 49,509 kJ/kg

* calculated by GT-Pro from above chemical component at supply temperature 25.0 ° C

c) Bottoming System Type

CCPP consists of a combination of Brayton cycle (topping system) by GT and Rankine cycle (bottoming

system) by HRSG-ST.

The performance of CCPP varies depending on what kind of bottoming system is planned for the

accompanying GT topping system. Generally, the more complicated the cycle of the bottoming cycle is, the

better the performance of the CCPP will be achieved.

5-5

Figure 5-1 CCPP System Outline


4) Specification of Power Generation Equipment

ANRE confirmed that the design standard of each power generation equipment needs to comply with the EN

(European Norm) standard.

a) GT and Auxiliary Systems

I) Design Specific Standard

The GT system is basically designed based on the followings.

ISO 3977-3 ‘‘Gas turbines-Procurement-Part 3: Design requirement’’

ISO 21789 ‘‘Gas turbine applications-Safety’’

II) GT

The GT design shall have a minimum number of bearings, and shall be located on a steel frame or on

adequate steel structures and concrete foundation, which size is based on larger of follows, the transient

maximum transmittal torque imposed on the shaft in case of any short circuit of the generator or out-of-

phase synchronization.

GT has a starting device, a lube oil device, an intake air filter device, a fuel gas supply device, a turning

device, and a control and monitoring device as accessory equipment. In addition, it is designed to run safely

with high reliability and high thermal efficiency in the specified fuel gas property range.

Fuel Gas

Intake Air

ST

GT Generator

STGenerator

HRSG

Stack

Fuel Gas

Intake Air

GT System 1

GT System 2

GT ExhaustGas

Feed WaterPomp

Topping System Bottoming System

GT

GTCondenser

GT Generator

5-6

Considering the following, the study team recommend GT to be an indoor type and equipped with an

enclosure that satisfies the noise regulation.

Because Romania has a lot of snowfall in winter, indoor type is preferable considering the operability

(inspection and maintenance).

The leading CCPP (Brazi, Bucharest West) in Romania adopts indoor type.

As a countermeasure against cold climate, in general, it is necessary to install anti-icing system suitable for

the applying GT model. However the installation of the anti-icing system is unnecessary depending on the

model of GT. This simplifies the equipment and reduces the running cost.

By installing the bypass stack, early start of commercial operation by GT simple cycle operation would be

possible, but it is not installed in this project, considering the following disadvantages.

increase in construction cost

decrease in power generation efficiency

Since the power generation efficiency of GT’s independent operation is low, the possibility of future GT’s

independent operation is low in the first place

Regarding the cooling tower, as stated in Chapter 3, since the existing cooling tower’s capacity satisfies

CCPP to be newly constructed required specifications, and the visual inspection resulted equipment’s

condition as good, the existing cooling tower can be reused. However, when operating the existing cooling

tower, it is necessary to operate 2 units. Therefore, if the existing cooling tower is reused for CCPP to be

newly constructed after all existing CFPP are discontinued, it is necessary to consider the operation method

separately.

The control system of GT shall be capable of the following operation.

Constant load operation in all load bands from minimum load to rated load

Governor-free operation

Turbine inlet temperature constant operation

Minimum load operation not exceeding 30% as combined cycle, with all turbine bypass valves closed and

rated load imposed on ST

Automatic gas purge cycle that can remove gas in all exhaust systems up to GT and stack exit

gas purging time is adjustable

Unit does not trip due to load interruption at rated load and can be easy to re-synchronize

The steam for the cooling of the combustor is supplied from the auxiliary boiler at the time of start-up, and

switched to the steam of HRSG when it becomes available.

The GT casing is a horizontal division which enables easy maintenance and easy access to turbine blades

and vanes etc.

5-7

Heat insulation materials and sound insulation materials of GT can be easily replaced by removing them at

regular inspection and irregular inspection. Heat insulation materials are asbestos-free, refractory,

chemically inert material and covered with sheet metal. It shall be designed so that lube oil does not penetrate

heat insulation materials and the sound insulation materials.

Sufficient working space is secured so as not to obstruct the surrounding work around the GT and piping,

cables, walls etc. should not interfere working space.

The journal bearing shall be sleeve type. In the steady operation state, the thrust force in the axial direction

is one direction, and this axial thrust is supported by the thrust bearing. All bearings shall be fluid bearings

and shall be equipped with an outlet lube oil thermometer / monitoring device and a vibrometer / monitoring

device. The monitoring device sends an alarm or trip signal according to the manufacturer's standard.

The important part inside the GT should be checked by borescope.

III) Starting System

The starting device and its power supply shall be suitable for accelerating the GT generator, purging for a

long time and compressor washing operation.

The rating of the starting device is designed considering that start and accelerate torque can be generated

with proper margin from the stopped state to the rated rotational speed within 25 minutes (excluding the

time required for purging and synchronization) under the atmospheric conditions of all the specified range

of the GT generator.

There are two possible ways of starting devices for large capacity GT generators.

Thyristor starting method (by synchronous generator / motor and thyristor (stationary frequency

converter))

Torque converter starting method (with cage type electric motor and torque converter)

It is desirable that the starting device has no restriction on the times of continuous start-up.

If the lube oil pressure is not sufficient to rotate the GT generator, an interlock is made so that it can’t start-

up.

The starting device automatically stops after getting disconnected with GT before reaching the maximum

permissible rotational speed. Normally, the starting device gets disconnected with GT when the GT reaches

the self-supporting speed or the no-load rotational speed, and this device is stopped during normal operation.

If disconnection fails, the starting sequence is automatically canceled.

5-8

When the generator is at the standby state, the generator can start-up immediately from any stopped state,

despite what caused the stoppage.

The starting device includes a start preparation operation such as a turning operation, and enables manual

and automatic start as follows.

Manual start : The start-up sequence proceeds to cranking, purging, igniting, holding at the minimum

governor setting rotational speed, and shifts to the next step.

Automatic start : The start-up sequence automatically proceeds to the lowest governor setting speed,

automatically prepares for Synchronization or a preset load.

The starting control device has an automatic purge function to ensure safe operation.

IV) Lube Oil System

The lube oil system is basically designed according to the latest version of API 614 or requirement of

equivalent standard. The lube oil system is supplied to ST, GT, generator and exciter bearings and includes

a jacking oil system (if applicable), an oil purifier and a GT generator oil drain system.

The lube oil system holds the lube oil necessary for the operation of ST, GT, generator and exciter. Lube oil

is supplied to each bearing at the oil amount and pressure satisfying the system requirements of each oil

pump, and lube oil that finished work is recovered again in the main oil tank according to the loop system.

Strainers and an oil purifier are installed to remove dust contained in the oil collected from each bearing.

The lube oil system is equipped with a spare machine that can secure the oil amount and pressure so as not

to hinder the plant operation even when the oil pump stops due to problems or the like. When site power

source is lost such as blackout, it prevents bearing damage by emergency oil pump to automatically operate

by using DC power supply.

In the multi-shaft combined cycle, it is necessary to install an oil purifier in the lube oil system of ST to

remove moisture by turbine shaft seal steam or the like.

For the stable operation of ST, GT, generator etc., the following alarms are mainly provided for the lube oil

system. When abnormal state continues, the unit is stopped to protect the equipment.

Lube oil pressure low

Lube oil tank level low

The lube oil system is equipped with a fire extinguishing device available to extinguish the lube oil in the

5-9

oil tank and around the bearings of ST, GT, generator etc..

As lube oil deteriorates by use and becomes a factor of troubles such as poor lubrication, the lube oil is

regularly replenished or replaced in order to restore the properties. Lube oil deterioration depends onoperation conditions, and replenishment and replacement timing becomes fluid, so it isnecessary for lubricant to be procured locally.

Figure 5-2 shows an example of the lube oil system.

5-10

Figure 5-2 An Example of Lube Oil System


V) Fuel Supply System

The combustion equipment of GT shall be a gas-burned design corresponding to the specified fuel gas

properties of domestic Romania.

The terminal point of the fuel gas piping is located at the power plant boundary. By this survey, it was

confirmed that the pressure at the terminal point was 10.5 bar. Distribution data of dust particles necessary

for the design of pretreatment equipment is investigated during detailed designing stage.

As mentioned in Chapter 3 (1) 8), existing equipment can be reused to the fuel gas receiving station, and it

is necessary to install equipment after the fuel gas receiving station.

Fuel gas supply system will have the below equipment to adjust gas condition for firing in gas turbine.

Shut-off valves

Main oil tank

Pressurecontrolvalve

Oil cooler

Strainer

Strainer

Auxiliary oil pump

Turning oil pump

Emergency oil pump

Exhaust fans

To turbinebearing

From turbinebearing

Torque converterStarter motor

Main oil pump

Turning device

Generator

GT

For torqueconverteroperation

5-11

Flow meter

Separators for removing foreign substance

Gas compressor or gas pressure reducing equipment (If necessary)

Gas heaters (If necessary)

Gas flow and pressure regulating systems

Gas detectors

Fire extinguish system

Gas sampling systems (if required)

Figure 5-3 Preliminary Flow Diagram of Gas Supply System


Specifications of these equipment are determined for the selected gas turbine requirements and gas

specification. Terminal specification of the gas treated in fuel gas supply system should be confirmed by

GT supplier during the tendering period.

Conditions necessary for designing other fuel gas supply equipment are investigated during detailed

designing stage.

VI) GT Intake System

i) General

Air supplied for GT combustion is taken in through the inlet port installed outside the GT building.

The intake port is installed in such a position so as not to take in exhaust gas from the stack of HRSG.

The hood is designed to enable easy maintenance of the air intake filter. After passing through the filter,

the supplied air is guided to the inlet of the GT's compressor. The intake system consists of an inlet

louver, a filter (multistage type), a sealed type duct from the filter to the compressor, a screen for

protecting foreign matter, and a soundproof equipment. The number of inspection ports for maintenance

inspection of the intake section should be minimized.

The GT may be equipped with the inlet air cooling system to augment the GT power output.

5-12

Figure 5-4 shows an example of a three-stage intake filter system.

ii) Intake Filter System

The intake filter collects dust in the air and has a multistage dry filter to prevent damage to the GT

compressor blades and vanes.

The intake filter is selected the one suitable to reduce the sand and the salt content in the atmosphere to

the level that does not impair the GT life under the most severe conditions of the site.

The design of the intake air filter is made so as to minimize the pressure loss of the intake system. A

differential pressure monitoring equipment of each stage filter is installed.

iii) Intake Duct

The intake duct is composed of expansion joints, guide vanes, support legs, supporting steel structures,

vibration isolators, and silencers.

Expansion joints are installed so that loads and forces are not applied to the intake flange of the GT in

order to follow the expansion and contraction and vibration caused by the change in intake air

temperature.

Nuts, bolts, rivets are not used on the inner surface of the air intake duct,,which is installed after the

filter ,to prevent contamination of the GT.

iv) Silencer

A silencer packed with sound absorbing material in the panel case is provided to reduce the noise leaked

from the suction port to a specified level through the duct from the GT compressor.

5-13

Figure 5-4 An Example of three-stage Intake Filter System


v) GT Inlet Air Cooling System

There are mainly three types of inlet air cooling system as follows, and the features of each type are

shown in Table 5-2.

Evaporative type

Fogging type

Chiller type

In the case of the chiller type, the intake air is cooled by the heat exchanger installed in the intake duct.

In the case of the fogging type, demineralized water is sprayed from the nozzle installed in the intake

duct. In the case of the evaporative type, demineralized water flows down inside the equipment

installed in the downstream of the intake air filter. The intake air is cooled by utilizing the latent heat of

evaporation. Unlike the chiller type, if the fogging type or the evaporative type is selected, relative

humidity rises because the amount of moisture contained in the inlet air increases.

5-14

Table 5-2 Features of Inlet Air Cooling SystemChiller Fogging Evaporative Cooling

Type

Air cooling coil located in the inletair duct room cools intake air bysupplying cold water from chillersystem.

The water droplets evaporatequickly, and inlet air is cooled.

Install the eliminator in thedownstream of the intake air filterand let the demineralized water flowdown. The intake air is cooled byfalling water evaporation.

Configuration

Advantage

• Relatively high increase of the gasturbine output

• Air can be chilled regardless ofhumidity

• Low auxiliary power consumption• Low installation and operation

cost• Installation required area is small

• Low auxiliary power consumption• Construction equipment is simple

and easy to operate• Relatively low water consumption

Disadvantage• High installation cost• High auxiliary power

consumption

• Effect is lower in humid climates• Relatively low increase in the gas

turbine output

• Effect is lower in humid climates• There is intake pressure loss even

when not in use• Relatively it has the lowest increase

in the gas turbine output (Becauseof low evaporation efficiencycompare with fogging type)


VII) O&M

The main components of CCPP are GT, HRSG, ST and generator. Especially GT operates with high

temperature combustion gas, so cracks, corrosion, oxidation, deformation and coating peeling of hot parts

such as combustors, stationary blades, and rotating blades are likely to occur. Therefore, it is common to

determine the regular inspection intervals based on the life of the GT hot parts. And, regular inspections for

the ST, generator and HRSG are generally carried out during the GT inspection period. In addition, it is

recommended to decide on the GT regular inspection period based on EOH considering the total start and

stop times, instead of the actual operation hours. The operation and maintenance (O&M) cost to be

considered in this project are shown below.

- Long Term Service Agreement (LTSA): Expense and assumption after commercial operation (included

in loan)

- Maintenance cost other than LTSA (ex. labor costs, chemicals)

- Training costs

- Spare parts costs

5-15

i) Examination of the LTSA

Among the main equipment of CCPP, the GT has the highest failure rate, and its maintenance level greatly

affects the operation rate of the entire plant.

Hot parts of the GT, which are exposed to gases of 1,000 ° C or more, will be seriously deteriorated and

damaged. Therefore, manufacturers have set the expected life for each of these hot parts and the

recommended inspection intervals of the GT. Normally, it is necessary to inspect, repair, and replace these

hot parts in accordance with the inspection interval until the service life is reached. An example of the

inspection interval of the GT is shown in Table 5-3.

Table 5-3 Inspection Interval by Type (Example)

Type of Inspection Inspection Interval/ EOH

Combustor Inspection

Hot Gas Pass Inspection

Major Inspection

12,000 hour

24,000 hour

48,000 hour


Because the hot parts of the GT are made from superalloy materials of high heat resistance, specialtechniques and special equipment are required for the repair of these parts. Therefore, most users requestthe GT manufacturer or other repair company to repair them.

ii) Characteristics of GT long-term maintenance contract

In the operation of CCPP, it is common to sign long-term maintenance contracts, namely LTSA, between

the owner and GT manufacturer. The GT manufacturer does overall maintenance of GT for a certain

period of time. Generally, the contract term is from the contract date to the major inspection.

The characteristics of the LTSA are summarized in Table 5-4.

5-16

Table 5-4 Characteristics of the LTSA

LTSA Individual Order

Management of

inspections, repairs,

replacements for hot parts

Packaged management by supplier Management by user

Operation status

monitoring for GT (option)

Remote monitoring by supplier

Contributing to improved operation

ratio

Monitoring only by user

Stationed engineer (option) Yes No

Ensured operation ratio

(option)Yes No

Payment of inspections,

repairs, replacement costs

for hot parts

Packaged price and payment of a set

price each month

The same level or less than total price

of individual ordering

Supplier is charged for unexpected

repairs and replacements (excluding

the case of user responsibility)

Payment of price

corresponding to repairs and

replacements for each

inspection

User is charged for

unexpected repairs and

replacements


In the case of the LTSA, the provider collectively manages the necessary range and timing of inspection,repair and replacement of hot parts, instead of the user. In addition, as an optional scope, the supplier alsoprovides a service to monitor the operation status of the plant in real time at the remote monitoring centerof the supplier by introducing a remote monitoring system. This service will provide the user with thenotification of anomaly during the plant operation and support the trouble shooting when a trouble occurs.As a result, this service can contribute to improving the operation rate.

Furthermore, in the case of adopting the LTSA, the cost of inspection, repair and replacement of hot partscan be set as a package price. Since these expenses are determined at the time of contract, it is possible tostably manage by leveling the variable costs of large fluctuations such as unexpected repair andreplacement of the hot parts.

iii) Introduction of the LTSA into this Project

As described in Chapter 6, since the LTSA would greatly contribute to the stabilization of the CCPP to be

newly constructed operation and company management, it is a welcomed process from the viewpoint of

financial arrangements. Therefore, the study team recommends to include LTSA to initial package for this

project.

5-17

b) HRSG and HRSG Auxiliaries

I) General

HRSG is the equipment that supplies steam to the steam turbine, which is generated by recovering the

residual heat of the exhaust gas from the gas turbine. HRSG is classified into several categories depending

on the flow direction of gas turbine exhaust gas in HRSG, the method of circulating the internal fluid of

the evaporator of HRSG, and whether the steam turbine exhaust is reheated or not. The classification is

shown in the table 5-5.

Table 5-5 Classification of HRSG Category

Exhaust Gas Flow

Direction

Fluid Circulation

MethodReheating Pressure

Horizontal Gas Flow Type

/Vertical Gas Flow Type

Natural Circulation

/ Forced Circulation

Non-Reheating Type

/ Reheating Type

Single-Pressure Type

/ Multiple-Pressure Type


The design of HRSG is outdoor type and the HRSG is designed to accept the maximum exhaust flow rate

at GT rated load at the specified minimum ambient temperature. The heat transfer surface is designed

taking into account the variation pattern of the temperature / flow rate of the GT exhaust under various

atmospheric conditions and GT load.

HRSG shall be such that excessive thermal stress does not occur against start and stop conditions specific

to GT. HRSG is designed to operate with GT exhaust when burning specified fuel gas.

As mentioned in this chapter (1) 4) a) II), since the bypass stack has many disadvantages in this project, it

is not installed.

HRSG shall generate steam under prescribed conditions while minimizing exhaust pressure of GT. The heat

transfer module is shipped as large as possible to satisfy the transportation condition in order to shorten the

installation period.

Figure 5-5 shows an example of a vertical HRSG.

5-18

Figure 5-5 An Example of a Vertical HRSG


The capacity of the drum shall be such that the HRSG will not trip before the auxiliary feedwater pump is

activated if one boiler feedwater pump trips.

HRSG is constructed with drums, heaters, reheaters, evaporators, economizers, headers, downpipings, and

accessory piping and is supported by the steel structure. This structure is independent from other buildings,

except for connecting parts such as a passage, a pedestal, a staircase, etc. necessary for inspection and

maintenance of HRSG.

HRSG is designed with outdoor specifications and is equipped with a roof and enclosure to protect people

and equipment (drum accessories, valves and circulation pump) from the external environment.

HRSG and accessories and accessories are considered to be able to handle both rated load and partial load,

especially in the design of parts and structures. HRSG is designed so that temperature matching with ST

can be performed in both constant pressure operation and variable pressure operation.

It has a door for maintenance and inspection which makes it easy to inspect the gas flow path part of the

HRSG, the heat transfer pipe and other pressure resistant parts, and the structure of the door has a seal

structure to prevent gas leakage to the atmosphere.

II) Design and Operating Conditions

5-19

HRSG is designed to be suitable for normal and abnormal operating conditions of CCPP based on

operational records. The gas side of the HRSG is designed to correspond to the maximum temperature,

pressure and flow rate of the gas in all predicted operating conditions (including trip).

Upon rated load interruption, the thermal load of the HRSG is discharged to the condenser by the bypass

system without operating the safety valve.

The HRSG is planned to be started at the same time as the GT and is designed to be able to continuously

operate efficiently in the rated load operating range of GT.

Water quality of feed water should meet HRSG and ST requirements according to applicable standards.

III) Design Standards

All design, manufacture, construction, test, inspection shall be in compliance with applicable standards,

standard provisions or recommendations. All pressure-resistant parts, accessories and assemblies are

designed, constructed and inspected according to the requirements of approved inspection agencies.

IV) Design and Structure of HRSG

i) Exhaust Gas Flow Direction

The boiler main body is classified into vertical type and the horizontal type depending on the direction of

gas flow. Regarding the exhaust gas flow direction of HRSG, in the case of adopting the same type as gas

turbine, the degree of performance is almost the same for both the vertical type and the horizontal type.

The horizontal type of HRSG can get circulating force from the difference in fluid density caused by the

heat transfer tubes vertically arranged, so the natural circulation is adopted for this type. For the vertical

type the heat transfer tubes are horizontally arranged, so there is either a natural circulation (circulating

force is secured by a drum height) or a forced circulation (boiler water is forcibly circulated by pump).

The features of each type are shown Table 5-6.

5-20

Table 5-6 Exhaust Gas Flow Direction Comparisons

Description Vertical Gas Flow Type Horizontal Gas Flow Type

Installation Area Base Large

Height of HRSG Base Low

Scaffold for Internal Inspection Unnecessary Necessary

Support of Heat Transfer Tube Suspension Type Bottom Support or Top

Support

Circulation System Natural or Forced Circulation Natural or Forced Circulation

Operability Base Same

Equipment Cost Base A little lower

Operation Cost Base Same


ii) Fluid Circulation Method

HRSG could be natural or forced circulation type. In natural circulation units, the thermal head

differential between water and steam-water mixture is responsible for circulation through the system.

In forced circulation units, Boiler Circulating Pumps (BCPs) circulate the steam-water mixture through

the tubes of the evaporator to and from the drum.

Advantages claimed by the forced circulation design, are their quick warm/ hot start-up capabilities.

However, natural circulation designs do not need circulation pumps to maintain the circulation of steam-

water mixture through the evaporator tubes. Therefore, they can save operating costs and relieve concerns

about pump failure or maintenance. The probability of the usage of natural circulation type HRSGs is

higher because of the absence of the critical rotating equipment such as the circulation pumps.

There is no difference in cold start-up time because the bulk of the time is spent on heating the metal and

the water of the evaporator module in the transient heat up phase. This process is nearly the same whether

it is a natural or a forced circulation HRSG. In summary, both natural and forced circulations HRSGs are

widely used in the industry, while the natural circulation design has a merit over the forced circulation

design as discussed above. Hence the natural circulation types HRSG are proposed for this project.

iii) Heat Transfer Tube

The heat transfer tube shall be a drawn steel pipe or an electric resistance welded steel pipe based on

experience of the manufacturer. The design, manufacture and testing of heat transfer tubes shall comply

with applicable standard specifications.

Appropriate circulation ratio is set in order to minimize disturbance of water circulation which can occur

5-21

at the time of rapid start-up and load change.

The heat transfer tube has a spiral fin attached to its outer surface by welding. By improving the heat

transfer characteristics by expanding the heat transfer area, the number and length of the heat transfer

tubes are reduced, thereby making the entire HRSG compact.

All welded connections between the heat transfer tube and the header shall be located outside the gas

path and shall be maintainable.

iv) Superheater and Reheater

The arrangement of the superheat pipes of the high pressure superheater is such that when the

temperature of the steam supplied to the ST is at the assumed maximum ambient temperature and the GT

is operated at the continuous base load, the temperature reduction function is not used and the steam of

the ST is designed not to exceed the temperature limits of steam valves and ST rotors.

The superheater and the reheater correspond to the constant pressure operation and the variable pressure

operation and are designed to correspond to the change characteristics of the exhaust gas flow rate of GT.

The high pressure, medium pressure and low pressure superheater are designed so that the steam flow

rate in the heat transfer tube is uniformly distributed in the rated load range. The superheater and the

reheater are designed to have a structure that allows drain to be discharged completely and design

considering operation without steam at start-up.

v) Evaporator

High pressure, medium pressure and low pressure evaporators are designed so that they can operate

without vibration in the rated load range and evenly distributed in the heat transfer tubes. Element of the

evaporator shall be structured to drain.

vi) Economizer

High pressure, medium pressure and low pressure economizers are designed to operate stably in a single-

phase flow of fluid alone throughout the rated load range of HRSG, and the elements of the economizer

are drainable.

vii) Condensate Preheater

The condensate preheater is provided as the final heat recovery module in order to maximize the exhaust

heat recovery efficiency by lowering the temperature of the exhaust gas discharged from the HRSG. The

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condensate preheater is designed to withstand the cutoff pressure of the condensate pump.

viii) Steam Temperature Control

The outlet steam temperature of the superheater and reheater is controlled by a direct spray type

temperature reducer. The capacity of the temperature reducer is determined taking all the operating

conditions into account.

The temperature reduction spray water adjustment valve is equipped with an electric stop valve on the

common line, and when the steam temperature falls below the set temperature, the stop valve is

automatically closed by interlock to prevent water induction to ST.

ix) Safety Valve

The number, capacity and installation position of the safety valves are specified according to the

requirements of the relevant international standards. The capacity of the safety valve such as thesafety valve at the superheater outlet and the drum is planned considering the maximumevaporation amount of HRSG and the like.

x) Thermal Insulation of the HRSG and Safety Valve

The inner and outer surfaces of the whole HRSG are kept warm and the outer insulation is applied to an

all-weather-type suitable for outdoor installation.

The heat insulating material shall be suitable for continuous operation at the maximum operating

temperature.

xi) Inspection Door

For maintenance and cleaning of the gas path and pressure resistant part of the HRSG, install inspection

doors of an appropriate type and size that can freely enter and exit the part.

xii) Blowdown and Drainage

The seat of the continuous blowdown is provided on the drum. The seat is provided at a position where

the condensed drum water can be discharged preferentially, and the isolation valve and the throttle valve

of the parallel slide are provided in a place where the operation can be inspected near the seat. HRSG is

equipped with continuous blowdown and continuous blowdown tank.

Appropriate number of electrically operated valves are installed as blowdown valve, super heater,

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reheater drain valve, and they are automatically opened and closed during HRSG start, load, stop

operation.

xiii) Economizer Recirculation System

In order to protect the economizer from corrosion due to dew condensation of the carbonate-containing

exhaust gas, by providing the economizer recirculation pump, the inlet feed water temperature of the

economizer is kept higher than the temperature prescribed by HRSG manufacturer.

xiv) Reheating / Pressure

In the HRSG, there are the single-pressure type with steam pressure level and the multiple-pressure type

with two or more steam pressure levels. And there is additionally the reheating/ multiple-pressure type

with an additional reheater.

Although the multiple-pressure type has a more complicated system, and is more expensive than the

single-pressure type, the former can improve heat recovery from gas-turbine exhaust gas, and thus

improve plant efficiency.

In recent years, along with the increase in efficiency and capacity owing to enhancement of combustion

temperature of the gas turbine, the steam system has come to use higher temperature / pressure and a

reheating system, resulting in wider use of the reheating / triple pressure type, which has a more

increased plant efficiency.

xv) Others (Duct Burner)

As a result of field survey, there is no need to consider the duct burners. Therefore, the HRSG will not be

furnished with duct burners.

c) ST and ST Auxiliaries

ST equipment consists of turbine body and auxiliaries such as condenser, deaerator and pumps.

Figure 5-6 shows an image of a uniaxial ST (bird's-eye view). ST is a mixed pressure reheating type, and

the steam which worked in the ST high pressure section is heated by the reheater of HRSG, the steam again

flows into the ST medium pressure section and works in the turbine. Thereafter, steam is introduced from

the medium pressure part to the low pressure part, but at that time it is mixed with the HRSG low pressure

steam. Steam at the outlet of the low pressure turbine is cooled by heat exchange with river water in the

condenser thin tube installed in the lower part of the turbine or circulating water in the cooling tower and

returns to water and is reused as feed water for HRSG.

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The ST shall be of a manufacturer's standard proven design and structure in order to enable economical and

reliable service with minimal maintenance work. ST and auxiliaries shall be designed to operate

continuously under all specified operating conditions for the specified lifetime of the plant.

The maximum possible output of ST is planned with steam pressure, temperature and flow rate generated

from HRSG when operating under ambient conditions with GT operating at the maximum possible output.

ST is equipped with a condenser, a lubricating oil device, a control hydraulic device, a steam stop valve, a

regulating valve, a governor, a turbine bypass device, a control and monitoring device, etc. as an accessory

equipment, and the electrohydraulic control device is adopted.

The condenser may be surface type, single body, single flow type flowing in only one direction, or two flow

type flowing in two directions. As a material of the cooling pipe for performing heat exchange between the

cooling water and the turbine exhaust, titanium or stainless steel or the like is generally used since it is in a

corrosive environment.

There are various types of deaerators such as spray tray type and spray agitation type, but spray tray type is

representative for large plants.

Table 5-7 Specifications of ST Auxiliaries

Item Specification

Condenser Single-cylinder

Deaerator Spray tray formula

Condensate pump 100%×2


5-25

Figure 5-6 Bird's Eye View of Steam Turbine (Image)

(Source: MHPS HP)

Table 5-8 Condenser Specification

Item Specification

Type Surface type, single pressure, single body, 1 or 2 fold type

Pressure in the condenser 4.8 kPa

Coolant tube material Titanium, stainless steel

Condenser support method Concrete foundation

Related equipment Condenser thin tube cleaning equipment


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d) Generator and Generator Auxiliaries

I) Outline of Electrical Power System

The proposed multi-shaft type CCPP consists of three generators, two GT generators and one ST generator.

The electrical power generated by the generator is stepped up to 220 kV by the generator step-up transformer(GST) and transmitted to the adjacent Mintia substation.

The power supply to the auxiliary equipment connected to the station power bus is supplied from thesubstation via the unit auxiliary transformer (UAT) and the start-up auxiliary transformer (SAT) when powerplant is in start-up operation, and it is supplied from the substation via the SAT when generator is not operated.Besides, if the generator circuit breaker is installed, it is not necessary to install the SAT because it is possibleto supply power from the grid via GST and energizes UAT even while generator is not operated.

Electrical power is supplied from the bus connected to the emergency diesel generator to equipment (such asoil pump for bearing, sealing oil system, battery charger and emergency light) that cannot be stopped at thetime of blackout.

II) Codes and Standards for Design

Electrical equipment are basically designed based on the IEC standard established by the InternationalElectrotechnical Commission (IEC).

III) Generator

The structure of typical generator is shown in Figure 5-7.

Figure 5-7 Generator Structure Example


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A cooling system for generator stator is selected, depending on manufacturer’s circumstances and etc.There are three types of cooling systems for generators as shown in Figure 5-8.

Figure 5-8 Generator Stator Cooling System by Generator Capacity

(Source: Mitsubishi Electric Corporation, Turbine Generator General Catalog (January 2016) version)

For small to medium capacity generators, an air cooling system is generally adopted because of a simplestructure and good maintainability. For medium to large capacity generators, a hydrogen cooling system isadopted because those generators require higher cooling performance than air cooling system.

Hydrogen gas used for the hydrogen cooling system has the following characteristics.

i) Since the density is low, windage and friction loss are small and the efficiency of the generator can beimproved.

ii) Since the thermal conductivity is high, the cooling effect is high and the generator can be miniaturized.

iii) Since it is inactive, its impact on deterioration of the insulation is small and the lifetime of the insulationcan be long.

On the other hand, hydrogen gas may explode in the range of 4 to 75 (vol %) when mixed with air, so that thegenerator frame should be kept in a sealed structure not to make up explosive gas mixture. For this reason,accessories such as sealing oil devices and gas concentration control system are required and maintenancebecomes complicated. The feature comparison of these cooling systems is summarized in Table 5-9.

In the 300 MW class CCPP to be studied this time, it is preferable to adopt the air cooling system from thecapacity etc. It will be selected in accordance with the GT model.

Table 5-9 Feature Comparison of Generator Stator Cooling Systems

Item Air Cooling Hydrogen Cooling Water Cooling

Cooling Performance Low Medium High

Number of Accessories Small Large Large

Efficiency ~98.8 % ~99.0 % ~99.0 %

Maintenance Work Easy Complicated Complicated

(Source: Mitsubishi Electric Corporation Turbine Generator General Catalog (January 2016) version)

IV) Generator Accessoriesi) Generator Cooling System

The necessary accessories are different depending on the cooling system of the generator, andrepresentative devices are described here. In the case of adopting the air cooling system, the following

900 1000 1100 1200300 400 500 600 700 800200

Air Cooling

Hydrogen Cooling

Water Cooling

0 100Generator Capacity MVA

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accessories are unnecessary.

Sealing oil system

The sealing oil system is installed to seal the hydrogen which cools the stator and the rotor in thegenerator. This system creates an oil film (sealed portion) using a seal ring in the gap between therotating part and the stationary part, and prevents hydrogen gas in the generator from leaking out ofthe generator along the rotor axis.

There are two types of sealing oil treatment system: single flow type (vacuum treatment type) anddouble flow type. The single flow type is a method in which the sealing oil is made clean oilcontaining no impure gas such as air by vacuum treatment and is sent to the seal part. On the otherhand, the double flow type is a method of separating the oil line that absorbed air in the sealed portionand the oil line that absorbed / dissolved hydrogen gas, and preventing escape of hydrogen gasabsorbed in oil to the outside.

At present, a single flow type (vacuum treatment type) is mainly adopted.

Hydrogen gas supplying system

In order to prevent hydrogen gas from mixing with air, the hydrogen gas supplying system is installedto fill the generator with hydrogen, replenish hydrogen gas and control the pressure during normaloperation, and discharge hydrogen gas and replace with air in the case of emergency. In general, thehydrogen gas supplying system is configured in combination with the carbon dioxide gas supplyingsystem and the nitrogen gas supplying system which are necessary for gas replacement.

Stator water cooling system

The stator water cooling system is installed to supply highly pure water to the stator coil of the water-cooled generator. This system sends water with increased purity in the ion exchange resin device tothe water storage tank, pressurizes the cooling water from the water storage tank with a pump, andsends cooling water into the conductor of the stator coil via a cooler and a filter.

ii) Generator Excitation System

Excitation System

Typical generator excitation systems adopted in thermal power plants are the AC excitation system(brushless excitation system) and the static excitation system (thyristor excitation system), which areclassified according to the difference in the power supply devices. The configuration and features ofthese excitation systems are shown in Table 5-10. It will be usually selected by the manufacturer inaccordance with the GT model.

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Table 5-10 Comparison of Generator Excitation Systems

Item AC Excitation System(Blushless Excitation System)

Static Excitation System(Thyristor Excitation System)

Configuration

Accessories(1) AC Exciter(Including Rotary Rectifier)(2) permanent magnet generator

(1) Excitation Transformer(2) Rectifier Board(3) Slip Ring

Feature

- The output of the AC exciter is converted toDC by a semiconductor rectifier on the samerotation axis to supply the field current.

- The field current is controlled by changingthe voltage of the AC exciter.

- Since the rectifier and the AC exciter arerotated together, a slip ring is unnecessary.

- The thyristor excitation system is composedof stationary devices and directly supplies thefield current to the generator by the thyristor.

- The field voltage is adjusted by controllingthe firing angle of the thyristor. Since there isno time delay due to the field winding of theexciter, the response speed of the excitationsystem is extremely fast. Therefore, it issuitable for peak loading.

- Although the excitation power is supplied viathe excitation transformer, a power source forinitial excitation is required.

MaintenanceWork

- Since there is no slip ring, care of the slip ringsurface, inspection of the brush folder,replacement of the brush is unnecessary.

- Diodes and fuses of rotating rectifiers need tobe replaced according to operation time.

- Care of the slip ring surface, inspection of thebrush folder, replacement of the brush isnecessary.


Automatic Voltage Regulator (AVR)

AVR is installed to maintain the generator voltage at a specified value regardless of grid voltagefluctuation, load fluctuation, accident or disturbance. The main purpose of the AVR is to stabilize thegrid voltage, improve the stability of the generator, protect the generator (overvoltage / overcurrentprotection), and adjust reactive power. The AVR includes the following functions.

• Voltage regulator (90R)• Field current regulator (70E)• Over Excitation Limiter (OEL)• Under Excitation Limiter (UEL)• Power System Stabilizer (PSS)• Other necessary functions

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V) Generator Main Circuit Equipmenti) Isolated Phase Busduct (IPB)

The isolated phase busduct is adopted for the circuit with extremely large flowing current and short-circuitcurrent between the generator and the GST / UAT in order to have the function of flowing large currentfrom the generator to the GST and UAT. In addition, the IPB is enclosed in a grounded metal enclosurewhich completely separates the conductors of the respective phases, which is a highly reliable bus withoutthe risk of short-circuit between phases.

In large capacity generators, air-cooled type by cooling fans is adopted for the IPB, but natural-coolingtype is adopted in the multi-shaft type CCPP proposed this time.

ii) Generator Neutral Grounding Equipment

The generator neutral grounding equipment is installed to prevent abnormal voltage generation when anground fault occurs in the generator main circuit including the generator, and to reliably detect failures inthe protective relay by applying an appropriate current to the failure point and to eliminate the failurepromptly. The generator neutral grounding methods include the transformer grounding method in whicha grounding transformer is installed at the neutral point and a resistor is connected to the secondary side,and the resistance grounding method in which a resistor is directly connected to ground. In order toprevent the ground current from unnecessarily increasing and to prevent the abnormal voltage at the timeof a ground fault failure from becoming excessive, the basic specifications of the grounding equipmentare determined in consideration of flowing a resistance component current corresponding to the chargingcurrent due to the ground capacitance of the device connected to the main circuit.

VI) Transformer

In general, the transformer is installed for transmission of the generated power, supply of station power, and power supply when stopped. Transformer specifications are indoor / outdoor type, air-forced cooling type /air-natural cooling type, 3 winding type / 2 winding type and so on. The transformer is classified as shownin Table 5-11 according to the cooling medium which directly cools coil and core of the transformer and thecirculation method of the surrounding cooling medium which cools them. It will be selected by in accordancewith the capacity and ambient conditions of the transformer, etc.

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Table 5-11 Transformer Cooling System

ModelOil-natural Air-natural

ONAN

Oil-natural Air-forced

ONAF

Oil-directed Air-forced

ODAF

Schematic

Capacity 100 MVA 130 MVA 1,000 MVA

Cooling effect low base High

Auxiliary

machine

few baseair-cooling fan

muchair-cooling fan, circulation pump

Maintainability easy base Difficult

Noise low loud loud


Oil-natural Air-natural type (ONAN) is widely adopted because there are few auxiliary equipment andmaintenance is easy. The transformer is cooled by the flowing circulation of the oil. In the Oil-natural Air-forced type (ONAF), air cooling fans are attached to radiators to improve the heat dissipation effect. It isexpected that the cooling efficiency can be improved by about 20% to 30% compared to oil-natural Air-natural type. For large capacity transformers, Oil-directed Air-forced type (ODAF) is adopted. It forciblycirculates the oil by the pump to increase the cooling efficiency.

VII) Cable

The connections to the dead-end transmission towers, which are the point of interconnection between thegenerator step-up transformer and the electricity transmission company, need to consider interference withthe existing power plant equipment. The study team are planning to use cables from the generator step-uptransformer to the vicinity of the dead-end transmission tower and connect to the dead-end transmission towerby rising the overhead conductors through the cable head.

There are two types of cables, CV cable and OF cable. The CV cable is lightweight and has good workability,and the OF cable uses insulating oil to prevent entry of moisture. (Table 5-14).

5-32

Table 5-12 Power Cable ComparisonCV cable OF cable

Configuration

Description The insulating material adopts cross-linkedpolyethylene which is excellent in electricalcharacteristics (dielectric strength / dielectricloss tangent). This cable is co-extruded in threelayers of an inner semiconductive layer, aninsulator and an outer semiconductive layer,and is provided with a flame retardant vinylsheath to protect the insulator from wound,moisture and harmful substances.

The conductor is wound with insulating paperand insulating oil is filled inside of the cable.The insulating oil is supplied from the externaloil tank into the cable. The interior of the cableis always filled with insulating oil aboveatmospheric pressure.

Cha

ract

eris

tic

Advantage - It is lighter in weight than the OF cable andit has good workability

- Equipment can be simple (lubrication systemetc. is unnecessary)

- It is electrically stable. (no void due totemperature change and no moisturepenetration.)

Disadvantage - Degradation of the insulator may occur dueto the tree phenomenon.( )

- Equipment to supply insulating oil etc. isrequired.

- Bending characteristics are bad, cable weightis heavy.

tree phenomenon: If the solid insulator is relatively thick, the electric field concentrates at the tip of the voidor impurity in the insulator. Discharge or local destruction occurs in this part. As a result,pit-like degradation is caused. Tree phenomenon is a phenomenon that the pit-likedegradation develop as a dendritic (tree) destruction path.


Currently, the CV cable is also commonly used even in the 220kV class, but the study team will consider ittaking comprehensive consideration such as reliability, operability, economy and so on.

VIII) Electrical Power Supply and Distribution System

The electrical power generated by the generator is stepped up to 220 kV by the GST, and transmitted to thegird via the substation. However, a part of the electrical power generated by the generator branches at thegenerator main circuit, is stepped down by the UAT, and is supplied to each auxiliary equipment of the powerplant.

The power supply to the unit auxiliary equipment is supplied as follows.

i) The medium voltage auxiliary power supply is supplied from a medium voltage enclosed switchboard(metal clad switchgear) connected to the UAT low voltage side. The low voltage auxiliary power supplyis supplied from a low voltage enclosed switchboard (power center switchgear / control center)connected to the unit substation transformer low voltage side. Besides, it will be selected consideringcapacity and usage conditions whether to apply the power center or the control center.

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ii) The control power supply and the lighting power supply are supplied from the distribution board whichis stepped down from the control center.

iii) The uninterruptible power supply (UPS) is installed for a computer that requires a stabilized powersupply with less fluctuation in voltage and frequency, without worry of power failure.

iv) The emergency diesel generator (EDG) is installed in order to safely stop the power plant even at thetime of blackout due to the power plant internal accident or grid accident, and to continue plant conditionmonitoring.

v) The DC power supply system is installed as an emergency power supply until the EDG starts up, and DC(direct current) power is supplied to the DC auxiliary equipment and the UPS.The plant control device is supplied with power from both the AC power supply and the DC powersupply.

vi) The EDG is installed in order to stop the power plant safely at the time of unit auxiliary power loss.However, the EDG for black start is installed separately from the EDG for safety stop of the power plantbecause it is necessary to start-up the power plant without receiving power supply from the grid whenthe grid goes into blackout.

An example of a single line diagram is shown in Figure 5-9.

Figure 5-9 Example of H-100 Single Line Diagram


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IX) Protection of Generators and Transformers

Protection devices are installed for protection of generators and transformers and for prevention disaster.Generally, duplicated digital protection devices are installed, and power supply to these protection devices isduplicated.

Table 5-13 show the basic configuration of protection relays.

Table 5-13 Generator Protection Relay

Item Element

Generator differential protection G87

Generator over voltage protection against ground fault G64

Generator negative sequence over current protection G46

Generator excitation fault protection (loss of field) G40

Generator over voltage protection G59

Generator field over excitation protection G53

Generator over current protection G51

Exciter ground fault protection E64

Generator directional over current relay G67

Generator voltage balance relay G60


Table 5-14 Generator Step-up Transformer Protection Relay

Item Element

Generator step-up transformer differential protection M87

Generator step-up transformer over voltage protection against ground fault M64

Generator step-up transformer over current protection against ground fault M51N


Table 5-15 Unit Auxiliary Transformer Protection Relay

Item Element

Unit auxiliary transformer differential protection H87

Unit auxiliary over current protection H51

Unit auxiliary transformer over current protection against ground fault H51N


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X) Closed Circuit Television (CCTV) System

CCTV system shall have the functions of automatic patrol, manual operation, zooming, record. CCTV systemshall be installed to strengthen security within the power plant premises.

e) Control System of the Power Plant

I) Basic Design of the System

DCS (Distributed Control System) is used for Control System of the Power Plant.

The DCS is a system that realizes control of the entire plant by distributing some of controllers and integratingthem, and is composed of man-machine interface units, control units, input / output units, network units,power supply units, detection units, driving units and etc.

II) Automation of the Power Plant

The purpose of plant automation is to save and rationalize the normal operation and start-up and shut downoperation, to ensure safety, reliability and flexibility of operation, to operate with high efficiency. In order torealize these goals, the automation system is designed so that operators can conduct the start-up and shutdown operation, normal operation and special operation in the central control room.

In order to prevent from a failure affecting the entire plant, the automation system is hierarchizing anddecentralizing. Specifically, the system is hierarchized into block control that controls and monitors the entireplant and unit control and drive control. An example of the functional hierarchy of the automation system isshown in Figure 5-16.

At the unit control and drive control, in order to prevent from some faults affecting to the entire unit, controldevices are distributed and independent. Each control function is distributed to gas turbine control, heatrecovery steam generator control, steam turbine control and etc. Moreover, owing to the distribution of thecontrol device, the maintenance of the device can be performed without affecting the operation of the unit asmuch as possible.

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Figure 5-10 Example of the Functional Hierarchy of the Automation System


• Block Control

This hierarchy is the highest hierarchy in the functional hierarchy, and it is possible to start-up and shutdown the plant automatically, maintain the cooperation of the gas turbine, heat recovery steam generatorand steam turbine during normal operation and control the load.

• Unit Controls

In this hierarchy, it is possible to control the main unit of the block (such as gas turbine, heat recoverysteam generator, steam turbine) to a preset state.

• Group Controls

In this hierarchy, the related sub-group controls and drive control level are integrated and controlled byspecific processing such as supplying water to the boiler by driving the feedwater pump.

• Sub-group Controls

In this hierarchy, single drive controls can be combined with a series of controls by automatic sequenceexecution or specific processing. The operator can start and stop all devices associated with the sub-groupcontrols through sub-group controls or group controls.

• Drive Control Level

In this hierarchy, control of individual devices is possible. Individual devices can be controlled either bya higher level sub-group control or manual operation by the operator. In consideration of safety, manual

M XM XX

MCC

Process

Drive Control LevelSingle drive ControlsClose Loop Controls

Sub-group Controls

Group Controls

Unit ControlsGT1/HRSG1 GT2 /HRSG1 Steam Turbine

Block ControlBlock Coordinator

Protections

Functional Hierarchy

Operator access

M XM XX

MCC

Process

Drive Control LevelSingle drive ControlsClose Loop Controls

Sub-group Controls

Group Controls

Unit ControlsGT1/HRSG1 GT2 /HRSG1 Steam Turbine

Block ControlBlock Coordinator

Protections

Functional Hierarchy

Operator access

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operation at the drive control level is prioritized and control by other automation hierarchies cannot beperformed.

f) Fuel Gas Supply System

I) Positional Relation with Terminal Point

An existing gas pipeline is laid in the northeast of the Deva CFPP as shown in Figure 5-11. Gas is already

used in existing CFPP. It is possible to supply fuel gas to each candidate location of CCPP to be newly

constructed, by branching from the existing terminal point of gas and installing new gas pipeline to CCPP

to be newly constructed.

Figure 5-11 Positional Relation with Terminal Point of Gas and Candidate Locations of CCPP


II) Characteristics of Fuel Gas at the Terminal Point

Tables 5-16 and 5-17 show the confirmed gas composition, pressure and calorific value.

As mentioned in Chapter 5 (1) 1) b), 10.5 bar of the fuel supply pressure is low against the required fuel

gas pressure of GT, so it is necessary to newly install fuel gas compressor. (The required fuel gas pressure

of GT varies depending on the model of GT, but it is approximately 40 bar at the maximum case)

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Table 5-16 Gas Composition at the Terminal Point

Component Unit Percentage

Metan vol. % 98.9594

Etan vol. % 0.3788

Propan vol. % 0.1052

iso-Butan vol. % 0.0173

n-Butan vol. % 0.0146

iso-Pentan vol. % 0.0041

n-Pentan vol. % 0.0024

Azor vol. % 0.4031

Carbon dioxide vol. % 0.1143

Total vol. % 100.00


Table 5-17 Characteristics of Fuel Gas at the Terminal Point

Item Unit Value

Pressure bar 10.5

LHV kJ/kg 49,509


g) Common Equipment

I) Air Compressor System

Compressed air can be divided into control air and general service air depending on the application. The

control air is supplied as a drive source for various pneumatically operated pneumatic controllers, piston

valves, regulating valves etc. In order to ensure the reliability of operation of these devices, compressor for

control air is oil free and plans to comply with standards such as ISO. The general service air is used for

each equipment seal air, work etc. The conceptual system diagram is shown Figure 5-12.

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Figure 5-12 The Conceptual System Diagram


II) Fire Fighting System

In order to protect employees and equipment in the plant from fire, fire protection shall be considered, such

as securing separation distance between equipment, adopting fire-retardant or fireproof equipment, selecting

appropriate firefighting system. Unless otherwise specified in Romania laws, NFPA 850 shall be applied as

the standard for fire protection for the plant.

Fire area boundaries should be based in consideration of the following.

Types, quantity, density, and locations of combustible material

Location and configuration of plant equipment

Consequence of losing plant equipment

Location of fire detection and suppression system

Fire barriers for separating fire areas should be of a minimum 2 hour resistance rating.

Water supply for the permanent fire protection installation should be able to provide water for 2 hours, and

CompressorControl

Air dryer

Control valve,Piston valve

Control air load

pneumaticcontrollers

Dust filter

Generalservice

Generalservice air

General service air load

Seal air foreach facility

Compressorfor general

Compressorfor general

Conceptual system diagram: Control air system

Conceptual system diagram: General service air system

5-40

the hose stream demand should not be less than 1890 L/min. In case multiple fire pumps are required, the

pumps should not be subject to common failure, and should be of sufficient capacity excluding the capacity

of the largest pump.

The general combination of equipment and firefighting system is shown in Table 5-18.

Table 5-18 General Combination of Equipment and Fire Fighting System

Item Equipment Firefighting System

1 Bearing for GT, ST and Generator Carbon Dioxide Extinguisher

2 GT and ST Oil Tank Carbon Dioxide Extinguisher

3 Generator Exciter room Carbon Dioxide Extinguisher

4 Step up Transformer Water Spray System

5 Office Building Hydrant and Portable Extinguisher

6 Workshop and Storage Hydrant and Portable Extinguisher

7 Cable Room Carbon Dioxide Extinguisher or Water Splay System

8 Yard Area Hydrant


As the candidate sites are all around the existing CFPP equipment, with regard to the water fire extinguishing

equipment, by conducting extension of the fire water piping as necessary, it is assumed that fire water pumps,

fire extinguishing water storage tanks etc. can be reused. However, since the candidate site has not been

confirmed, it is recommend that detailed examination based on the laws of Romania, NFPA etc is conducted

during detailed designing stage.

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(2) Alternative PlanAs an alternative plan of CCPP, the study team considered gas engines using natural gas as fuel, which can be

expected to provide stable supply in the future from the viewpoint of fuel supply, and conduct studies.

1) Characteristics of Gas Engine

The gas engine is a reciprocating engine that uses natural gas as fuel, converts the energy obtained by

combustion into rotational motion, and rotates the generator to generate electricity. The main appearance is

shown in Figure 5-13, and the explanatory diagram of reciprocation is shown in Figure 5-14.

Compared to gas turbine simple cycle power generation, gas engine power generation has a high efficiency

characteristic, but thermal efficiency is lower when compared with CCPP.

Figure 5-13 Appearance of Typical Gas Engine

(Source: Wärtsilä HP https://www.wartsila.com/products/marine-oil-gas/engines-generating-sets)

https://www.wartsila.com/products/marine-oil-gas/engines-generating-sets)

5-42

Figure 5-14 Reciprocating Motion of Gas Engine

(Source: Cogeneration Foundation HP https://www.ace.or.jp/web/chp/chp_0025.html )

2) Comparison of Gas Engine Power Plant (GEPP) and CCPP

Table 5-19 below shows the comparison result of typical GEPP and CCPP specifications.

Table 5-19 Comparison of Typical GEPP and CCPP Specifications

Item GEPP CCPP

Basic specification of

power generation

equipment

Configuration 19 units 2on1 × 1 block

Net Power Output 341,550 kW 338,354kW

Net Thermal

Efficiency

45.63 % 56.03 %

EPC Cost 224,000,000 EUR 232,000,000 EUR

Propriety of District heat supply Possible Possible

Operability

(Ancillary)

Start-up time 10 min 50 min

Frequency

adjustment

100 %/min 8.3 %/min(GT)

Ramp rate 100 %/min

Minimum load 20 % 28 %

Environmental Aspect NOx emission rate 50 mg/Nm3 30 mg/Nm3

Construction Period 32 months 36 months

Required site area Approx. 2.6 ha Approx. 1.3 ha


https://www.ace.or.jp/web/chp/chp_0025.html

5-43

Table 5-20 Comparison of Typical GEPP and CCPP Arrangements (reference)

GEPP: Approx. 2.6 ha CCPP: Approx. 1.3 ha


a) Basic Specification of Power Plant Equipment

When comparing with the power plant equipment of same power output class, CCPP has higher thermal

efficiency than gas engine and has merit at running cost.

b) Construction cost

When comparing with the power plant equipment of same power output class, the construction cost is

comparable. On the other hand, GEPP : CCPP = 625: 639 euro / kW when compared with the construction

cost per output, the gas engine is cheaper than the CCPP, and the initial cost of only the construction cost

has merit.

c) District Heat Supply

District heat supply can be supplied by both GEPP and CCPP, but in the case of GEPP, installing HRSG

only for district heat supply is economically small merit, so separately, installing a hot water boiler is

considered preferable.

The district heat supply to be considered in this project is a very small amount of heat relative to the power

plant capacity, and the influence on the performance of CCPP is negligible. For this reason, efficiency

improvement by district heat supply is considered equivalent in CCPP and GEPP.

d) Ancillary

Regarding start-up time, frequency adjustment, and rump rate, although GEPP is superior to CCPP in

general, CCPP is generally superior to CFPP. Therefore, by repowering from the existing CFPP, the

ancillary performance is improved.

5-44

e) Environmental Aspect

Comparing the NOx values, the NOx value per exhaust gas flow rate is lower in the CCPP than in the

GEPP, and there is a merit in the CCPP from the viewpoint of reducing the environmental load.

f) Required Site Area

When comparing with the power plant equipment of same power output class, as also shown in Table5-20 the site area of CCPP is about half of that of GEPP, and CCPP is not subject to site restrictions.

In fact CCPP can be placed in Case 3, which is the replacement candidate site that was rated as having

the greatest economic merit in Chapter 4, but the GEPP can be placed only in Case 2. As a result of this,

the difference in the initial cost where the GEPP dominated by construction costs will be small.

Based on the above, the study team think that repowering to the CCPP will be desirable for the Deva CFPP.

Chapter 6 Project Implementation and

O&M Organization

6-1

(1) O&M Organization1) Recommended O&M Organization of CCPP

Since this project is the repowering of existing power plant equipment, it is necessary to construct O&M

organization in cooperation with existing CFPP organization. It is assumed that the operation of the power plant

will be done by the personnel of the Deva CFPP (hereinafter referred to as the Deva personnel) This CFPP has

already operated for over many years, and also from the field results of the study team, we think that Deva

personnel possess the O&M skills related to ST and BOP. However, since the project implementation body has

not yet been decided at this time, we will consider the maintenance organization that is generally required for

CCPP operation without considering the current organization.

a) Matters to consider in building the O&M Organization of CCPP

In CCPP operation, the most important factors are stable power supply and reduction of LCC. In addition,

it is important to adequately manage the factors shown in Figure 6-1.

For these factors, it is important to build an optimal CCPP O&M organization from the planning and

construction stages and make smooth transition to operation. In establishing the optimum CCPP O&M

organization, it is important to secure personnel necessary for CCPP stable operation and establish effective

GT maintenance method. As a result, it is possible to maintain stable supply of high-quality power

infrastructure and reduce LCC.

In particular, response to initial troubles and maintenance of hot parts for a long time are factors that greatly

influence the plant operations, and it is essential to consider the construction of the organization.

Figure 6-1 An important factor in CCPP operation


b) Study of Organization based on CCPP O&M in Other Countries

We studied the structure of the organization (operating personnel and maintenance personnel) necessary for

CCPP operation. When studying the system, we studied the system considering the difference of GT

maintenance method (LTSA, Long Term Parts Management (LTPM) adoption / non-adoption) based on other

CCPP results. Table 6-1 shows the operation and maintenance organization in overseas CCPP investigated by

the study team.

Reduction of fuel cost by high efficiency operation

Prevention of unplanned outage due to unexpected

trouble

(Especially prevention of long-term plant outage such as

hot parts trouble)

Improve availability by prompt recovery

Management and shortening of inspection period

Stable supply

Reduction ofLCC

Improvementof availability

6-2

Table 6-1 CCPP O&M Organization of Other Projects


I) Case1 LTSA adoption

By adopting LTSA, GT manufacturers will securely maintain the most heated components, which is

deemed the most important scope of LTSA. GT manufacturers will procure and repair components and

will periodically inspect the most important heated components of GT. With secure management of GT

components, trouble would minimize and unexpected troubles can be treated at early stage. Therefore,

CCPP operation would be possible with minimum operator. Furthermore, maintenance cost can be leveled,

and reduction of LCC and optimum plant management are possible.

II) Case2 LTPM adoption

By adopting LTPM, stable supply and repair of heated components are carried out by GT manufacturers,

and it is possible to prevent outage of long-term operation. Therefore, CCPP operation can be handled

with minimum necessary operator. However, planning and management of troubleshooting at the early

stage of operation, and repairing of components at regular frequency are necessary, thus extra O&M

personnel is necessary for this purpose. Also, management of maintenance costs accompanying initial

troubles, and replacement of heated components becomes complicated.

6-3

c) Recommended O&M Organization

Although the project implementation body is undecided at present, it is highly likely that the personnel of

the Deva CFPP will be in charge of the O&M. For the staff of the Deva CFPP, it will be the first time to

operate CCPP. Based on this point and the features of each operation and maintenance organization shown in

the section b), Case 1, which enables reliable management of GT components and troubleshooting even if the

organization includes personnel with little GT knowledge, is recommended.

Based on Case 1, taking into consideration the fact that it is the first CCPP operation for the personnel of the

Deva CFPP, we will aim to plan staff training by making the correction shown in table 6-2.

Table 6-2 Correction Considering the first CCPP Operation

Department Correction contents

Operation The minimum necessary personnel is 2 people / group.However, at initial stage, we recommend 4 people / group to increase the number

of educated personnel of plant management and driving training.

Maintenance 3 people are recommended for the purpose of managing and repairing. By

making full use of LTSA to secure important GT components, additional trainee

will be responsible for replacement plan, periodic inspection work management,

unexpected troubleshooting.


Considering the above, table 6-3 shows the recommended O&M organization in the Deva CFPP which

operates CCPP for the first time.

Considering that operators have no experience in CCPP O&M, and to secure important factors in CCPP

operation, namely stable supply and LCC reduction, we recommend to adopt LTSA until the first major

inspection. We also recommend to keep the stable operation of CCPP after you ensure that you took all possible

measures to maintain GT (such as heated components management).

By adopting LTSA, initial trouble can be minimized and CCPP can be operated. Regarding maintenance

personnel, through utilization of LTSA, it is possible to acquire maintenance skills of GT manufacturers, and

it is profitable from the viewpoint of systematic personnel training. From the above, we recommend that LTSA

be adopted for CCPP operation and GT maintenance, and we recommend establishing a system for CCPP

operation within the organization of Deva CFPP. In addition, since the maintenance organization (including

the maintenance and management method) affects LCC, it is indispensable to consider the maintenance

organization at an early stage (plant planning, construction stage).

6-4

Table 6-3 Recommended CCPP O&M Organization Required for CCPP Operations


(2) Recommended O&M System1) Operation of an Ideal Thermal Power Plant

In order to contribute to the sustainable development of thermal power plants, it is important for thermal power

plants to maintain and enhance "the quality of power infrastructure" throughout their lifecycle.

The quality of power infrastructure is said to be 3E + S (stable supply, improvement of economic efficiency,

environmental conservation · harmony + safety). In addition, the stable power supply includes elements of initial

performance, availability and restoration capability.

In order to maintain and enhance the quality of this power infrastructure, the following capabilities are needed.

I) Construction of management system

Construction of Quality management system Quality Management System : QMS

Construction of key performance indicators Key Performance Indicator : KPI

II) Securing human resources

Operating capacity of operation and maintenance system

Technical capabilities of operation and maintenance

It is important to build these capabilities from the planning and construction stage of the thermal power plant.

6-5

And then, through appropriate quality control and construction of operation and maintenance system, ideal

thermal power plant operation can be realized, which will ensure supply capacity and reduce LCC.

2) Current Status of Deva CFPP

Over the years of operation, existing personnel’s O&M skills of CFPP is by no means inferior to that of Japan.

In addition, existing Deva personnel is well skilled in maintenance and technical aspects of ST and BOP.

Know-how to operate and manage the power plant is also established.

However, since CFPP will be repowered to CCPP, the existing Deva personnel faces new and inexperienced

challenge to operate CCPP. Since CCPP has never been introduced to Deva power plant, personnel’s skills

related to CCPP operation and GT maintenance is insufficient.

Due to differences in equipment, there are differences in efficient operation, plant monitoring, and operation

data management, which greatly affects device trouble signs, troubleshooting measures and fuel costs.

In GT maintenance, operation of heated components is important. The lifetime of heated components is

determined, and therefore regular replacement is necessary. In addition, confirming the soundness of the

components and repairing them requires long period of time.

Therefore, for the purpose of shortening the periodic inspection process, at the time of periodic inspection,

operation of replacing the disassembled hot parts with spare and restoring the hot parts is attempted.

In maintaining GT, it is important to maintain hot parts in a proper manner. To put it concretely, timing of

both repair completion and periodic inspection, and the remaining service life etc. of the hot parts needs to be

well managed, otherwise failure in maintenance will bring about major impact on plant operations.

It is necessary to improve CCPP operation and maintenance skills as mentioned above at an early stage and

to construct an optimum operation and maintenance system at the initial CCPP operation stage. In addition, it

is necessary to establish a KPI to manage fuel cost, availability factor and repair cost (heated components)

which most affects operation of the inexperienced CCPP. Establishing targets and understanding on how to

improve the current performance is necessary.

3) Construction of Recommended O&M System

Considering the current state of the Deva CFPP and the first CCPP adoption, we recommend the following

system construction in order to realize stable and efficient operation over a long period.

I) Construction of QMS and KPI

Construction of Quality management system

Establishment of CCPP performance indicators, performance management and improvement process

establishment

II) Construction of CCPP Operation and GT Maintenance Technology

(CCPP operation)

Learn about plant trends and trouble correspondence for load operation from CCPP start

/ stop operation

Initial trouble avoidance, abnormality detection for early response, factor analysis

(Utilization of remote monitoring system, etc.)

(GT maintenance)

6-6

Establishment of maintenance standards

Establishment of GT maintenance plan and establishment of spare parts management

Maintain effective CCPP utilizing LTSA

(3) Support for building O&M SystemsTechnical acquisition through construction and trial operation is also effective for building the O&M system

described in the previous 3). However, even after the power plant starts its commercial operation, it is not enough

for personnel to continuously acquire skills.

In addition to LTSA and remote monitoring support by GT manufacturers, it is good to seek capacity building

support by power generation company who has rich experience in long-term O&M of CCPP. It is effective to

establish CCPP operation and maintenance system at an early stage and establish technological base.

Based on the above, the items that Japanese power generation companies can support in establishing the system

described in the previous 3) are as below.

1) GT Training

As a way to master the operation and maintenance skills of CCPP, a guidance program using user manuals

provided by GT manufacturers during construction is helpful.

Based on the user manuals’ information, improving personnel’s technological skills through On-the-Job

Training (OJT) is productive, but not enough for continuous skill development. To supplement On-the-Job

Training, seeking training support provided by power generation company with rich experience and know-

how of CCPP is helpful. By effectively taking advantage of this training support, we recommend to secure

stable supply of CCPP operation by quick capacity building and continuous technical skill improvement.

2) LTSA Support by GT manufacturer and Construction of CCPP Remote Monitoring System

Since introducing GT equipment is for the first time at Deva CFPP, it is important to suppress troubles at the

time of introducing the initial equipment and ensure that long-term and efficient stable operation of CCPP is

available. In order to realize these, it is important to implement plant management, operation data

management, trouble detection correspondence, and appropriate maintenance (maintaining and maintenance

of components that take time to recover when GT heated components troubles).

Supporting program’s contents for efficient and long- period stable operation include the following.

GT manufacturer’s support through LTSA

Support for installation of remote monitoring system

3) Support for Quality Control of Power Plant and KPI System Establishment

Unlike CFPP, CCPP has a characteristic that maintaining cost of GT heated components occupy big portion

of total maintenance cost. Therefore, CCPP’s asset management standards are different from that of CFPP.

The influence of fuel cost against maintenance cost is also big, therefore management of highly efficient

operation is also important.

6-7

In order to maintain ongoing business performance, sustainable management skills are necessary. By

establishing the structure of quality control and visualizing KPI all personnel will be able to grasp the

performance and effort to achieve the same goal.

Such an asset management system has been introduced in another CCPP in Romania and is a very important

mechanism from the viewpoint of CCPP operation. As the Japanese power generation company, it has built

an asset management system based on many years of CCPP operation, and our system will support quality

management and introduction of KPI.

(4) Possibility of Japanese Companies to participate in O&MAs mentioned in the previous section (2) 2), the staff of the Deva CFPP already has sufficient maintenance

and technological skills of ST and BOP, therefore further support is unnecessary.

Meanwhile, since the personnel of the Deva CFPP will operate and maintain GT for the first time, the support

mentioned in the previous section (3) can be highly considered.

Japanese GT manufacturers that provide main machines, and Japanese power generation companies with rich

long-term CCPP operation experience can support activities mentioned in the previous section (3).

Chapter 7 Project Plan

7-1

(1) Project Implementation Program1) Contract with EPC Contractor

This project is a CCPP construction project that will be constructed inside the Deva CFPP, which the existing

equipment will be reused to the CCPP. Because the construction of the CFPP and the reuse takes place at the same

time, coordination adjustment will be complicated. Therefore, we recommend a full-turnkey EPC contract.

In contract, one year is to be expected as a necessary period for the contract with EPC Contractor taking into

consideration the specification of the contractor's offer etc.

2) Construction Phase

Before the contractor(s) begin constructing CCPP, the following preparation works needs to be completed.

Purchasing of land owned by another owner

Leveling of the above land

Preparation of access road necessary for construction work

The construction period is expected to be 36 months considering the environment, transportation, reuse of existing

equipment, and the CCPP construction record in Romania.

Since the exhaust gas bypass system is not adopted to this project, there is no early commercial operation by power

plant’s partially generating electricity by GT.

(2) Project ScheduleThe proposed project schedule is shown in Table 7-1. The prerequisite of this schedule is that the project

implementing entity has been decided in advance. Therefore, the construction commencement may be delayed if

the selection of project implementing entity takes time. The environmental impact assessment (EIA) will delay

accordingly, since EIA will be given by the implementing entity.

1) Feasibility Study

Through this project feasibility study, we conducted information investigation which is necessary for optimizing

plant performance, economic evaluation and EIA.

2) Romanian Domestic Approval

Approval by Romanian Government is necessary to promote this project. The Romanian Department of Energy's

dominant body will give approval. If the Department takes time in selecting the implementing company, there is a

possibility of delay in the project schedule.

7-2

3) EIA

As for the financial arrangement, this project is considering to request Japan Bank for International Cooperation

(JBIC) buyer's credit. JBIC established environmental and social consideration guidelines to apply to the loan

requests. It is necessary to make an impact assessment in compliance with JBIC’s guidelines and Romanian

national law. The implementation period is assumed to be at least 1 year. The EIA shall be given by the project

implementation body.

It is also important from the viewpoint of profitability to implement EIA in an urgent manner.

In addition, since the Romanian authorities concerned are also hoping for early implementation, EIA is planned to

be implemented in parallel with Romanian domestic approval.

4) Contract

After concluding the loan agreement, EPC contractor will be selected through international competitive bidding.

5) From EPC Commencement to Commercial Operation

The construction period of CCPP usually depends on the delivery of HRSG. Based on recent records, it is

assumed that the CCPP construction will take 3 years.

Chapter 8 Economic and Financial Analysis

8-1

(1) Project Cost Estimation1) Construction Cost

Construction cost is estimated by using GTPRO, Gas Turbine world magazine and the construction experiences of

the study team. The estimation result for the CCPP to be newly constructed is shown in Table 8-1. GTPRO is a

software for simulating performance and heat balance based on the latest database of the equipment used worldwide,

and also has a function to estimate the construction cost. It has been continuously updated, since it was released in

1988. Gas Turbine world is a specialized magazine that provides up-to-date information of international equipment

performance and price trends. It is used for reference in gas turbine power plant development, planning, evaluation,

procurement, construction, operation and maintenance. It has been continuously updated, since it was published in

1970.

In this study, the construction cost is estimated based on Case3 as mentioned in chapter 4(1)1), where the candidate

land for CCPP to be newly constructed is adjacent to Unit 6 of the existing power plant. This project can reduce the

construction cost by reusing the equipment of the Deva CFPP, as mentioned in chapter 3(1)8)c). In this estimation,

this cost is -31,900,000 EUR. The cost is shown in Table 8-1, which is estimated based on reusing some equipment

of Deva CFPP.

Table 8-1 Estimation of the CCPP to be newly constructed

CCPP to be newly constructed : 350MW class**

Item Total Cost Breakdown

a) Construction Cost JPY EUR

Foreign

Currency

EUR

Local

Currency

EUR

Power generation equipment/

District Heat supply equipment

14,938,968,086 116,292,761 116,292,761 0

Erection 3,457,862,744 26,917,817 6,521,481 20,396,336

Civil/Buildings 3,156,998,856 24,575,735 0 24,575,735

Engineering 1,532,311,805 11,928,319 11,928,319 0

Admin Cost 6,798,148,673 52,920,354 52,920,354 0

Subtotal 29,884,290,164 232,634,985 187,662,915 44,972,070

b) Reserve Cost * 3,509,786,056 27,322,015 22,040,231 5,281,783

Total 33,394,076,220 259,957,000 209,703,146 50,253,854

*Reserve cost is 11.7% of construction cost. This includes consulting cost, various procedures cost, land acquisition cost

and finance costs, etc.

** These costs are rounded to integers.

Source: prepared by the study team

8-2

2) O&M Cost

The operation & maintenance cost is estimated based on the experiences of the study team. The calculated result is

shown in Table 8-2.

Table 8-2 Annual O&M Cost

Annual Operation & Maintenance Cost

JPY EUR

a) Operation & Maintenance Cost 720,000,000 5,600,000

b) LTSA 550,000,000 4,400,000

Total 1,270,000,000 10,000,000


8-3

(2) Preliminary Financial and Economic Analysis1) Methodology of Economic and Financial Analysis

The objectives of economic and financial analysis are to evaluate the Project’s economic and financial viability by

means of indices such as internal rate of returns (IRR) and net present values (NPV) which is calculated using the

discounted cash flow calculation method, and to test variability of indices under adverse or vantage conditions.

In this report, Financial Internal Rate of Return (FIRR) is calculated as an investment evaluation for this project and

Equity Internal Rate of Return (EIRR) is calculated as an investment evaluation for equity capital. The feasibility

of this project is evaluated from these results.

2) Scenarios

General settings of economic and financial analysis are explained here. In this report, economic and financial

analysis based on the two scenarios, as shown in table 8-3, will be carried out. Scenario 1 is defined based on

“Energy Strategy to 2030 with a 2050 Prospective”, which was published from Ministry of Energy on 19th

September 2018. Scenario 2 is defined based on the considering the current business situation, which Cernavoda

NPP units 3 and 4 are not developed but the existent units are maintained. This is a different scenario from Energy

Strategy, but take into consideration the European tendency of removing nuclear which have become significant in

the last decade. In such case, it will have a hard time to develop Cernavoda NPP units 3 and 4.

Table 8-3 Outline of Each Scenario

Scenario Outline

Scenario 1

Based on Energy Strategy

a) Cernavoda NPP


Units3 and 4 are commissioned in 2026 and 2036 (~2×700 MW).

b) Tarnita Lapnstesti pumped storage Hydro Power Plant (PSHPP)

PSHPP is commissioned in 2028. (1000MW)

Scenario 2

Considering the Current Situation

a) Cernavoda NPP


b) Tarnita Lapnstesti PSHPP

PSHPP are commissioned in 2028. (1000MW)


As shown in figure 8-1 and figure 8-2, differentiation between each scenario is reflected to ratio of the power

generation mix. This forecast of power generation mix is used the results of Romanian Electricity & Gas Market

Study of Tractebel Engie (Romania).

The ratio of renewable energy will be increased in both scenarios. In scenario 1, the ratio of nuclear increases in

8-4

2026 and 2036, accompanied by minor share of gas. On the other hand, in scenario 2, the demand is covered with

additional capacity, mainly gas. From the figures presented below, it can be observed that natural gas-based

electricity plays important role in the Romanian electricity market.

Figure 8-1 Power Generation Mix in Scenario1

(Source: prepared by the study team based on Tractebel Engie electricity & gas market study report)

Figure 8-2 Power Generation Mix in Scenario2


0

15000

30000

45000

60000

75000

90000

105000

2019

2021

2023

2025

2027

2029

2031

2033

2035

2037

2039

2041

2043

2045

2047

2049

Pow

erG

ener

atio

n,G

Wh

Wind Photovoltaics (PV)Nuclear Hydro RoR (Run-of-River)hydro LC (Lake-Cascade) Cogen ligniteCogen gas Cond ligniteCond hardcoal Cond gas

0

15000

30000

45000

60000

75000

90000

105000

2019

2021

2023

2025

2027

2029

2031

2033

2035

2037

2039

2041

2043

2045

2047

2049

Pow

erG

ener

atio

n,G

Wh

Wind Photovoltaics (PV)Nuclear Hydro RoR (Run-of-River)hydro LC (Lake-Cascade) Cogen ligniteCogen gas Cond lignite

8-5

3) Assumptions

The long-term forecast of CO2 price, wholesale gas, electricity and ancillary services prices are cited from the study

by Tractebel Engie.

a) Price Outlook

In Romania, align to the harmonized Continental European markets, CO2 price, natural gas pricewill increase, accordingly the electricity price will increase.

I) CO2 Price

CO2 prices forecast is shown in figure 8-3. This shows that CO2 prices will continuously increase until 2040 in order

to align the EU-wide 2030- emissions target — and hence the EU-ETS cap — with the Paris Agreement.

Figure 8-3 Long-term Forecast of CO2 Price (Both Scenarios)


II) Gas Price

Gas price forecast is shown in figure 8-4. This shows that gas prices will be continuously increase inorder to align to the harmonized Continental European markets.

Figure 8-4 Long-term Forecast of Gas Price (Both Scenarios)


0

10

20

30

40

50

60

70

80

2018

2020

2022

2024

2026

2028

2030

2032

2034

2036

2038

2040

2042

2044

2046

2048

2050

EUR/

ton

CO2

0

5

10

15

20

25

30

35

2018

2020

2022

2024

2026

2028

2030

2032

2034

2036

2038

2040

2042

2044

2046

2048

2050

EUR/

MW

h

8-6

III) Electricity Price

Electricity prices forecasts are shown in Figure 8-5 and Figure 8-6. Electricity price in Romania which is one of

the cheapest in Europe, will also show rise, and align to the harmonized Continental European markets. It can be

seen that the spot price will skyrocket from 2024 due to the increase of renewable and decrease of lignite.

The CCPP to be newly constructed will provide electricity mainly through the spot market, since bids from Hydro

and Nuclear dominate the forward market. The electricity selling prices in scenario 1 are lower than scenario 2,

because the cheap nuclear is injected in large volume in scenario1.

In the following figures, Frequency Containment Reserve (FCR), Automatic Frequency Restoration Reserve

(aFRR) and Manual Frequency Restoration Reserve (mFRR) indicate transactions in the ancillary services market.

These refer to capacity reservation over a predefined period. FCR is included in this analysis. At present, Romania

lacks a market for FCR, but the ancillary services structure in compliance with European regulation will start its

operation in 2021.

8-7

Figure 8-5 Long-term Forecast of Electricity Prices (Scenario1)


Table 8-6 Long-term Forecast of Electricity Prices (Scenario2)


0

20

40

60

80

100

120

140

2018

2020

2022

2024

2026

2028

2030

2032

2034

2036

2038

2040

2042

2044

2046

2048

2050

EUR/

MW

hEE spot priceavg EE price CCPPavg EE price refEE forward priceFCRaFRRmFRR

0

20

40

60

80

100

120

140

2018

2020

2022

2024

2026

2028

2030

2032

2034

2036

2038

2040

2042

2044

2046

2048

2050

EUR/

MW

h

EE spot priceavg EE price CCPPavg EE price refEE forward priceFCRaFRRmFRR

8-8

b) Primary Assumptions

The main assumptions are used in this analysis are shown in Table 8-4, Table 8-5 and Table 8-6.

Table 8-4 Summary of the Common Assumptions

Item Assumption*

Power

Production

Output Net 338,354 kW

Efficiency Net 56.03%

CO2 Emission Factor 0.344 ton CO2/MWh

District heating supply 111,000 Gcal/year

Project Period 3 years for construction,

20 years for commercial operation

Discount Rate 6%

Depreciation Period 20 years

Cost Construction Cost 259,957,000 EUR

Operation &

Maintenance Cost

10,000,000 EUR (escalation rate of 1.5% per year

Tax (for corporate) 16%

Fuel Cost 21.22 EUR/MWh average escalation rate of 2.11% per year

CO2 Price 37 EUR/ton average escalation rate of 4.60% per year

Income Heat Selling Price 34.2 EUR/Gcal average escalation rate of 2.11% per year

Cogeneration Bonus not considered

Transformation Rate 1 EUR=128.46 JPY

1 EUR=1.13 USD

1 EUR=4.65 RON

Financing Structure JBIC and Japanese private banks covered by Nippon Export and

Investment Insurance’s (NEXI) buyer’s credit insurance.

JBIC and Banks 85%

Owner 15%

Financing Conditions Interest 3% per year, Commitment fee: 0.5%

Repayment period 12 years

* Each price is based on the reference year 2024.(Source: prepared by the study team)

8-9

Table 8-5 Assumptions for Scenario 1

Item Assumption *

Capacity Factor 2024 - 2026 68.5 %

2027 - 2036 51.4 %

2037 - 2043 58.2 %

Income Electricity

Selling

Price

Whole sale

electricity


Forward 38.68 EUR/MWh(average escalation rate of 2.20% per year)


54.15 EURO/MWh.

Balancing

market

Upload 16.84 EUR/MWh(average escalation rate of 4.1% per year)

Dowonload 81.96 EUR/MWh average escalation rate of 2.03% per

year

Ancillary

Services

market

FCR 20.31 EUR/MWh average escalation rate of 2.18% per year

aFRR 18.48 EUR/MWh average escalation rate of 1.89% per year

mFRR 10.68 EUR/MWh average escalation rate of 2.71% per year



Table 8-6 Assumption for scenario 2

Item Assumption *

Capacity factor 68.5 %

Income Electricity

Selling

Price

Whole sale

electricity

Spot 54.46 EUR/Mwh (average escalation rate of 2.54% per year)

Forward 38.68EUR/MWh(average escalation rate of 2.42% per year)


54.15 EUR/MWh

Balancing

market

Upload 16.63 EUR/MWh (average escalation rate of 4.2% per year)

Download 80.94 EUR/MWh (average escalation rate of 2.13%

per year)

Ancillary

Services

market

FCR 20.12 (average escalation rate of 2.32% per year)

aFRR 18.30 EUR/MWh(average escalation rate of 1.94% per year)

mFRR 10.59 EUR/MWh (average escalation rate of 2.75% per year)



4) The Results of Analysis

The results of economic and financial analysis based on the above assumptions are shown in Table 8-7 and Table 8-

8.

8-10

12

34

56

78

910

11

12

13

14

15

16

17

18

19

20

338

.354

338.3

54

338.3

54

338.3

54

338.3

54

338

.354

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

54.4

55.0

55.0

54.2

54.2

54.2

54.2

54.2

54.2

54.2

54.2

54.2

54.2

53.9

53.9

53.9

53.9

53.9

53.9

53.9

68.5

68.5

68.5

51.4

51.4

51.4

51.4

51.4

51.4

51.4

51.4

51.4

51.4

58.2

58.2

58.2

58.2

58.2

58.2

58.2

54.2

56.9

61.0

68.4

74.0

80.1

86.4

88.2

89.2

90.2

91.2

92.2

93.1

91.5

92.4

93.3

94.2

94.9

94.4

94.1

16.8

17.7

19.0

20.0

21.3

23.0

24.9

26.0

27.1

28.2

29.3

30.5

31.8

31.7

33.0

34.4

35.8

37.2

38.2

39.4

20.3

20.7

21.5

21.5

21.7

22.5

23.4

24.1

24.8

25.4

26.1

26.9

27.6

27.0

27.7

28.5

29.3

29.9

30.4

30.9

18.5

19.0

19.9

20.5

21.3

22.3

23.5

24.0

24.5

25.0

25.4

25.9

26.4

26.0

26.5

27.0

27.5

28.0

28.3

28.6

10.7

11.0

11.5

11.9

12.3

12.9

13.5

13.9

14.3

14.7

15.0

15.4

15.8

15.7

16.1

16.5

16.9

17.2

17.5

17.8

34.2

34.9

35.4

36.4

37.3

38.3

39.4

40.1

40.9

41.7

42.5

43.3

44.2

45.0

45.9

46.7

47.3

47.8

48.4

49.0

21.2

21.7

22.0

22.6

23.2

23.8

24.5

24.9

25.4

25.9

26.4

26.9

27.4

28.0

28.5

29.0

29.4

29.7

30.1

30.4

37

40

43

46

49

52

55

57

59

61

63

65

67

69

71

73

75

75

75

75

12

34

56

78

910

11

12

13

14

15

16

17

18

19

20

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

1,5

22,5

93

1,5

22,5

93

1,5

22,5

93

1,5

22,5

93

1,5

22,5

93

1,5

22,5

93

1,5

22,5

93

1,5

22,5

93

1,5

22,5

93

1,5

22,5

93

1,7

25,6

05

1,7

25,6

05

1,7

25,6

05

1,7

25,6

05

1,7

25,6

05

1,7

25,6

05

1,7

25,6

05

158

,064

168,9

10

171,3

20

170,6

55

173,1

74

175

,562

173,5

87

175,0

94

176,6

01

178,1

08

179,6

15

179,1

39

180,6

46

182,9

48

184,2

86

185,6

24

186,9

62

191,6

79

192,5

94

193,7

91

53,1

05

53,1

05

53,1

05

50,2

23

50,2

23

50,2

23

50,2

23

50,2

23

50,2

23

50,2

23

50,2

23

50,2

23

50,2

23

55,1

63

55,1

63

55,1

63

55,1

63

55,1

63

55,1

63

55,1

63

303

,403

323,1

47

327,6

76

336,4

60

341,2

61

346

,062

342,0

90

345,1

21

348,1

51

351,1

82

354,2

13

353,2

56

356,2

86

349,2

68

352,2

99

355,3

29

358,3

60

369,0

47

371,1

21

373,8

32

147

,919

159,1

45

161,4

96

150,8

13

153,2

05

155

,221

153,5

54

154,8

26

156,0

99

157,3

71

158,6

44

158,2

42

159,5

15

173,1

07

173,8

96

174,6

84

175,4

73

178,2

55

178,7

95

179,5

01

111

,000

111,0

00

111,0

00

111,0

00

111,0

00

111

,000

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

109.9

115.6

123.8

104.2

112.6

121.9

131

.6134.3

135.9

137.4

138.8

140.3

141.8

157.8

159.4

161.0

162.5

163.7

162.9

162.4

2.7

3.0

3.3

3.4

3.7

4.0

4.3

4.6

4.8

5.0

5.3

5.5

5.7

5.8

6.1

6.4

6.7

7.1

7.4

7.6

1.1

1.1

1.1

1.1

1.1

1.1

1.2

1.2

1.2

1.3

1.3

1.3

1.4

1.5

1.5

1.6

1.6

1.7

1.7

1.7

5.6

6.1

6.5

6.9

7.3

7.7

8.0

8.3

8.5

8.8

9.0

9.1

9.4

9.1

9.3

9.6

9.9

10.3

10.5

10.7

1.6

1.8

1.9

1.8

1.9

2.0

2.1

2.2

2.2

2.3

2.4

2.4

2.5

2.7

2.8

2.9

3.0

3.1

3.1

3.2

3.8

3.9

3.9

4.0

4.1

4.3

4.4

4.4

4.5

4.6

4.7

4.8

4.9

5.0

5.1

5.2

5.2

5.3

5.4

5.4

124.7

131.5

140.6

121.5

130.7

141.0

151

.6155.0

157.2

159.3

161.5

163.5

165.8

181.9

184.3

186.6

188.9

191.2

191.0

191.1

3,7

34,4

91

3,7

34,4

91

3,7

34,4

91

2,8

19,5

77

2,8

19,5

77

2,8

19,5

77

2,8

19,5

77

2,8

19,5

77

2,8

19,5

77

2,8

19,5

77

2,8

19,5

77

2,8

19,5

77

2,8

19,5

77

3,2

02,7

41

3,2

02,7

41

3,2

02,7

41

3,2

02,7

41

3,2

02,7

41

3,2

02,7

41

3,2

02,7

41

698,3

63

698,3

63

698,3

63

523

,772

523,7

72

523,7

72

523,7

72

523,7

72

523,7

72

523,7

72

523,7

72

523,7

72

523,7

72

593,6

08

593,6

08

593,6

08

593,6

08

593,6

08

593,6

08

593,6

08

79.3

81.0

82.3

63.7

65.4

67.1

69.0

70.2

71.6

73.0

74.4

75.9

77.4

89.6

91.4

92.9

94.0

95.2

96.3

97.5

25.8

27.9

30.0

24.1

25.7

27.2

28.8

29.9

30.9

32.0

33.0

34.0

35.1

41.0

42.1

43.3

44.5

44.5

44.5

44.5

10.0

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

11.0

11.2

11.3

11.4

11.5

11.6

11.7

11.8

12.0

12.1

115.1

119.1

122.5

98.1

101.5

104.9

108

.4110.8

113.3

115.9

118.5

121.1

123.7

141.9

145.0

147.9

150.3

151.5

152.8

154.1

12

34

56

78

910

11

12

13

14

15

16

17

18

19

20

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

-221

-2

16

12

18

25

32

33

32

32

31

31

30

28

28

27

27

28

26

25

00

12

34

55

55

55

55

44

44.5

4.2

4.0

18

18

18

18

18

18

18

18

18

18

18

18

00

00

00.0

0.0

0.0

76

65

44

33

22

11

00

00

00.0

0.0

0.0

-221

-203

-184

-16

6-147

-129

-110

-92

-74

-55

-37

-18

00

00

00

0.0

0.0

0.0

-260

10

12

17

21

26

32

38

39

39

38

38

38

37

35

35

34

34

35.1

33.9

32.9

-38.9

9-1

5.4

8-12.2

3-6.9

1-1

.94

3.5

79.9

516.4

117.8

018.0

618.2

918.5

018.5

437.1

735.4

434.8

434.4

134.3

135.1

433.8

932.8

9

Tabl

e 8-

7R

esul

t ofE

cono

mic

and

Fin

anci

alA

naly

sis(

Scen

ario

1:b

ased

onEn

ergy

Stra

tegy

)

(Sou

rce:

prep

ared

by

the

stud

yte

am)

8-11

Year

12

34

56

78

910

11

12

13

14

15

16

17

18

19

20

NetP

ow

er

Out

put

(MW

)338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

338.3

54

Net Therm

alEffic

iency

(%)

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

56.0

Tota

lEffic

iency

(%)

54.4

55.0

55.0

54.2

54.2

54.2

54.2

54.2

54.2

54.2

54.2

54.2

54.2

53.9

53.9

53.9

53.9

53.9

53.9

53.9

Cap

acity

Fac

tor (%

)68.5

68.5

68.5

68.5

68.5

68.5

68.5

68.5

68.5

68.5

68.5

68.5

68.5

68.5

68.5

68.5

68.5

68.5

68.5

68.5

Whole

sal

eEle

ctr

icity

Price (E

UR/M

Wh)

54.2

56.9

61.0

66.4

71.8

77.8

84.0

85.8

86.9

87.9

89.0

90.0

91.0

92.1

92.9

93.9

94.9

95.5

95.0

94.8

Ele

ctr

icity

Selling

Price

atB

alancin

gM

arke

t (E

UR

/M

Wh)

16.6

17.5

18.8

20.4

21.7

23.4

25.4

26.6

27.7

28.8

29.9

31.2

32.4

33.8

34.9

36.3

37.8

39.0

39.9

41.1

FC

RPrice (EU

R/M

Wh)

20.1

20.5

21.3

22.1

22.4

23.3

24.3

25.0

25.6

26.3

27.0

27.7

28.4

29.2

29.7

30.4

31.2

31.6

31.9

32.3

aFR

RPrice (EUR

/M

Wh)

18.3

18.8

19.7

20.8

21.6

22.7

23.9

24.4

24.9

25.3

25.8

26.3

26.8

27.2

27.6

28.1

28.5

28.9

29.1

29.4

mFRR

Price

(EU

R/M

Wh)

10.6

10.9

11.4

12.0

12.5

13.1

13.8

14.2

14.5

14.8

15.2

15.6

15.9

16.3

16.6

17.0

17.4

17.7

17.9

18.2

Heat

Selling

Price (EU

R/M

Wh)

34.2

34.9

35.4

36.4

37.3

38.3

39.4

40.1

40.9

41.7

42.5

43.3

44.2

45.0

45.9

46.7

47.3

47.8

48.4

49.0

FuelP

rice (EUR/G

cal

)21.2

21.7

22.0

22.6

23.2

23.8

24.5

24.9

25.4

25.9

26.4

26.9

27.4

28.0

28.5

29.0

29.4

29.7

30.1

30.4

CO

2Price (EU

R/to

n)

37

40

43

46

49

52

55

57

59

61

63

65

67

69

71

73

75

75

75

75

Year

12

34

56

78

910

11

12

13

14

15

16

17

18

19

20

Annual

Pow

erP

roduction (M

Wh/an

)2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

2,0

30,1

24

Annual

Pow

erP

roduction

atB

alan

cin

gM

arke

t (M

Wh/an

)158,0

64

168,9

10

171,3

20

168,6

79

171,1

23

173,2

42

171,4

89

172,8

27

174,1

64

175,5

02

176,8

40

176,4

17

177,7

55

174,6

57

175,9

95

177,3

33

178,6

70

183,3

88

184,3

03

185,5

00

Annual

FC

RC

ontr

actC

apacity

(MW

h/an

)53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

53,1

05

Annual

aFRR

Contr

actC

apacity

(M

Wh/an

)303,4

03

323,1

47

327,6

76

322,7

26

327,2

55

331,7

83

328,0

37

330,8

96

333,7

54

336,6

13

339,4

71

338,5

69

341,4

27

334,8

07

337,6

66

340,5

25

343,3

83

353,4

63

355,4

19

357,9

77

Annual

mFRR

Contr

actC

apa

city

(M

Wh/an

)147,9

19

159,1

45

161,4

96

158,9

05

161,3

54

162,8

77

161,6

17

162,5

78

163,5

39

164,5

00

165,4

61

165,1

58

166,1

19

163,8

93

164,8

54

165,8

15

166,7

76

170,1

65

170,8

22

171,6

82

Annual

Heat

Pro

duction (G

cal

/an

)111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

111,0

00

Incom

es

from

Whole

sale

Ele

ctr

icity

(mil.EU

R/an

)109.9

115.6

123.8

134.8

145.8

157.9

170.6

174.3

176.4

178.5

180.6

182.7

184

.8186

.9188.6

190.6

192.7

193.8

192.9

192.4

Incom

es

from

Ele

ctr

icity

Selling

atB

alancin

gM

ark

et (m

il.EUR/an

)2.6

3.0

3.2

3.4

3.7

4.1

4.4

4.6

4.8

5.1

5.3

5.5

5.8

5.9

6.1

6.4

6.7

7.1

7.4

7.6

Incom

es

from

FC

R (m

il.EUR

/an

)1.1

1.1

1.1

1.2

1.2

1.2

1.3

1.3

1.4

1.4

1.4

1.5

1.5

1.5

1.6

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7.8

8.1

8.3

8.5

8.8

8.9

9.1

9.1

9.3

9.6

9.8

10.2

10.3

10.5

Incom

es

from

mFRR

(m

il.EU

R/an

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1.7

1.8

1.9

2.0

2.1

2.2

2.3

2.4

2.4

2.5

2.6

2.6

2.7

2.7

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2.9

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from

heat

sale

s (m

il.EUR/an

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4.3

4.4

4.4

4.5

4.6

4.7

4.8

4.9

5.0

5.1

5.2

5.2

5.3

5.4

5.4

Tota

lincom

es

124.5

131.3

140.4

152.0

163.9

177.1

190.7

195.0

197.8

200.6

203.3

205.9

208

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216.3

219.0

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FuelC

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34,4

91

3,7

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91

3,7

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91

3,7

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3,7

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79.3

81.0

82.3

84.4

86.6

88.9

91.3

93.0

94.8

96.7

98.6

100.5

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s(m

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27.9

30.0

32.1

34.2

36.3

38.4

39.8

41.2

42.6

44.0

45.4

46.8

48.2

49.6

51.0

52.4

52.4

52.4

52.4

Ope

ration &

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tenan

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Cost

(m

il.EU

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10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

11.0

11.2

11.3

11.4

11.5

11.6

11.7

11.8

12.0

12.1

Tota

lCost

s (m

il.EU

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115.1

119.1

122.5

126.9

131.3

135.7

140.3

143.6

146.9

150.2

153.6

157.1

160

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170.9

173.8

175.2

176.7

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34

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910

11

12

13

14

15

16

17

18

19

20

Depr

ecia

tion

Cost

s (m

il.EU

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)11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

11.6

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tax

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fit (m

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30

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31

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43

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23

29

37

44

45

45

44

44

43

42

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39.9

39.9

40.4

38.8

37.7

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rofit (m

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-38.

99

-15.5

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2-7.0

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66.4

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222.3

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324.0

824.0

923.9

442.

38

41.

41

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039.9

439.8

740.4

338.8

337.6

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5%

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nBonus

No

17.2

7%

117.2

47

MEUR

Tabl

e 8-

7R

esul

t ofE

cono

mic

and

Fina

ncia

lAna

lysi

s(Sc

enar

io 2

:bas

edon

the

Con

sider

ing

Cur

rent

Bus

ines

sSitu

atio

n),B

ase

Cas

e

(Sou

rce:

prep

ared

by

the

stud

yte

am)

8-12

a) FIRR

FIRR is calculated to evaluate the financial feasibility of this project. FIRR and NPV are shown in Table 8-9.

Table 8-9 FIRR and NPV for Each Scenario

Scenario FIRR NPV

Scenario 1 (Energy Strategy Base) 8.78 % 74 mil. EUR

Scenario 2 (Considering the Current Situation) 10.15 % 117 mil. EUR


b) EIRR

The equity IRR represents the return which attributes to projects’ equity holders. The results are indicated that this

project can bring sufficient level of economic return and is viable.

Table 8-10 EIRR for Each Scenario

Scenario EIRR

Scenario 1 (Energy Strategy Base) 14.57 %

Scenario 2 (Considering the Current Situation) 17.27 %


8-13

(3) Sensitivity AnalysisThe sensitivity analysis is to assess impact against the FIRR/EIRR of the project when some selected items in the

assumption of this analysis are changed. In this report, 5 parameters plant factor, electricity selling price, fuel cost,

construction cost and CO2 price are selected for sensitivity analysis based on scenario 2 and the impact againstthe FIRR/EIRR are assessed.

As shown in Table 8-11, electricity selling price and fuel cost are the top two parameters that give significant impact

against FIRR/EIRR. On the other hand, the change of plant factor has least impact among the 5 since CO2 price

costs and efficiency of partial load.

Table 8-11 Results of Sensitivity Analysis

Item Variance FIRR

(%)

FIRR

Difference from

the Base Case

(%)

EIRR

(%)

EIRR

Difference from

the Base Case

(%)

Base Case 10.15% 17.27%

Plant Factor 68.5% 78.5% 9.68% -0.47% 16.00% -1.27%

68.5% 58.5% 9.99% -0.16% 17.15% -0.12%

Electricity

Selling Price

With Cogeneration

Bonus*

13.43% +3.28% 31.40% +14.13%

+10% 14.82% +4.67% 29.66% +12.39%

-10% 4.35% -5.80% 5.41% -11.86%

Fuel cost +10% 6.91% -3.24% 10.22% -7.05%

-10% 13.02% +2.87% 24.80% +7.53%

Construction

Cost

+10% 9.09% -1.06% 15.00% -2.27%

-10% 11.36% +1.21% 19.95% +2.68%

CO2 Emission

Cost

+10% 8.86% -1.29% 14.40% -2.87%

-10% 11.35% +1.20% 20.14% +2.87%

*The cogeneration bonus is 10 EUR/MWh for 5 years from start of commercial operation.


8-14

(4) Conclusion

Based on the aforesaid Romania’s Energy Strategy and study by Tractebel Engie, in consideration of the current

business situation, the project in both scenarios shows high value in all measurement indicators including FIRR and

EIRR. This indicates that this project is financially and economically viable. These high IRRs arise from the future

structure that the CCPP to be newly constructed will play a main role in the electricity market as renewable energy

increases, and thus the project is able to make profit. Therefore, this project is important for the electricity market

in Romania.

However, in both scenarios, the revenue is low for the first 5 years since the start of commercial operation, and

during this period, it is hard to repay loans. This is because Gas and CO2 cost turns out to be a big burden to the

project and spoils its cash flow. In this regard, scheme to offset Gas and CO2 cost, such as cogeneration support, is

desired.

Chapter 9Evaluation of Environmental and Social Impacts

9-1

(1) Environmental and Social Baseline Conditions

1) Overview

This project is related to the development of a new 350 MW CCPP in the existing site of Deva CFPP, in HunedoaraCounty, Western Romania. Currently, in the existing site there are 6 coal-fired units but most of them have not operatedfor a long time a do not meet the new EU air emission standards, and were decommissioned or are to be decommissioned.

Since Romania has joined the EU, stricter air emission limit values have been applied to the power plants, and the goalof the operators in Romania today is to reach the air emissions concentrations that follow the standards after 2021. Inthis sense, this project is indispensable to ensure that emissions from Deva power plants achieve full environmentalcompliance while continuing electricity production.

This preliminary environmental and social impacts evaluation of the installation of a CCPP to be newly constructed willbe presented altogether with the full F/S.

2) Site Location

The project site is located in Western Romania, Hunedoara County, 10 km North-West from Deva city, and 2km Westfrom Mintia village, on the bank of the Mures River. The project site will use the land already used for the existingCFPP belonging to Electrocentrale Deva.

The site is located along the E673 route and in the middle of an agricultural area. Land use in the vicinity of the projectssites comprises:w Agricultural land;w Existing industrial area;w Sparse residential developments;w Existing roads;

For the environmental part of this report, it has been supposed in Chapter 4 that the new Power Plant will be installedaccording to Case 3 as it is the most probable site to be used for this project. The geographical coordinates of the newpower plant for Case 3 is shown in Table 9-1.The relative location of the power plant is shown in Figure 9-1, and its detailed satellite pictures are shown in Figure 9-2.

Table 9-1 Site Location Coordinates (in Decimal Degrees)Latitude Longitude

CCPP to be newlyconstructed coordinates

(Case 3)45°54’47.54’’ 22°49’20.85’’

(Source: prepared by the study team based on Google Maps)

9-2

Figure 9-1 Location of the Project Site

(Source: prepared by the study team based on Google Maps)

Figure 9-2 Detail of Deva CFPP


Deva PowerPlant

Mures River

Deva

1km

Mures River

100m

9-3

Figure 9-3 to 9-8 Views of the Existing Deva CFPPFigure 9-3 View of the 235 MW (TA3) Turbine of the

Existing Power PlantFigure 9-4 View of the Cooling Towers of the Existing

Power Plant

Figure 9-5 View of the Stacks of the Existing PowerPlant

Figure 9-6 View of Case 3 for New Project Site(East-West View)

Figure 9-7 View of Case 3 project Site(South-North View)

Figure 9-8 View of Case 3 for New Project Site(East-West View)

(Source: Photo by the study team)

9-4

3) Environmental and Social Baseline Data

a) Meteorology

The meteorology data1 of the project site indicate a humid and cold winter (-2°C to 11°C) and a warm and humidsummer and fall through May to October (21°C to 28°C). Precipitation amount is steady throughout the year, with anannual average rainfall of 600mm. The climate can be defined as moderate- humid continental.2

Average wind speed is mostly comprised between 1 and 5km/h; and tends to be 5 to 12km/h in March and April. Thewind rose shows a wind direction coming principally from the West and North West.

Average monthly temperatures, precipitation, wind speed and annual wind direction are shown in Figure 9-9 to Figure9-11.

Figure 9-9 Precipitation and Temperatures in Deva (Monthly Data for Five-year Average)

(Source: HP https://www.meteoblue.com/en/weather/forecast/modelclimate/45.913N22.823E3)

1 The meteorology data were resourced from meteoblue climate diagrams based on 30 years of hourly weathersimulations. They give good indications of typical climate patterns and expected conditions. The simulated weatherdata have a spatial resolution of approximately 30km and may not reproduce local weather effects such as local winds.2 National Climate monitoring: Meteo Romania Administratia nationala de meteorologiehttp://www.meteoromania.ro/anm2/clima/monitorizare-climatica/3 The data is derived from NEMS (National Energy weather model at approximately 30km resolution and cannotreproduce detail local weather effects, such as heat islands, cold air flows, thunderstorms or tornadoes.

https://www.meteoblue.com/en/weather/forecast/modelclimate/45.913N22.823E

http://www.meteoromania.ro/anm2/clima/monitorizare-climatica/

9-5

Figure 9-10 Wind Speed Data in Deva (Monthly Data)

(Source: HP https://www.meteoblue.com/en/weather/forecast/modelclimate/deva_romania_679452)

Figure 9-11 Wind Direction

(Source: HP https://www.meteoblue.com/en/weather/forecast/modelclimate/deva_romania_679452)

b) Geography and Topography

Deva is a town situated on the left bank of the middle course of the Mures River, in the center of Hunedoara County.The town is bordered by Poiana Ruscai Mountains and the Zarand Mountains in the west, with the Western Carpathians(Apuseni Mountains) in the north, and the Uroiu Magura in the East. (Figure 9-12)

https://www.meteoblue.com/en/weather/forecast/modelclimate/deva_romania_679452)

https://www.meteoblue.com/en/weather/forecast/modelclimate/deva_romania_679452

9-6

The project site altitude is 187 m above sea level, whereas the mountains surrounding the town are about 250-400 mand highest one is 650 m. The area occupied by Deva city is 41 km2, and its population is estimated to be approximately61,000 inhabitants according to a census conducted in 2011.

The project site is situated 7.5km North West of Deva (the direct distance), on the left bank of the Mures River. It islocated between two mountains, the Western Carpathians Mountains on the other side of the river in the north and thePoiana Rusaai Mountains in the South and West.

Figure 9-12 Geography around the Project Site

(Source: prepared by the study team based on Google Earth )

c) Main Habitats and Vegetation

There is no protected area within the project site. The nearest area considered as having a natural value, is the part ofMures River between Brani ca and Ilia, 3 to 12 km North-West from the project site (Figure 9-13). This site has beendesignated as a “site of community importance” according to the European Habitats Directive4 in 2011 but does notneed any caution concerning the management or species to be protected.It should be noted that a part of the Mures River itself is included in the designation, requiring particularly attentionconcerning the water intake and discharge for the project.

4 Council Directive 92/43/EEC on the conservation of natural habitats

Poiana Rusc iMountainsZarand Mountains

Mures River

Deva city

WesternCarpathians

Uroiu M gura

Project site

9-7

Figure 9-13 Protected Area near the Project Site

Legend:Green with Red line borders: Site of Community Importance (SCI)

(Source: prepared by the study team based on HPhttp://atlas.anpm.ro/atlas?themeId=47&showIds=2996&x=502400.1716409733&y=494383.5268450371# and

Directorate-General for Environment (EU))

d) Air Quality

In Romania, there are currently 148 air quality monitoring stations, equipped with automatic and continuousmeasurement of main air pollutants. The Re eaua Na ional de Monitorizare a Calit ii Aerului (National Network forMonitoring Air Quality: RNMCA) comprises 41 local centers that gather and broadcast panel data information to thepublic after validation of the National Environmental Protection Agency.

Currently, RNMCA monitors continuously SO2, NOx, CO, ozone (O3), PM10 and PM2.5, etc. Air quality at each stationis represented by the suggestive quality indices, derived from the main air pollutants measured concentration values, asshown in Figure 9-13 to Figure 9-14.

Project site

http://atlas.anpm.ro/atlas?themeId=47&showIds=2996&x=502400.1716409733&y=494383.5268450371

9-8

Figure 9-13 Air Pollutant Monitoring Stations in Romania

(Source: prepared by the study team based on HP http://www.calitateaer.ro/public/home-page/?__locale=ro)

Deva city

30km

http://www.calitateaer.ro/public/home-page/?__locale=ro)

9-9

Figure 9-15 Closest Monitoring Stations from the Project Site (HD-1 and HD-2)


Figure 9-14 Details of the Air Monitoring for Station HD-2 (October 22, 2018)


The air quality data at the closest monitoring station from the power plant (HD-2) for 2017 are as shown in Table 9-2below. It can be said that overall concentrations were in accordance with the Romanian standards except for themaximum daily average value for PM10 that largely exceeds the limit standard.

According to Deva CFPP, given the fact that the monitoring station is located 10km from the power station, theexceedance cannot be explained only by the operation of the power plant, but also by activities and traffic in Deva cityand industrial emissions from the factories around the site (cement production etc.).

Project Site



9-10

Table 9-2 Air Quality Monitoring Results at HD-2 Monitoring Station Throughout 2017

Parameter Monitored dataat HD-2

Romanian standardsIFC* standardsLimit

Critical Level(impact onvegetation)

SO2

Max hourly average( g/m3) 310.26 350 - -

Max 24-hour average( g/m3) 41.85 125 - 125 (IT-1**)

20 (Guideline)Yearly average ( g/m3) 10.26 - 20 -

NO2

Max hourly average( g/m3) 108.06 200 - 200

Yearly average ( g/m3) 16.58 40 - 40

NOx Yearly average ( g/m3) 32.10 - 30 -

PM10

Max 24-hour average( g/m3) 143.62 50 - 150 (IT-1)

50 (Guideline)

Yearly average ( g/m3) 23.27 40 - 70 (IT-1)20 (Guideline)

PM2.5 Yearly average ( g/m3) - 25 - 35 (IT-1)10 (Guideline)

CO Max. 8-hour average(mg/m3) Max daily 2.51 10 - -

*International Finance Corporation: IFC** IT-1: Interim Target 1

(Source: prepared by the study team based on Law No.104/2011 and IFC Environmental, Health, and Safety (EHS)Guidelines)

e) Water Quality

Water quality of the Mures River is monitored monthly by the Water Environment Agency. Based on the results of themonthly monitoring, the ecological status of the river is determined according to a classification established inOrdinance No.161/2006.

According to the monitoring results, Mures River around the project site is a water source of Category II. Although theconcentrations in are not the water quality standard values for Mures River, it can be considered as a good representationof the biophysical and chemical characteristics of this water body.

Table 9-3 Characteristics of a Class II Water Body

Parameters Unit Water QualityClass II

pH - 6.5-8.5Dissolved oxygen mg O2/L 7-Epilimnion (top-most layer) mg O2/L 70-90-Hipolimnion (deeper layer) mg O2/L 70-50- Non-stratified waters mg O2/L 70-50Chemical Oxygen Demand (COD(c))-Cr mg O2/L 25COD(c)-Mn mg O2/L 10Biochemical oxygen demand (BOD5) mg O2/L 5Ammonium (NH4+) mg/L 0.8Nitrite (NO2-) mg/L 0.03Nitrate (NO3-) mg/L 3Total Nitrogen mg/L 7

9-11

Parameters Unit Water QualityClass II

Soluble orthophosphates (PO43-) mg/L 0.2Total phosphorus (PO4-) mg/L 0.4Chlorophyll “a” g/L 50Dry filtrate residue at 105°C mg/L 750Chlorine (Cl-) mg/L 50Sulfates (SO42-) mg/L 120Calcium (Ca2+) mg/L 100Magnesium (Mg2+) mg/L 50Total Chromium (Cr) g/L 50Copper (Cu) g/L 30Zinc (Zn) g/L 200Arsenic (As) g/L 20Barium (Ba) mg/L 0.1Selenium (Se) g/L 2Cobalt (Co) g/L 20Pb g/L 10Cd g/L 1Total Iron (Fe2+ ; Fe3+) mg/L 0.5Hg g/L 0.3Total Manganese (Mn2+; Mn3+) mg/L 0.1Nickel (Ni) g/L 25Total Phenols g/L 5Active anionic detergents g/L 200Absorbable Organic Halides g/L 50

(Source: prepared by the study team based on Ordinance No.161/2006)

f) Noise

Noise levels at the project site boundary and at the nearest residential area (Mintia and Vetel villages) along the nationalroad were monitored in 2015 and the results are presented in Table 9-4. It can be seen that noise levels are in accordancewith the Romanian noise level standards.It can be stated that as the residential areas are located 2 to 2.5km from the project sites, there is low risk that the noisefrom the power plant reaches those areas.

Table 9-4 Noise Level within and outside the Existing Power Plants in 2015

Dailyaverage

Romanian standards IFC standardsDaytime

(07:00-22:00)Night time

(22:00-07:00)Daytime

(07:00-22:00)Night time

(22:00-07:00)At the siteboundary

(Industrial area)51.3 65 55 70 70

At the nearestresidential area 43.1 55 - 55 45

(Source: prepared by study team based on Ordinance No.152/558/1119/532/2008 and IFC EHS Guidelines)

g) Soil

9-12

Soil monitoring in the project site was conducted in 2016 and 2017. The monitoring points were chosen within theexisting power plant, in areas where a risk of potential contamination was high, such as the coal storage yard, oilreservoir, fuel discharge area, etc. The relative locations of the sampling points are shown in Figure 9-15.

The results are in accordance with the Romanian standards as shown in Table 9-5 below. It can be said that the risk ofsoil contamination is low within the project site, but a soil analysis of the defined site would be recommended beforethe development of the new project.

9-13

Figure 9-15 Relative Locations of the Soil Sampling Points

Point 1: Railway stationPoint 2: Coal storage yardPoint 3: Mintia (out of the map range)Point 4: Oil fuel dischargePoint 5: Transformer oil reservoirPoint 6: A point 800 m away from the power station site (out of the map range)Point 7: Mintia (out of the map range)Point 8: Oil fuel storage

(Source: prepared by the study team based on interview with CEH and Google Earth)

Table 9-5 Results of the Soil Monitoring in the Existing Power Plant

Parameter Unit Point1 Point 2 Point 3 Point 4 Point 5 Point 6 Point 7 Point 8 Standard

Cu mg/kg 30 63 33 46 49 84 29 21 250Zn mg/kg 118 159 112 129 145 216 105 107 700Pb mg/kg 85 71 30 42 47 65 25 29 250Ni mg/kg 32 50 27 30 41 79 13 32 200

Cd mg/kg <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 5

As mg/kg <0.1 1 <0.1 1 <0.1 3 <0.1 <0.1 25

Cr mg/kg 65 97 63 52 65 126 42 53 300Co mg/kg 10 20 8 5 6 17 6 3 100

Mn2+;Mn3+ mg/kg 731 605 695 499 585 620 730 331 2,000

SO42- mg/kg 1,943 4,201 1,132 1,949 4,199 3,804 1,058 1,452 5,000(Source: prepared by the study team based on analysis results and Ordinance No.756/1997)

h) Land Use and Social Infrastructure

3 potential locations for the project site are considered as of the development of the F/S (See Chapter 4). Between them,only one case has been studied for the environmental part of this report, Case No.3 because it is considered as the most

12

4, 5, 8

9-14

probable site.

Concerning this potential project site, part of the land is owned by the project proponent, Electrocentrale Deva, but theother part is owned by a private company, i.e. SC Energomontaj SA Bucuresti (Deva branch). Currently, the site isoccupied with brick masonry buildings and scrap metal with an actual occupied area of about 65%., but not inhabited.

The part of the land owned by Energomontaj SA Bucuresti seems not to be occupied or even used at the moment, butthe project proponent should contact the land owner and get information if the land purchase can be proceeded or not,and with which conditions.

During the Environmental and Social Impact Assessment (ESIA) preparation phase, although detailed primary data willbe collected in order to allow a thorough analysis of the potential social impacts of the project, in a preliminary analysis,these impacts are likely to be minimal. Existing infrastructure is also expected to be able to support the domestic influxof workers.

9-15

(2) Environmental Improvements arising with Project Implementation1) Air Quality Improvement

The installation of a CCPP in line with EU emission standards is the basic environmental management policy for thisproject. It will be considered that the CCPP to be newly constructed will replace the Units 5 and 6 of the existing powerplant.As an EU-country, Romania must comply with the limits established by the EU Directives as transposed into localRomanian legislation, and in particular with the BAT Conclusions as regulated in Directive 2010/1442.

Currently, in Deva Power Plant, Unit 1 is decommissioned, and Unit 3 is the only one with continuous operation. Allother units are currently available, but not operated continuously. Unit 2, Unit 5 and Unit 6 are planned to bedecommissioned in 2019 and 2020, respectively. The current operation condition of the power plant is presented inTable 9-6.

Table 9-6 Current Operation Situation in Deva Power Station (as of November 2018)

Unit Electrical output(MW)

In operation(Yes/No) Comments

1 Decommissioned Decommissioned Decommissioned

2 210 No but available foroperation To be decommissioned in 2019

3 235 YesRefurbished in 2007.To be used continuously in the future (withlimited capacity)

4 210 No but available foroperation

To be refurbishedTo be used continuously in the future(with limited capacity)




Since the project will be developed within the boundaries of the existing power plant, cumulative impacts of air pollutantrelease and their control are to be considered. However, it can be said that the decommissioning of Units 2, 5 and 6before 2020 (before or during the implementation of this project) will decrease the emissions of NOx, SOx, CO, PM10

and other air pollutants from the power plant.

Moreover, as the existing power plant is coal-fired and the new one will be gas-fired, the emission from the CCPP to benewly constructed for the same amount of energy will decrease significantly.

a) Current Air Emission Concentration

Concerning the emission of pollutants in the existing power plants, the overall situation is that most of the equipment isvery old and does not comply with current EU and national emission standards. To remedy this issue, ElectrocentraleDeva was given a period of derogation or transition period by the European Committee to improve, replace, or shutdown the existing equipment for compliance with the environmental legislation. Only Units 3 and 5 have been inoperation for the last 2 years.The current operation situation in Deva power plant is shown in Table 9-7.

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Table 9-7 Recent Air Emission Concentration in Deva Existing Power Plant

Parameter Unit2016 2017

No3 No5 No3 No5

Thermal Power output MW 1,056 1,056 1,056 1,056Fuel - Hard coal Hard coal Hard coal Hard coal

Flow rate (Wet gas) ×103 Nm3/h 355.81 289.06 288.39 327.21Flow rate (Dry gas) ×103 Nm3/h 355.81 289.06 259.62 294.84Temperature oC 160 160 160 160Stack height m 220 220 220 220Stack diameter m 30 30 30 30Exhaust gas velocity m/s 15 15 15 15

EmissionconcentrationDry gas base

SOx mg/Nm3 3,867.24 3,091.59 2,720.66 2,090.30NOx mg/Nm3 411.77 359.6 422.20 414.77PM10 mg/Nm3 220.88 323.32 271.44 -


The emission concentration is high, especially for SOx, which is around 2,000-3,800 mg/Nm3. For NOx and PM10, theamount of emitted concentrations is also significant, and a continuous operation would not be bearable in the futurefrom an environmental point of view.As the CCPP to be newly constructed will only use natural gas as a fuel and consequently will not release SOx andPM10, the following study will propose to roughly estimate the improvement of the air quality of the surroundings, byconducting a simple simulation of the NOx emission dispersion of the current unit and the hypothetical future one.

b) Emission Specification of New Equipment

I) CCPP to be newly constructedConcerning the equipment to be introduced for this project, GT manufactured in japan was selected as a representative.The GT shows not only high thermal efficiency for a simple cycle GT, but also achieves high overall plant efficiencyfor a cogeneration plant and a CCPP. For this project, the 2 on 1 configuration will be used, i.e., 2 GT, 2 HRSG and 1ST for a total output of more than 340MW.

II) Emission Specification

This GT is equipped with special low-emission burning systems which contribute to extremely low NOx emissions (30mg/Nm3@15%O2 (Oxygen)) in the exhaust gas. These levels fully comply with Romanian and EU emissions regulations.

Table 9-8 Predicted Emission Concentration against Emission Standards for a New GT

Item UnitPredictedemission

concentration

Romanianstandards

EU standardsIFC standardsYearly

average24-houraverage

NOx mg/Nm3 30* 50 10-30 15-40 51

* O2 15% equivalent, 1-hour average(Source: Prepared by the study team based on Law No.278/2013, Decision 2017/1442/EU and IFC EHS Guidelines)

III) Consideration of the Downwash

The presence of the existing turbine building next to the project site could lead to the formation of downwash when theplume is exhausted.

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This is expected to occur when the two conditions below are met.- H < HB + 1.5Lwith H: the stack height

HB: Height of the nearby building at the base of the stackL: width of the building

(Source: Good Engineering, Practice Stack, Height (Environmental Protection Agency (EPA))

- The wind direction blows principally from the exhaust stack towards the nearest building

According to the baseline survey, it appears that the wind in the region blows principally from the North-West/Westdirection, which coincides with the direction from the stack toward the nearest building. Therefore, the height of thestack must be evaluated.

Figure 9-18 View of the Building Adjacent to the Project Site

(Source: Photo by the study team)

In this case, the adjacent existing building has a height of approximately 50m, and a width of 20m.It means that the stack height is to be taller than 50+20*1.5 = 80 m at least to avoid the risk of downwash.

In the following prediction, the stack height of the new power plant was chosen at 80m.

c) Simulation Theory

The prediction regarding the dispersion of air pollutant is approached by mathematical models in conformity to the timescale of the environmental standard in EU and Romania.The model regarding dispersion of air pollutant is shown in the following formula (Gaussian model).

(Source: Lecture of Air Environment Prediction, Shinichi Okamoto, 2001)

6

2z

2

2z

2

2z

2

zy

P 102

(z He)exp

2

(z He)exp

2exp

2z)y,(x, ×

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C: Ground concentration at a point R (m) below the downwind axisQp: Emission volume (g/s)

y: Parameter in the horizontal direction (m)z: Parameter in the vertical direction (m)

U: Wind speed (m/s)R: Horizontal distance between emission source and calculated point (m)z: Ground heightHe: Effective stack height (m)

He H+ HH: Stack height (m)

H: Emission gas elevation height (m): following CONCAWE formula

H 0.175 QH1/2u 3/4QH: Exhaust heat (cal/s)u: Wind speed at the top of stack (m/s)

QH * Q * Cp * T: Emission gas density at 0°C (cal/s) (1.293×103g/m3)

Q: Amount of exhaust gas per unit time (Nm3/sCp: Constant pressure specific heat (0.24cal/K/g)

T: Difference between emission gas temperature and atmospheric temperature (K)

Calculation is performed based on the atmospheric stability and wind speed around the stack outlet, according to thePasquill atmospheric stability classes. The classification consists in separating the atmospheric turbulence into sixstability classes named A, B, C, D, E and F with class A being the most unstable or most turbulent class, and class F themost stable or least turbulent class.

In unstable atmospheric conditions, air pollutant particles tend to stagnate around the stack outlet whereas in stableconditions, particles will tend to disperse well in the atmosphere, decreasing the concentration in air. Therefore, theconcentration will be higher for Class A than for Class F.

The stability depends on the solar radiation amount and wind speed. According to the meteorological data in Deva, thewind speed on average is in the range of 1 – 4 m/s and the annual radiation amount is 1,100kWh/m2, (0.13 kW/m2)5 ina year, corresponding to class B – C. To prepare for the worst-case scenario, the simulation will be conducted for themost unstable class, class B, and for the wind speeds shown in Table 9-9.

Table 9-9 The Condition of the Stability and Wind SpeedStability Class Wind speed at ground level (m/s)Unstable B 1, 1.5, 2, 2.5, 3, 3.5, 4


d) Simulation Result – Dispersion from 1 Unit

Table 9-10 shows the exhaust volume, temperature, speed, and emissions of NOx emitted from the stack for the newpower plant, predicted for winter time when the emission concentration is higher, as a worst-case scenario.

Table 9-10 Emission Specification

Parameter Unit Value

Type - “Combined Cycle”Electrical output MWe 373.857

5 https://solargis.com/maps-and-gis-data/download/romania/

https://solargis.com/maps-and-gis-data/download/romania/

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Parameter Unit Value

Heat output (if any) Gcal/hr 25.795Efficiency % 61.28Emission volume (wet) Nm3/h 903,000Emission volume (dry) Nm3/h 832,000Exhaust temperature ºC 70Stack height m 80Stack inner diameter m 5NOx emission concentration (dry base) mg/Nm3 30NOx emission volume (dry base) kg/h 25


The variation of NO2 predicted hourly concentration according to the distance from the emission source is shown in theFigure below. The maximum NO2 concentration at ground level is 4.14 µg/m3, where wind speed is 1 m/s withatmospheric stability B. This concentration is extremely small (2%) compared to the Romanian and EU standards (200µg/m3).

Figure 9-19 Predicted NO2 Hourly Concentration According to the Distance from Emission Source for the CCPP to benewly constructed


e) Simulation Result – Comparison between Baseline and Future Scenario

In this comparative study, it will be considered that as a baseline scenario, Units 3, 4, 5 and 6 are in operation and as afuture scenario, the CCPP to be newly constructed replacing Units 5 and 6 will be in operation in addition to Units 3and 4 still in operation.

The emission data of Unit 4 and Unit 6 will be calculated based on the emissions from Unit 3 and Unit 5 respectivelyby adjusting the power output. The base data used to determine the equivalence between those Units is shown in theTable below.

0.00.51.01.52.02.53.03.54.04.5

0 2000 4000 6000 8000 10000

g/m

3

distance from source (m)

NO2-Stability B

1m/s1.5m/s2m/s2.5m/s3m/s3.5m/s4m/s

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Table 9-11 Data to Determine the Equivalence between Unit 3 and 4 and Unit 5 and 6, Respectively

Unit 3 Unit 4 Unit 5 Unit 6

Electrical output (MW) 235 210 210 210Equivalency with Unit 3 1 0.89 - -Equivalency with Unit 5 - - 1 1


When comparing the output of Unit 3 and 4 and Unit 5 and 6 respectively, it turns out that the output of Unit 4 isequivalent to 0.89 times the output of Unit 3 and the output of Unit 6 is equivalent to the output of Unit 5. As the Outputsof all Units are close, they will be considered as equivalent in the following part to simplify the calculations.Therefore, the Block Unit 3 & 4 will be considered equivalent to 2×Units 3 and the Block Unit 5&6 will be consideredequivalent to 2×Units 5.

The comparison of the emission specification is detailed in the Table below.

Table 9-12 Comparison of the Emission Specification between Baseline and Future Scenario

Item Unit Baseline scenario Future scenario

System - Unit 3&4 Unit 5&6 Units 3&4 NewEquivalent - 2×Unit 3 2×Unit 5 2×Unit 3 -Electrical output MW 470 420 470 374 *

Emission volume (wet) Nm3/h 2×288,390 2×327,210 2×288,390 903,000Exhaust temperature ºC 160 160 160 70Stack height m 220 220 220 80NOx emission mg/Nm3 2×422.20 2×414.77 2×422.20 30NOx emission kg/s 2×0.067 2×0.075 2×0.067 0.0069

* rounded up to the next unit(Source: prepared by the study team)

The simulation was realized supposing that the stack of Block 3&4 and the stack of Block 5&6 were spaced by about80m, and the same hypothesis was chosen for the distance from Block 3&4 and the CCPP to be newly constructed. Therespective positions of those blocks are indicated in the Figure below.As the wind blows mainly from West to East on the project site, the stack of Unit 3&4 was taken as the emission originof the simulation of the baseline prediction. The stack of the CCPP to be newly constructed was taken as the emissionorigin of the future scenario prediction because it is further west than the stack of Unit 3&4.

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Figure 9-20 Relative Position of the Existing and Future Power Plants in the Simulation


I) Baseline ScenarioThe variation of NO2 predicted hourly concentration according to the distance from the emission source for the baselinescenario (Unit 3, 4, 5 and 6 all together) is shown in the Figure below. The maximum concentration of NOx at groundlevel is obtained at the wind speed of 1 m/s with atmospheric stability B, where the concentration is 63.1 µg/m3,corresponding to approximately 32% of the EU and Romanian environmental quality standards (200 µg/m3).

Figure 9-16 Predicted NO2 Hourly Concentration According to the Distance from Emission Source for the BaselineScenario


II) Future ScenarioThe variation of NO2 predicted hourly concentration according to the distance from the emission source for the baselinescenario is shown in the Figure below. The maximum concentration at the ground level of NOx is highest at the windspeed of 1 m/s with atmospheric stability B, where the concentration is 34.2 µg/m3, corresponding to approximately17% of the EU and Romanian environmental quality standards (200 µg/m3). It can be noted that as expected, thecontribution of the CCPP to be newly constructed is smaller than the existing Units, and the maximum concentration ofpollutant in the future scenario is 46% lower than in the baseline scenario. Moreover, the decrease could be moresignificant if some technical improvement is brought in the future for Units 3&4 to reduce the emission from thoseUnits.

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

0 2000 4000 6000 8000 10000

g/m

3


NO2-Stability B


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Figure 9-17 Predicted NO2 Hourly Concentration According to the Distance from Emission Source for the FutureScenario


2) CO2 Emissions Reduction

It is predicted that the proposed power plant will have higher generation efficiency than the existing power plantand will contribute to a reduction of CO2 emissions – the likely reduction in CO2 emissions has been calculated asexplained below.

a) Calculation Method

The expected reduction amount of CO2 emissions amount was calculated according to the following equation.ERy = BEy - PEy

with:ERy: CO2 yearly emission reduction due to the project implementation (t-CO2/y)BEy : CO2 baseline yearly emission (t-CO2/y)PEy : CO2 yearly emission from the new power plant (t-CO2/y)

BEy and PEy are defined according to the equations below.

BEy = EGBLy x EFBLy

with:EGBLy: Yearly electricity production (MWh/y)EFBLy: CO2 emissions factor (t-CO2/MWh)

PEy = EGPJy x EFPJy

with:EGPJy: Yearly electricity production (MWh/y).EFPJy: CO2 emissions factor (t-CO2/MWh)

0.05.0

10.015.020.025.030.035.040.0

0 2000 4000 6000 8000 10000

g/m

3


NO2-StabilityB


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It will be considered that the future yearly electricity production amount (EGPJy) is equal to the current electricityproduction (EGBLy), to facilitate the comparison study.

This gives the following equation.ERy = EGBLy x (EFBLy – EFPJy)

b) Calculation Conditions

In the existing power plant, CO2 emission is monitored and the power plant released 862,965 tCO2 to produce885,122 MWh and 141,148Gcal in 2017. The emission factor for the baseline can be then determined (Table 9-13).

Table 9-13 Calculation of the Emission Factor of the Existing Power Plant (the Data in 2017)Item Unit Value Comment

Electrical output MWh 885,122

Thermal output Gcal 121,366 1MWh = 0.860 GcalEq. to 141,149 MWh

Yearly thermal production (net)(EGBLy) MWh 1,026,271 Electrical + Thermal

outputCO2 emission amount (BEy) tCO2 862,965CO2 emissions factor (EFBLy) tCO2/MWh 0.841 Calculated *

* EFBLy = BEy / EGBLy


For the new power plant, the CO2 emission factor (EFPJy) was determined according to a set of data related to theelectricity generation of new equipment, efficiency, the fuel heat value and carbon content, as presented in thetable below (annual average). Data related to the fuel specification was provided by the existing power plant (Table9-14).

Table 9-14 Data Used for the Calculation of CO2 Emission Factor for the New Power PlantItem Unit Value Comment

Low Heat Value (LHV) kJ/kg 49,508Fuel carbon content rate (C%) mass% 74.26Fuel CO2 emission factor (COEFi) tCO2/TJ*** 54.96 Calculated*

Gross thermal efficiency ( PJy) % 58.32****

CO2 emission factor (EFPJy) tCO2/MWh 0.339 Calculated**

* COEFi = (C%/100) / LHV x (44.01/12.011) x 106

** EFPJ,y={COEFi / ( PJy / 100)} x 0.0036*** TeraJoule (TJ)**** Overall efficiency at rated load considering annual average heat supply of 16 MW

(Source: prepared by the study team)Finally, the emission reduction amount could be calculated as follows (Table 9-15).

Table 9-15 Calculation of the CO2 Emission ReductionItem Unit Value

Yearly thermal production (EGBLy) MWh 1,026,271

Baseline CO2 emissions factor (EFBLy) tCO2/MWh 0.841

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Item Unit ValueFuture CO2 emission factor (EFPJy) tCO2/MWh 0.339

Emission reduction amount (ERy) tCO2 515,188(Source: prepared by the study team)

The implementation of this project will enable to reduce the CO2 emission amount of 515,188 tCO2/y, whichrepresents an annual emission reduction of approximately 60% (rounded up to the next whole number).

3) Water Effluent

The wastewater effluent data for the existing power plant are shown in Table 9-16. The current power plant complieswith the Romanian effluent standards.

Table 9-16 Wastewater Effluent Data of the Existing Power Plant

Parameter Unit Monitoring results (2017) Romanianstandards

IFC standards1 2 3

Temperaturedifference*( T)

°C 10 10 10 35 °C afterdischarge

+3°C aboveambient watertemperature

pH - 8.31 7.715 7.695 6.5-8.5 6-9Total Suspendedsolids (TSS)

mg/L 11.6 16.4 17 35.0 50

BOD5 mg O2/L - 12.3 - 20 30COD(c) mg O2/L < 30 < 30 - 70 125Total Nitrogen mg/L - 0.6508 - 10 10PO4- mg/L - - - 1.0 2Oil mg/L - - - 5.0 10As mg/L 0.01 0.01 0.01 0.1 0.5Cd mg/L 0.025 0.025 0.025 0.2 0.1Cu mg/L - - - 0.1 0.5Ni mg/L - - - 0.5 -Zn mg/L 0.02 0.02 0.02 0.5 1.0Pb mg/L 0.004 0.004 0.004 0.2 0.5Hg mg/L 0.01 0.01 0.01 0.05 0.005Mn2+; Mn3+ mg/L 0.01 0.01 0.01 Total Mn 1.0 -Total coliform MNP/100mL - - - 400 400Cr mg/L < 0.005 0.02 < 0.005 Total 1.0 0.5Mg2+ mg/L 18.045 8.12 13.978 100.0 -Ca2+ mg/L 106.313 44.29 39.478 300.0 -Fe2+ ; Fe3+ mg/L 0.0633 0.0046 0.0481 5.0 1.0SO42- mg/L 210 50.41 49.8 600.0 -Cl- mg/L 70.905 72.879 48.172 500.0 -

*Temperature difference between the intake and discharge outlet(Source: prepared by the study team based on NTPA -001/002 and IFC EHS Guidelines)

Also, it has been reported that the water amount in the Mures River is sometimes not sufficient for use in the powerplants. Currently, about 27,000 m3/h of water is drawn from the river for each unit in operation as cooling water. Thenew plant is expected to use about 29,000 m3/h, and as this new unit is planned to substitute Units 5&6 of the existingpower plant, the reduction of water consumption of 25,000m3/h is expected.

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Moreover, to lower the impacts of the water use, 3 cooling water paths have been used for the existing power plant. Byutilizing this design to the new project, the impacts on Mures River use due to the water intake is expected to decrease.

Within the scope of the EIA procedure, the project proponent will have to obtain a water use permit.

Concerning the thermal discharges, the existing plants discharge thermal effluents 10°C warmer than at the intake point.On the other hand, the new power plant will discharge the thermal effluents 7°C warmer, having a lower impact thanthe exiting power plants on the surrounding water environment.

According to the Romanian legislation, the concentration of chemical and biochemical substances in water dischargesis limited by the local water protection agency for each power plant. One of the requirements is to release the waterdischarges with a lower concentration of the substances than at the intake. It is then recommended that before the projectdevelopment, the project proponent get the information about the applicable water discharge standards and takemeasures to comply with them.

4) Waste Generation and Processing

Waste in the existing power plant is properly processed in accordance with Romanian legislation6. As seen in Table 9-17, hazardous waste is either managed onsite or disposed by a specialized company. Coal ash is permanently stored inthe power plant site and coal ash is permanently stored in the power plant site and fly ash is processed outside of thepower plant after mixing it with water and gypsum in a dense slurry system to avoid flying and dispersion.

Table 9-17 Waste Generated in the Existing Power Plant and its Process Method

Classificationof waste Description of waste Content

Disposal method(Recycled by 3rd party, disposed of in

an authorized landfill, etc.)

Non-hazardouswaste

Ash and slag Bottom ash, slag andboiler coal powder Permanent storage onsite

Flying ash from coalburning Flying ash from landfill Disposed outside of the power plant,

in a dense slurry systemScrapings and iron swarf Iron Onsite disposal

Construction materials Construction materials(bricks) Onsite disposal

Wood Wood Onsite disposalCopper, bronze, brass Copper, bronze, brass Onsite disposalAluminium Aluminium Onsite disposalIron and steel Iron and steel Onsite disposalCopper, aluminiuminsulation cables

Copper, aluminiuminsulation cables Onsite disposal

Mineral wool Mineral wool Disposed by specialized companiesPaper and cardboards Paper and cardboards Onsite disposalHousehold waste Household waste Disposed by specialized companies

Hazardouswaste

Non-chlorinated mineraloils from transmissionand lubrication engines

Oil Onsite disposal

Turbine oil Oil Onsite disposalTransformer oil Oil Onsite disposalGlass/plastic waste Glass/plastic waste Disposed by specialized companiesOil-soaked cloths Oil-soaked cloths Disposed by specialized companiesLead batteries Batteries Disposed by specialized companiesAsbestos Asbestos Disposed by specialized companies

6 More details regarding the Romanian legislation on Waste is presented in the chapter “Overview of Romanian legalstandards and requirements”.

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Classificationof waste Description of waste Content

Disposal method(Recycled by 3rd party, disposed of in

an authorized landfill, etc.)EEE* with dangerouscompounds Lighting fixtures, bulbs Disposed by specialized companies

EEE with dangerouscompounds Electronic components Disposed by specialized companies

* Electrical and Electronic Equipment: EEE(Source: prepared by the study team)

As the new equipment will be operated only with natural gas, it is expected that the waste amount will be reducedsignificantly, in particular concerning the bottom ash, flying ash and coal powders, reducing the risks of soil,underground water and air pollution.

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(3) Summary of the Preliminary Assessment of the Potential Environmentaland Social Impacts of the Project (JBIC Checklist for Thermal Power Plants)The answers to the JBIC Checklist below are applicable to all equipment described at this stage in the project. It maybe necessary to revise the content below upon consultation with the client after more details regarding the final designfor each equipment are defined.

Main Check Items Potentialimpact/benefit

Environmental and Social considerationsand appropriate mitigating or controlmeasures

1. Permits and Approvals, Explanation(1) ESIA and Environmental Permits1) Have ESIA reports been officially completed?Have ESIA reports been written in the officiallanguage or a language widely used in the hostcountry?2) Have ESIA reports been approved by thegovernment of the host country?3) Have ESIA reports been unconditionallyapproved? If conditions are imposed on theapproval of ESIA reports, are the conditionssatisfied?4) In addition to the above approvals, have otherrequired environmental permits been obtained fromthe appropriate regulatory authorities of the hostcountry’s government?

Notapplicable

According to Romanian law, a full ESIAwould be required for the development of thenew plant because it is a thermal power plantproject with the output of 300MW or more.A water use permit is to be obtained withinthe scope of the ESIA.

The ESIA will be prepared by certifiedenvironmental consultants hired by theproject developer.

(2) Explanations to the Public1) Is the project accepted in a manner that is sociallyappropriate to the country and locality throughoutthe preparation and implementation stages of theproject based on sufficient consultations withstakeholders, such as local residents, conducted viadisclosure of project information and potentialimpacts?2) Are the records of such consultations with thestakeholders, such as local residents, prepared?3) Are the written materials for the disclosureprepared in a language and form understandable tothe local residents?4) Are ESIA reports available at all times for perusalby stakeholder such as local residents, and copyingof the reports permitted?5) Are proper responses made to comments from thepublic and regulatory authorities?

Notapplicable

Stakeholders meetings will be conductedaccording to the ESIA regulation inRomania, which require at least one publicconsultation (during EIA draft stage).Opinions from local residents and interestedparties will be appropriately collected duringthe meetings.

Written material and the draft ESIA reportwill be made available for perusal andcomment by the public according toRomanian regulation. After their commentsare reflected in the final version of the ESIA,the ESIA will be evaluated by theEnvironmental Agency of Hunedoara.

2. Anti-pollution Measures(1) Air Quality1) Do air pollutants, such as SOx, NOx, and soot anddust emitted by the power plant operations complywith the host country’s emission standards?

Small The Implementing entity will employ state-of-the-art gas combustion technologies (GT)that are compliant with EU emissionsstandards. Therefore, not only will the plantbe compliant with EU regulations, it will alsosubstantially reduce the emission of airpollutants to the environment as compared tothe current equipment in the existing power

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Environmental and Social considerationsand appropriate mitigating or controlmeasuresplant.

2) Are adequate measures taken to prevent airpollution by coal dust scattering from coal storageand coal transport equipment, dust from the coal ashdisposal sites, in the case of CFPP?

Notapplicable

Not applicable to this project concerning thedevelopment of a GFPP.

3) Is there a possibility that air pollutants emittedfrom the project will cause areas that do not complywith the host country’s ambient air qualitystandards?

Small The project’s ESIA will conduct necessaryair pollutant simulations and monitoringconsidering the final equipment distributionwithin each plant in order to evaluate theimpacts on the surrounding airshed.

4) Are adequate measures taken to reduceGreenhouse Gas (GHG) emissions from the project?

Small This project will employ highly efficient gascombustion technologies which, in general,have the potential to largely reduce GHGemissions in comparison with conventionaltechnologies. As an extension to this, GHGemissions are expected to be significantlyreduced with the introduction of the newequipment, as compared to currentcombustion equipment.

(2) Water Quality1) Do effluents including thermal effluents from thepower plant comply with the host country's effluentstandards?

Small Thermal effluents will comply withRomanian wastewater discharge standards,and the temperature of the effluent isexpected to be lower than in the existingplant.

2) In the case of CFPP, do leachates from coal pilesand coal ash disposal sites comply with the hostcountry's effluent standards?

Notapplicable


3) Does the quality of sanitary wastewater andstormwater comply with the host country's effluentstandards?

Small All wastewater will be treated in thewastewater treatment plant within the projectsite and be discharged into the municipalsewerage network within the limits ofRomanian regulations.

4) Are adequate measures taken to preventcontamination of surface water and groundwater bythese effluents? Is there a possibility that theeffluents from the project will cause areas that do notcomply with the host country’s ambient waterquality standards?

Negligible The project equipment will be completelyleveled and paved. It will be surrounded by astorm water collection system, as well asisolated areas where potentially hazardouschemicals and other materials are stored. Nountreated wastewater will be released fromthe equipment.

(3) Waste1) Are wastes, (such as waste oil, and wastechemical agents), coal ash, and by-product gypsumfrom flue gas desulfurization generated by the powerplant operations properly treated and disposed of inaccordance with the laws and regulations of the hostcountry?

Small The plant operator appropriately processesand dispose of wastes in accordance with thelaws of Romania. The amount of wastesubject to laws and regulations is smallbecause the new power plant of this projectis a CCPP.

(4) Soil Contamination1) Has the soil at the project site been contaminatedin the past, and are adequate measures taken toprevent soil contamination?

Small According to recent soil monitoring results,no soil contamination is observed in theproject site. Adequate measures such as good

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Environmental and Social considerationsand appropriate mitigating or controlmeasuresoil storage management will be taken toprevent soil contamination during operation.

(5) Noise and Vibration1) Do noise and vibrations from the operationcomply with the country’s standards?

Small Studies of noise and vibration are thoroughlyconducted in all equipment at the moment,with no major issues regarding standardcompliance. New studies will be conductedduring the ESIA preparation phase due to theintroduction of the new equipment.However, as there is no settlement near theproject site, noise will not be an importantsource of impact. Noise levels will bemaintained within the limits established inRomanian legislation.

2) For CFPP, will the coal unloader, storage andtransportation equipment be designed to minimizenoise impacts?

Notapplicable


(6) Subsidence1) In the case of withdrawal of a large volume ofgroundwater, is there a possibility that it will causesubsidence?

Notapplicable

No groundwater will be withdrawn as relatedto this project.

(7) Odor1) Are there any odor sources? Are adequate odorcontrol measures taken?

Negligible No substantial odor sources are expected.

3. Natural Environment(1) Protected Areas1) Is the project site located in protected areasdesignated by the host country’s laws orinternational treaties etc.? Is there a possibility thatthe project will significantly affect the protectedareas?

Negligible In this project, serious impact on protectedareas is not expected since environmentalimpact can be reduced by conversion fromexisting CFPP to CCPP.

(2) Ecosystem and Biota1) Does the project cause significant conversion orsignificant degradation of forests with importantecologically value (including primary forests andnatural forests in tropical areas) and habitats withimportant ecological value (including coral reefs,mangrove wetlands and tidal flats)?

Negligible The project site was already developed bythe land owner. Practically no vegetationclearing will be necessary.

2) In case the projects involve the significantconversion or degradation of natural habitatsincluding natural forests, is the avoidance ofimpacted considered preferentially? If the impactsare unavoidable, will the appropriate mitigationmeasures be taken?

Negligible No “significant conversion or degradation ofnatural habitats” is expected.

3) Will the evaluation of the impacts on naturalhabitats by the project and consideration for theoffset measures be carried out based on expertopinion?

Negligible No impact is expected because the projectsite was already developed by the landowner. It will be professionally evaluated byenvironmental consultants in ESIA.

4) Is the illegal logging of the forest avoided? Notapplicable

Not applicable to this project because theproject site was already developed by the

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Environmental and Social considerationsand appropriate mitigating or controlmeasuresland owner.

5) Does the project site encompass the protectedhabitats of endangered species designated by thehost country's laws or international treaties etc.?

Notapplicable

No protected or endangered species have sofar been identified.

6) Is there a possibility that the amount of water (e.g.surface water, groundwater) used by the project willadversely affect aquatic environments such as rivers,in the case of development in the land area? Areadequate measures taken to reduce the impacts onaquatic environments, such as aquatic organisms?

Small The cooling water will be intake from thenearby river and discharged to it in thisproject. 3 different intake water cycle routesare to be applied due to the diversion ofexisting equipment, and therefore minimizethe impacts on aquatic environments.Monitoring of the water quality and effluentdischarge will be conducted to verify theproject does not harm aquatic environment.

7) Is there a possibility that discharge of thermaleffluents, intake of a large volume of cooling wateror discharge of leachates will adversely affect theecosystem of surrounding water areas?

Small Thermal effluents will be dischargedaccording to several water intake scenarios,but the discharge temperature will meet theRomanian standards. Monitoring of thewater quality and effluent discharge will beconducted to verify the project does not harmaquatic environment.

8) If any adverse impacts on ecosystem arepredicted, are adequate measures taken to reduce theimpacts on ecosystem?

Notapplicable

At the moment, no adverse impacts onparticular ecosystems are expected.

(3) Topography and Geology1) Is there a possibility that the installation ofstructures will cause a large-scale alteration oftopographic features and geological structures inand around the project site?

Small The project site was already developed.Therefore, some leveling and excavationwork will be necessary to initiateconstruction work, but a large-scalealteration of topographic features is notexpected.

4. Social Environment(1) Resettlement1) Are involuntary resettlement and loss of means oflivelihoods avoidable by project implementation?If unavoidable, are efforts made to minimize theimpacts caused by the resettlement and loss ofmeans of livelihoods?

Notapplicable

The project site is already developed andowned by a private company. No landacquisition or compensation is expected tobe necessary.

2) Are the people affected by the project providedwith adequate compensation and supports toimprove their standard of living, incomeopportunities, and production levels or at least torestore them to pre-project levels? Also, is priorcompensation at full replacement cost provided asmuch as possible?

Notapplicable

Ditto

3) Is the participation of the people affected and theircommunities promoted in planning,implementation, and monitoring of involuntaryresettlement action plans and measures against theloss of their means of livelihood? In addition, willappropriate and accessible grievance mechanismsbe established for the people affected and theircommunities?

Notapplicable

Ditto

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4) Is the resettlement action plan (includinglivelihood restoration plan as needed) prepared anddisclosed to the public for the project which willresults in a large-scale resettlement or large-scaleloss of means of livelihood? Does the resettlementaction plan include elements required in the standardof the international financial institutionbenchmarked in its environmental reviews?

Notapplicable

Ditto

5) In preparing a resettlement action plan, isconsultation made with the affected people and theircommunities based on sufficient information madeavailable to them in advance and is explanationsgiven in a form, manner, and language that areunderstandable to the affected people?

Notapplicable

Ditto

6) Has appropriate consideration been given tovulnerable social groups, such as women, children,the elderly, the poor, and ethnic minorities in theresettlement action plan?

Notapplicable

Ditto

7) Are agreements with the affected people obtainedprior to the resettlement?

Notapplicable

Ditto

8) Is the organizational framework established toproperly implement resettlement? Are the capacityand budget secured to implement the resettlementaction plan?

Notapplicable

Ditto

9) Is a plan developed to monitor the impacts ofresettlement?

Notapplicable

Ditto

(2) Living and Livelihood1) Is there a possibility that the project will adverselyaffect the living conditions of inhabitants? Areadequate measures considered to reduce theimpacts, if necessary?

Small It is expected that the creation ofemployment opportunities and activeutilization of local labor force will be takento secure labor power associated with theproject.It is beneficial to the city’s economy.

2) Are sufficient infrastructures (e.g. hospitals,schools, roads) available for projectimplementation? If existing infrastructure isinsufficient, are plans developed to construct newinfrastructures or improve existing infrastructures?

Negligible Local infrastructures are thought to besufficient to receive workers because a newpower plant is built in the site of the existingpower plant.

3) Is there a possibility that large vehicle trafficassociated with the project will cause impacts onroad traffic in the surrounding areas? Are adequatemeasures considered to reduce the impacts ontraffic, if necessary?

Small Transportation of equipment into theequipment may increase local traffic. It maybe necessary to consider publicizing to localresidents, considering measures againsttraffic accidents and installation oftemporary road signs to organize the trafficof lorries and local cars in order to mitigatethe increase of traffic impacts.

4) Is there a possibility that the amount of water used(including surface water, groundwater) anddischarge of thermal effluents by the project willadversely affect existing water uses and uses ofwater areas (especially fishing)?

Small The cooling water will be intake from thenearby river and discharged to it in thisproject. 3 different intake water cycle routesare to be applied due to the diversion ofexisting equipment, and therefore minimizethe impacts on aquatic environments. It is

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Environmental and Social considerationsand appropriate mitigating or controlmeasuresrecommended that the project proponentimplement a grievance mechanism so thatpotential water users and local inhabitantscould raise their comments.

5) Has appropriate consideration been given tovulnerable social groups, such as women, children,the elderly, the poor, ethnic minorities andindigenous peoples?

Negligible Not applicable to this project because theproject site was already developed.

(3) Heritage1) Is there a possibility that the project will damagethe local archeological, historical, cultural, andreligious heritage sites? Are adequate measuresconsidered to protect these sites in accordance withthe host country’s laws?

Negligible -Small

No artifacts or site with historical andarchaeological importance is expected at thesites. The project developer will establish theprocedure, according to Romanian law, inorder to determine the steps to be taken if anyobject or site of target is spotted duringconstruction work.

(4) Landscape1) Is there a possibility that the project will adverselyaffect the local landscape? Are necessary measurestaken?

Negligible The sites are located in urban environmentswith low aesthetic interest, so no substantiallandscape impacts are expected.

(5) Ethnic Minorities and Indigenous Peoples1) Are the impacts to ethnic minorities andindigenous peoples avoidable by projectimplementation? If unavoidable, are efforts madeto minimize the impacts and to compensate for theirlosses?

Notapplicable

No ethnic minorities or indigenous peopleare predicted in the areas.

2) If the project has adverse impacts on indigenouspeoples' various rights in relation to land andresources, is such rights respected?

Notapplicable

Ditto

3) Is the indigenous peoples plan prepared and madepublic? Does the indigenous peoples plan includeelements required in the standard of the internationalfinancial institution benchmarked in itsenvironmental reviews?

Notapplicable

Ditto

4) In preparing the indigenous peoples plan, isconsultation made with the affected ethnicminorities and indigenous peoples based onsufficient information made available to them inadvance and are explanations given in a form,manner, and language that are understandable tothem?

Notapplicable

Ditto

5) Are the free, prior, and informed consents of theindigenous peoples obtained?

Notapplicable

Ditto

(6) Working Conditions (including occupational safety)1) Is the project proponent not violating any lawsand regulations associated with the workingconditions of the host country which the projectproponent should observe in the project?

Negligible Project operators will implement the projectin compliance with Romanian laws.in regardto

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2) Are tangible safety considerations in place forindividuals involved in the project, such as theinstallation of safety equipment which preventsindustrial accidents, and management of hazardousmaterials?

Negligible in regard toDitto

3) Are intangible measures being planned andimplemented for individuals involved in the project,such as the establishment of a safety and healthprogram, and safety training (including traffic safetyand public sanitation) for workers etc.?

Negligible in regard toDitto

(7) Community Health, Safety and Security1) Is there a possibility that diseases, includingcommunicable diseases, such as HIV will beintroduced due to immigration of workers associatedwith the project? Are adequate considerations givento public health, if necessary?

Negligible Health campaigns and trainings with workerswill be conducted as a way to prevent thespread of communicable diseases, accordingto Romanian regulations.

2) Are appropriate measures being taken to ensurethat security guards involved in the project do notviolate safety of other individuals involved, or localresidents?

Negligible Romanian laws and regulations will be fullycomplied in regard to security personnel.Security guards will control the entrance ofthe site.

5. Other(1) Impacts during Construction1) Are adequate measures considered to reduceimpacts during construction (e.g. noise, vibrations,turbid water, dust, exhaust gases, and wastes)?

Small - Large The following mitigation measuresconsidering the influence on the partiescould be suggested:

Noise: noise-proofing walls, PersonalProtective Equipment for workers.Vibration: construction according toRomanian legislation.Turbid water: collection channels forwastewater and treatment.Exhaust gases: traffic managementdeveloped and implemented.Wastes: isolated areas, selection of adequatedisposal at authorized equipment.

2) If construction activities adversely affect thenatural environment (ecosystem), are adequatemeasures considered to reduce impacts?

Negligible Construction activities are not expected tocause large impact to the naturalenvironment, as they will be concentrated inalready developed areas.

3) If construction activities adversely affect thesocial environment, are adequate measuresconsidered to reduce impacts?

Negligible Construction activities are not expected tosubstantially affect the social environment asthere is no housing in the surrounding area ofthe project site.

(2) Accident Prevention Measures1) Are adequate accident prevention plans andmitigation measures developed to cover both the softand hard aspects of the project, such asestablishment of safety rules, installation ofprevention equipment and equipment, and safetyeducation for workers? Are adequate measures foremergency response to accidental eventsconsidered?

Small The compliance with legislation regardingaccident prevention and specific plansdevelop is required, such as training forworkers regarding safety, installation of fire-extinguishers and correlated equipment,installation of sprinklers, preparation ofemergency response plans.

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2) For coal-fired projects, are adequate preventionmeasures taken against the spontaneous combustionof the coal storage?

Notapplicable


(3) Monitoring1) Are the monitoring programs and environmentalmanagement plans of the project prepared?

Small The monitoring plan has to be preparedduring the ESIA preparation phase thatincludes air emissions/air quality,effluent/water quality and noise monitoring.These results are to be periodically submittedto environmental authorities according toRomanian regulations.

2) Are the items, methods and frequencies includedin the monitoring program judged to be appropriate?

Small The adequacy of the monitoring plans will beevaluated for their technical adequacy andcompliance with Romanian legislation.

3) Does the proponent establish an adequatemonitoring framework (organization, personnel,equipment, and adequate budget to sustain themonitoring framework)?

Small Monitoring teams is to be establishedaccording to the environmental managementplans.

4) Are any regulatory requirements pertaining to themonitoring report system identified, such as theformat and frequency of reports from the proponentto the regulatory authorities?

Small In Romania, environmental monitoringreports have a specific format and will haveto be submitted in a periodicity defined bythe Environmental Agency.

5) Are the results of monitoring planned to bedisclosed to the stakeholders of the project?

Small The disclosure of monitoring reports has tofollow local Romanian legislation.

6) Is there a processing mechanism in place, forsolving problems related to environmental andsocial considerations pointed out by third parties?

Small It is suggested that a Grievance Mechanismprocedure will be established as a channel toreceive input from third parties regarding theproject.

6. Notes(1) Reference to Checklists of Other Sectors1) Where necessary, pertinent items described in thePower Transmission and Distribution Lineschecklist should also be checked (e.g. projectsincluding installation of electric transmission linesand/or electric distribution equipment).

Negligible -Small

At the current project phase, no additionalinstallation is planned to be developed.However, it is possible that a new gaspipeline will be developed within the scopeof the project. In this case, conformity withadditional checklist may have to be applied.

2) Where necessary, pertinent items described in thePorts and Harbors checklist should also be checked(e.g. projects including construction of port andharbor equipment).

Notapplicable

Not within the scope of this project.

(2) Notes on Using Environmental Checklists1) In the case of CFPP, the following items shouldbe confirmed:- Are coal quality standards established?- Are the electric generation equipment planned byconsidering coal quality?

Notapplicable


2) If necessary, the impacts to transboundary orglobal issues should be confirmed (including theproject includes factors that may cause problems,such as transboundary waste treatment, acid rain,destruction of the ozone layer, and global warming).

Negligible This project is aimed at reducingenvironmental load such as the reduction ofGHG exhausted from the existing powerplant, and it is planned to utilize high-efficiency CCPP. Therefore, the project is not

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Environmental and Social considerationsand appropriate mitigating or controlmeasuresexpected to cause or contribute totransboundary or global environmentalissues.

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(4) Overview of Romanian Environmental Legal Standards andRequirements

The MOE and Sustainable Development of Romania was established in 2007, under Law HG No. 368/2007, whichestablishes its organization and functioning.

Under the subordination of the MOE and Sustainable Development, the Agentia Nationala pentru Protectia Mediului(National Environmental Protection Agency: ANPM) is a specialized body of the central public administration whichhas the competence to implement environmental policies and legislation.

ANPM has the following responsibilities:- Coordinate all environmental-related activities to implement strategies and policies at national, regional and local

levels;- Be the competent authority in approving activities with an impact on the environment;- Monitor the status of implementation of Romania's commitments under the implementation plans negotiated with

the European Committee during the accession period;

ANPM is supported by the Agen ii Regionale sau Provincii Autonome pentru Protec ia Mediului (RegionalEnvironmental Protection Agencies: ARPA) at the regional and local levels.

The framework law on environmental protection in Romania is the Government Emergency Ordinance No.195/2005,which stipulates the obligation for projects with a significant impact to the environment to apply for severalenvironmental permits and approval. The environmental impact assessment procedure is detailed in GovernmentalDecision (GD) No. 445/2009, as described below.

1) ESIA LegislationThe Romanian EIA procedure is enacted by GD No.445/2009 on the assessment of the effects of certain public andprivate projects on the environment, which transposes the EU Directive 85/337/EU. Also, GD No. 135/2010 approvingthe methodology for the implementation of the environmental impact assessment for public and private projects is alsoto be complied with as when implementing a project in Romania.7

This Ordinance also stipulates that the competent authority in charge of reviewing the EIA process is the RegionalEnvironmental Agency of the county where the project is located.

As an EU member State, Romania also must reflect the latest EU EIA Directive (2014/52/EU8) in its legislation, whichis in the process of enacting with a draft law being made.

The EIA procedure ensures that the environmental consequences of projects are identified and assessed before thedevelopment consent is issued. The public can give its opinion and the results of the consultations are taken intoconsideration in the development consent procedure of the project. The public has to be informed of the decision.

The national EIA procedure is developed in 3 stages: the screening, the scoping and the review stage. During the process,a public consultation has also to be conducted. According to the interview with Hunedoara Environmental ProtectionAgency, the total term for the acquisition of the EIA license would take at least 6 months.The Romanian EIA procedure can be schematized as follows (Figure 9-18).

7 Source: European Commission on EU Environmental Implementation Review and Project Companyhttp://ec.europa.eu/environment/eir/country-reports/index2_en.html8 EU EIA Directive, amending 2011/92/EU

http://ec.europa.eu/environment/eir/country-reports/index2_en.html

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Figure 9-18 Romanian EIA Procedure Applicable to This Project

(Source: prepared by the study team based on interview with Hunedoara County Environmental Protection Agency)

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a) Screening

The project proponent shall send an application sheet to the County Authority for Environmental Protection, accordingto the format presented in Annex 1 of the Ordinance No .135/2010. The authority after receiving the application analysesthe notification and determines whether the project proponent needs to provide further detailed information by makinga presentation of the project or not, or if the submission is rejected because it is not subject to EIA.

In the case of a thermal power plant development project, according to the Romanian legislation, thermal power plantprojects of more than 300MW require the submission and evaluation of an EIA report (Annex I of GD No.445/2009).Thermal power plants of less than 300MW (Annex II) require a case-by-case examination to decide if an EIA is neededor not. The criteria for this decision are listed in Annex III and include among others, the project characteristics, theirlocation and the evaluation of potential impacts of the project.

The screening stage decision is made available to the public for comments. The environmental authorities have thepossibility to re-examine the screening stage decision based on the public comments.

b) Scoping

The EIA report is based on a check list for the scoping stage, taking into consideration the framework content of theEIA report as provided for by Annex IV of GD No.445/2009. The scoping is performed by a working group composedof representatives of the project developer, the competent authorities for environmental protection and by one or morecertified experts.The EIA report shall be drawn up by certified consultants, independent of the project developer.

c) EIA Review

During this stage a consultation period of minimum 20 days is foreseen, followed by a public debate. In order to analyzethe quality of the report, the competent authority for environmental protection considers the recommendations receivedfrom the interested public.

d) Information Disclosure and Public Consultations

The public is involved in all the stages of the EIA procedure, i.e. in screening, in scoping and in review stage of the EIAreport.The public information and participation in the EIA procedure is ensured by:

- Public announcement of the developer's application for a private or public project, submitted to theenvironmental competent authority;

- Public announcement of the screening decision (made both by the environmental competent authority and thedeveloper);

- Public hearing of the project and of the EIA report;- Public announcement of the decision to issue or not the environmental agreement.

After the submission of the EIA report by the developer to the environmental authorities, a public hearing is organized.The EIA report is made available for public consultation for at least 20 days before the public consultation meeting.

The public consultation meeting is led by the competent environmental authority. All comments made during the publichearing are recorded. The evaluation of these comments is the responsibility of the competent environmental authority.After that, the developer is asked to answer to the public comments in a table format which is attached to the EIA report.

e) Final Decision

The review stage decision (issuing/rejecting the environmental agreement) is taken by the competent environmentalauthority, based on the opinion expressed by the authorities within the review Committee formed by specialists, localauthorities, etc. after analyzing the EIA report, and on the affected public opinions/comments, including on the publicof the affected country, and the answers to them offered by the developer. The decision is made public for information.The decision can be challenged before the competent court of law.

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f) Monitoring & Control

The MOE and Sustainable Development has also established a list of companies authorized to perform ESIA-relatedworks in Romania such as the preparation of ESIA or the Environmental Management Plan (Measurement andMonitoring Plan), etc. Monitoring data has to be periodically reported to the ANPM.

g) Typical EIA Report Content

According to GD No.445/2009 Annex IV, a typical EIA report should consider the potential environmental and socialimpacts with a relevant baseline study and include the following items.

- Description of the Project (site location, size of the project and technical solutions)- Description of the measures envisaged to avoid, reduce and remedy the significantnegative effects on the environment- Data needed to identify and evaluate the main impacts of the project on theenvironment- General presentation of the main alternatives studied by the Implementing entity,with an indication of the reasons of its choice, taking into account the impacts on theenvironment

2) Other Legislation related to Environment, Health and Safety (EHS)

The national legislation related to Environment, Health and Safety applicable to this project are presented in thefollowing sections a) to e). A brief additional explanation in the light of the project and the applicable standards are alsopresented where deemed relevant.

a) Air Quality and Pollution Prevention

Table 9-18 Main Air Quality-related Legislation

No. Legislation Date of Issue Related projectoperations/stages

1 Law No.104/2011 Concerning the Qualityof Ambient Air 15 June 2011

Comparison of emissionsoriginated and the impact onair quality

2 Law No.278/2013 (Annex 5, Part 2) onIntegrated Control of Industrial Pollution 7 January 2014 Emission of air pollutants

during operation

3Decision (EU) 2017/1442 establishingBAT conclusions for large combustionplants

31 July 2017 Emission of air pollutants,during operation


I) Air Quality Standards

Air quality standards are established in the Law No.104/2011, as described in Table 9-19. The most commonlymonitored parameters across Romania’s air quality stations are SO2, NO2, NOX, PM10 and CO. Romanian air qualitystandards, as transposed in Law No.104/2011, have already been fully harmonized with EU Directive 2008/50/EC(Ambient Air Quality and Cleaner Air for Europe).

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Table 9-19 Air Quality Standards in Romania and EU

ParameterRomanian standards

EU1Limit Warning

level Critical level

SO2

Hourly average( g/m3) 350 5001 - 350

24-hour average( g/m3) 125 - - 125

Yearly average( g/m3) - - 20 -

NO2

Hourly average( g/m3) 200 4002 - 200

Yearly average( g/m3) 40 - - 40

NOXYearly average

( g/m3) - - 30 -

PM10

24-hour average( g/m3) 50 - - 50

Yearly average( g/m3) - - - 40

CO Max. 8-houraverage (mg/m3) 10 - - -

* 1 and 2 Measured in three consecutive hours in an entire region or sub-region with at least 100 m2, covered byrepresentative monitoring locations.

(Source: Prepared by the study team based on Law No. 104/2011 and Directive 2008/50/EC)

II) Air Emission Standards

Based on the interviews with Deva CFPP, all equipment employed in the new power plant will have to comply with thecurrent Romanian emission standards as described in Law No.273/2013 (Table 9-20). The interview with theenvironmental authority has shown that the current Romanian emission standards transposed all values established inthe EU’s Integrated Pollution Prevention and Control (IPPC) Directive (2010/75/EU).

For newly constructed power plants, the EU Decision 2017/1442 also requires the application of BAT. TheImplementing entity will design the new power plant in accordance with this legislation too.

Table 9-20 GT (CCPP) Air Emission Limits for New Equipment in Romania and EUGT CO (mg/m3) SO2 (mg/m3) NOx (mg/m3)

Romania EU Romania EU Romania EU

<50 MW - - - - 50 50

50-100MW 100 <5-30 - - 50* 15-40*

100-300MW 100 <5-30 - - 50 15-40* For operation ratio > 70%, measured at 15% O2**24-hour average

(Source: prepared by the study team based on Legea 278/2013 and EU Decision 2017/1442)

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b) Water Quality and Effluents

Table 9-21 Main Water Quality-related Legislation in Romania


1 Ordinance No.161/2006 regarding theclassification of surface water quality 16 February 2006 Surface water quality

regulation

2

Ordinance No.188/2002 for the approval ofnorms regarding the discharging of wastewaterinto the aquatic environment

Presenting normative NTPA-001 and NTPA-002

20 March 2002Water effluent duringconstruction andoperation


I) Water Bodies Classification

Surface water bodies in Romania are regularly monitored by the Environmental Protection Agencies. Water bodies areclassified into Class I to Class V categories according to ecological status determined by the monitoring results, asfollows (Ordinance No.161/2006).- Class I quality - very good ecological status;- Class II quality - good ecological status;- Class III quality - moderate ecological status;- Class IV quality - poor ecological status;- Class V quality - very poor ecological status

Mures River was attributed a Class II water quality by the competent Environmental Protection Authority. Although theconcentrations in Table 9-22 are not the water quality standard values for Mures River, it can be considered as a goodrepresentation of the biophysical and chemical characteristics of this water body.

Table 9-22 Characteristics of a Class II Quality Water Body

Water Quality Parameters Unit Water Quality Class II

pH - 6.5-8.5Dissolved oxygen mg O2/L 7

-Epilimnion (top-most layer) mg O2/L 70-90-Hipolimnion (deeper layer) mg O2/L 70-50

- Non-stratified waters mg O2/L 70-50COD(c)-Cr mg O2/L 25COD(c)-Mn mg O2/L 10

BOD5 mg O2/L 5NH4+ mg/L 0.8NO2- mg/L 0.03NO3- mg/L 3

Total Nitrogen mg/L 7PO43- mg/L 0.2PO4- mg/L 0.4

Chlorophyll “a” g/L 50Dry filtrate residue at 105°C mg/L 750

Cl- mg/L 50SO42- mg/L 120Ca2+ mg/L 100Mg2+ mg/L 50

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Water Quality Parameters Unit Water Quality Class II

Cr g/L 50Cu g/L 30Zn g/L 200As g/L 20Ba mg/L 0.1Se g/L 2Co g/L 20Pb g/L 10Cd g/L 1

Fe2+; Fe3+ mg/L 0.5Hg g/L 0.3

Mn2+; Mn3+ mg/L 0.1Ni g/L 25

Total Phenols g/L 5Active anionic detergents g/L 200

Adsorbable Organic Halides g/L 50(Source: Prepared by the study team based on the existing legislation)

II) Effluent Standards-discharged into Natural Receptors

NTPA-001/2002 establishes the limit concentration for industrial and urban waste water in the discharge into naturalreceptors. The values presented in the Table below apply to all categories of effluents, including from sewage treatmentplants.

The main Parameters for the discharge into natural receptors are presented in the Table below. (Only the most occurringand monitored parameters were given in the report.)

Table 9-23 Standards for Wastewater Discharge to Natural Receptor in Romania

Parameter Unit Romanian standards IFC standards

Temperaturedifference ( T) °C 35 °C after

discharge+3°C above ambientwater temperature

pH - 6.5-8.5 6-9TSS mg/L 35.0 50BOD5 mgO2/L 20 30COD(c) mgO2/L 70 125Total Nitrogen mg/L 10 10Total phosphorus mg/L 1.0 2Oil mg/L 5.0 10As mg/L 0.1 0.5Cd mg/L 0.2 0.1Cu mg/L 0.1 0.5Ni mg/L 0.5 -Zn mg/L 0.5 1.0Pb mg/L 0.2 0.5Hg mg/L 0.05 0.005Mn2+; Mn3+ mg/L Total Mn 1.0 -Total coliform MNP/100mL 400 400

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Parameter Unit Romanian standards IFC standards

Cr mg/L Total 1.0 0.5Mg2+ mg/L 100.0 -Ca2+ mg/L 300.0 -Fe2+; Fe3+ mg/L 5.0 1.0SO42- mg/L 600.0 -Cl- mg/L 500.0 -(Source: Prepared by the study team based on NTPA-001 and IFC EHS Guidelines)

III) Effluent Standards-discharged to Sewage Treatment plants

NTPA-002/2002 establishes the limit concentration for wastewater discharge in the sewerage networks of thelocalities and directly in the sewage treatment plants. The values presented in Table 9-24 below apply to all categoriesof effluents, including from sewage treatment plants. Water from the power plants will be treated in site and sent tothe sewage company within the admissible limits below.

Table 9-24 Limit Concentration for Wastewater Discharge in the Sewerage Networks

Parameter UnitRomanianAdmissiblelimit value

Temperature (°C) 40pH - 6.5-8.5TSS (mg/L) 350BOD5 (mg O2/L) 300COD(c) (mg O2/L) 500NH4+ (mg/L) 30

Sulfides and hydrogen sulfide (S2-) (mg/L) 1.0SO3 2- (mg/L) 2.0SO4 2- (mg/L) 600.0Water-frenzied phenols (C6H5OH) (mg/L) 30Extractable substances with organic solvents (mg/L) 30.0Petroleum products (mg/L) 5.0PO4- (mg/L) 5.0Biodegradable synthetic detergents (mg/L) 25Total cyanide (CN-) (mg/L) 1.0Free residual chlorine (Cl2) (mg/L) 0.5Pb2+ (mg/L) 0.5Cd2+ (mg/L) 0.3Total Cr3+; Hexavalent Chromium (Cr6+) (mg/L) 1.5Cr6+ (mg/L) 0.2Cu2+ (mg/L) 0.2Ni2+ (mg/L) 1.0Zn2+ (mg/L) 1.0Total Mn (mg/L) 2.0

(Source: prepared by the study team based on NTPA-002/2002 )

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c) Noise

Table 9-25 Main Legislation Setting Permissible Noise Levels in Romania


1

Ordinance No.152/558/1119/532/2008approving the Guidelines on the Adoption ofLimit Values

SR 10009/2017 Acoustics - Permissible limitsof the ambient noise level

13 February 2008 Noise duringconstruction andoperation


When applied to thermal power plant projects, permissible noise levels in Romania are set according to area categories.Noise shall not exceed 65dB during daytime and 55 dB during night time continuously equivalent noise level (A) withinthe power plant site. The other noise level limits applicable in this project are shown in Table 9-26 below.

Table 9-26 Enviromental Noise Limits for Industrial Equipment

Area CategoryRomania IFC

Daytime Nightime Daytime Nightime

Industrial Zone 65 55 70 1 70 1

Residential Area 55 - 55 45

Control room and otherpermanent work places 45 40-45

Maximum permissible sound inworkplaces 87 85 2

1 One hour LAeq (dBA (decibel adjusted))2 8 hours equivalent level

(Source: prepared by the study team based on GD No.321/2005 and IFC EHS Guidelines)

d) Waste Management

Table 9-27 Main Waste Management Legislation

No. Legislation Date of Issue Related project operations/stages

1 Law No.211/2011 on WasteManagement

28 November 2011 Waste management during theconstruction and operation of theplant project


e) Soil

Table 9-28 Main Soil-related Legislation in Romania

No. Legislation Date of Issue Related project operations/stages

1

Ordinance No.756/1997 for theapproval of the Regulation regardingenvironmental pollution assessment:Soil

28 June 2011 Risk management of soilcontamination during constructionand operation


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Table 9-29 Limit Values for Soil Contamination as Established in Order 756/1997 (2011 Update)

Pollutant Limit values (mg/kg)Warning level Intervention level

As 25 50Cd 5 10Co 100 250Cu 250 5,600Cr 300 600Pb 250 1,000Mn 2,000 4,000Hg 4 10Ni 200 500SO42- 5,000 50,000Zn 700 1,500Total petroleum-derivedcompounds 1,000 2,000

(Source: prepared by the study team based on Ordinance No.756/1997)

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(5) Conclusions and Considerations regarding the Project ImplementationThis preliminary environmental and social review of the current project has shown that the main environmental aspectsof the projects are as follows:

l The power plants will be equipped with modern CCPP complying with the latest EU-level air emission levels,which will substantially reduce current atmospheric emission levels.

l The amount of water intake will be reduced by reusing three different intake cycle routes of existing equipmentbecause river water is used as cooling water.

l The power plant will be located within properties already owned by the operator and a private company withoutthe need for expropriation or resettlement, but negotiation may be needed for land acquisition.

l The power plant will be placed in a region with sparse habitation and agricultural land, limiting noise impacts onneighborhood.

l There are no particular concerns regarding sensitive habitats or endangered species.

Considering the above, environmental impacts due to the project are not expected to be substantial. However, themeasurement and evaluation of the extent of each of the impacts presented in this report should be carefully developedduring the ESIA preparation phase, in accordance with Romanian legislation. Due consideration should be especiallygiven to the following topics regarding the prediction/evaluation of impacts in the construction and operation phases:

l Cumulative impacts of air pollutant emission: The existing power plant does not comply with the current Romanianemission standards. The new equipment will be in compliance with the latest Romanian and European standards,but it is important to determine the impacts of the whole power complex, by being aware of the decommissioningprogram of the existing Units.

l Destination of waste during the construction phase: It is important to notice that large amounts of waste may begenerated due to the demolition of old buildings, cooling towers and equipment in the power plants for the projectto advance. This waste will have to be properly segregated and disposed of in authorized landfills or treatmentequipment.

l Soil quality survey: According to recent soil monitoring results, no soil contamination is observed in the projectsite. Nonetheless, after determination of the project site location, a more focused soil quality study would berecommended to determine that no particular intervention is needed, such as topsoil removing.

Romanian legislation also promulgates that stakeholder’s involvement should occur at the earliest phase of the project.It is strongly encouraged that public participation is guaranteed and that those opinions are reflected into design,construction and operation of the power plant.

Chapter 10 Implementing Organization

10-1

(1) Complexul Energetic Hunedoara (CEH)

1) General Corporate Information

Table 10-1 CEH General Information

No Item Description

1 Company Name COMPLEXUL ENERGETIC HUNEDOARA S.A.

2 Legal Form Joint stock company

3 Date of Incorporation November 2012

4 Registered Office 2 Timisoara St., Petrosani, Hunedoara County, Romania

5 Registered Capital RON 349,821,330.- (fully paid in)

approx.EUR 74,967,603.88 (@ EUR 1 = RON 4.6663)

6 Main Activity Production of Energy

7 Shareholders MOE, holding 35,453,533 shares, with a value of RON 10.00 each,

representing 100% of the share capital

8 General Manager Mr. Samuel Dioane

9 Financial year Same with the calendar year

(Source: prepared by the study team based on a legal firm Nicolae’s report outsourced)

The CEH is one of the economic operators from the utilities domain from the MOE portfolio and one of the major

electricity producers in Romania which, with an installed capacity of 1,075 MW, provides 2% of the total national

electricity production, being the largest electricity producer in the northwest of Romania.

The Company was established based on the Government Decision no. 1023/2011, through the merger of

Electrocentrale Deva S.A. and Electrocentrale Paroseni S.A., in November 2012, being an integrated

energy-mining company, its main activity being the production of electric and thermal energy based on hard coal

from Jiu Valley

Next to electric energy production, the Electrocentrale Deva and Electrocentrale Paro eni branches from CEH S

are the sole producers that deliver thermal energy in a centralized system in Deva, Petro ani, Vulcan and Lupeni.

Moreover, the Electrocentrale Deva branch is also an operator of the Deva county public service heat supply,

while the Electrocentrale Paro eni branch ensures the termal agent for Petro ani, Vulcan and Lupeni from Valea

Jiului.

Thus, the CEH activity contains 2 large structures, namely: (1) electric and thermal energy production activity

through Deva Power Plant and Paro eni Power Plant and (2) mining activity by exploiting the Lupeni, Lonea,

Vulcan and Livezeni mines.

10-2

The Deva power plant currently has 4 energy groups of 210 MW each and an energy group of 235 MW on hard

coal, while Paro eni Power Plant owns an energy group of 150 MW on hard coal.

2) Financial Conditions of CEH

The following tables show CEH’s financial performances in the last three or four years. As you can see an

operating expense is more than double of an operating income in each year and there is no potential that an

operating income will increase sharply considering the aging existing equipment, environmental regulation

strengthened and the higher procurement cost of fuel coal.

10-4

3) Insolvency Procedure of CEH

The first request to initiate the insolvency procedure against CEH was filed on April 8th, 2015 by Romlink Invest

S.R.L., the application being filed in the Hunedoara Court. Further insolvency requests against CEH have also

been submitted in the same file by seventeen creditors. In this context, on 7th January 2016, the Hunedoara Court

decided to initiate the insolvency procedure of the CEH.

Subsequently, against the Hunedoara Court’s decision, the Company's syndicate appealed to the Alba Iulia Court

of Appeal. As a result, on 3rd May 2016, the court upheld the appeal and annulled the original sentence opening

the insolvency proceedings.

The second request for initiating the insolvency procedure was filed on 29th November.2016 by CEH itself, but

rejected by the Hunedoara Court on 7th February 2017, although the syndic judge showed that the Company's

debts far outweigh the payment possibilities of the CEH.

CEH appealed this decision to the Alba Iulia Court of Appeal on 9th March.2017, which is still continues.

10-5

(2) Organizational Structure for Project Implementation in Romania

1) Project Implementing Body

Currently, there are no project implementing body yet.

2) Operation and Maintenance Organization of Power Plant

For the operation and maintenance organization, as stated in Chapter 6 (1) c), we recommend organization headed

by a director with four departments, namely, operation, maintenance, environmental safety and administration.

Figure 10-1 Organizational structure for project implementation

(Source prepared by the study team)

Project Implementation Entity

Director

OperationDepartment

MaintenanceDepartment

Environment,Health and Safety

Department

AdministrationDepartment

Power Plant Organization

10-6

(3) Evaluation of the Capacity of the Romanian Executing Body

1) Capacity to Repay Debt

The project implementing body is not decided yet. However, since buyer's credits will be composed after banks

assess the repayment capacity of the applicant, the institution who made the passing mark is deemed as bankable.

(For detail, please refer to Chapter 12).

2) Capacity of Equipment Operation and Maintenance

a) Maintenance

The skill level of local personnel regarding CFPP was confirmed to be favorably comparable to that of Japan,

since local personnel has long years of experience in maintaining CFPP.

However, the study team confirmed that the local personnel’s knowledge on the equipment and maintenance of

GT related equipment is insufficient. Due to the lack of knowledge on GT, we confirmed that training is

necessary to improve the skills for CCPP maintenance, especially on the GT.

b) Operation

The skill level of local personnel regarding CFPP was confirmed to be favorably comparable to that of Japan,

since local personnel operated semi-automatic CFPP for many years.

However, the study team confirmed that the local personnel’s knowledge on the equipment and operation of GT

related equipment is insufficient. Due to the lack of knowledge on GT, we confirmed that training is necessary to

improve skills for CCPP operation, especially on the GT.

Chapter 11 Technological Advantages of Japanese

Companies

11-1

(1) Participation Forms of assumed Japanese Companies(Investment, Supply of Equipment and Materials, Operation

Management of Equipment, etc.)

1) Supply of Equipment

In this project, as equipment and materials are expected to be procured from Japan, starting with GT, ST, generator,

HRSG which are main equipment of CCPP, equipment such as turbine auxiliaries, generator auxiliaries, HRSG

auxiliary machines, electrical equipment, control Equipment, disaster prevention equipment, water treatment /

wastewater treatment equipment, etc. Commercial power generation equipment is a large public infrastructure,

and it is required to have high performance and high reliability for its economic efficiency and stable supply of

electric power. In addition, power generation equipment are combinations of comprehensive technologies such as

machinery, electricity and control, and in particular CCPP using the latest GT requires the latest technology

accumulated through long experience and achievement.

By supplying power generating equipment from Japanese manufacturers, highly efficient GT can be applied to the

project, and thus environmental impact of CO2, NOx and the like and fuel cost can be reduced. In addition, it can

be expected to benefit Romanian economy and society by reducing LCC by providing the latest GT which is the

unity of long experiences and performance, and by sharing know-how of CCPP’s operation and maintenance.

Transfer of on-site culture such as meeting delivery deadline and construction completion deadline can also be

expected by the training program. Through the above, we can contribute to the improvement of quality infrastructure

in Romania.

2) Collaboration with Third Country

Japanese company can be in partnership with the company of a third country. That is, collaborating with Chinese

company through delivery of HRSG equipment.

When HRSG equipment is exported from China to Romania, Chinese companies alone may not tune HRSG

equipment to comply with Romania’s standards. Meanwhile, if collaborated with Japanese companies, Japanese

companies can make HRSG equipment to comply with the EU standards which is a request from Romania, by

specifications and manufacturing control. Specifications and manufacturing control are Japanese companies’

specialty. Japanese companies can control to make HRSG equipment to meet Romanian requirement.

Through the above, it is possible for Japanese companies to collaborate with a third country and push the expansion

of infrastructure exportation of both countries. In importing HRSG, the risk of anti-dumping tax is considered, but

it is confirmed that the risk is low in the field survey.

3) Management of Equipment

The implementing entity who manage CCPP for this project is not decided yet in the current situation. However, it

is assumed that the operation of the power plant will be done by the Deva personnel. Deva personnel has no

experience of GT operation and it is confirmed that support is needed on O&M side regarding GT. In this regard,

11-2

we can support Deva personnel through consulting based on the experience of Japanese power generation companies

who has introduced, O&M of CCPP with the latest type GT throughout history. Also, in addition to the know-how

of O&M of power generation equipment, we can share our experience on the overall operation management

including the fuel supply, the power plant including the power transmission system, and the asset management of

the entire system. In addition, Japanese power generation equipment manufacturer will train Deva personnel on

operation and maintenance based on GT's technology at the project execution process and due to subsequent long-

term maintenance contract. These contributes to the efficient and smooth operation of the power plant by Deva

personnel.

(2) Advantages of Japanese Companies in Project ImplementationJapanese power generation equipment manufacturers have continued development efforts to improve performance

and reliability while competing with manufacturers in Europe and the United States. In addition, they have

constantly made efforts to reduce costs in fierce international competition. As a result, there is sufficient

competitiveness in terms of technology and price.

In terms of operation, maintenance, and operation management, technologies and experiences of Japanese power

generation equipment manufacturers, electric power companies, etc. contribute largely to support CCPP operation,

maintenance and operation management of this project.

(3) Strategy Necessary for Japanese Companies to Receive OrdersIn order for Japanese companies -especially power generation equipment manufacturers that produce GT- to expand

its exportations, efforts to develop technologies are necessary to achieve continuous performance, output

improvement and high reliability against the foreign manufacturers. Accumulating the record of construction and

operation is also necessary. Compared to competing foreign manufacturers, the GT in Japan seems to have

superiority from the viewpoint of LCC, but competition in performance and output development in this field is

fierce and remarkable improvement is made in short period of time, so technology becomes outdated quickly. It is

also necessary for Japanese companies to further effort to maintain technical superiority so as to be adopted to this

project.

In order for Japanese companies to receive orders, it is imperative that Japanese manufacturers who supply

equipment reduces cost. Reduction in construction costs contributes to reduce the project’s initial investment and

accordingly the reduction of power generating tariffs. It would be advantageous for traditional contractors to appeal

their record at the time of severe bidding, since emerging-country companies that do not have such record. Company

records of installation would be a benefit to Japanese manufacturer, if it is included in the bidding condition.

Chapter 12 Financial Arrangements

12-1

(1) Funding Option

A fund-raising will be performed in accordance with the Arrangement on Officially Supported Export Credit

modified and effective as of 12th July 2018 and published by the Organization for Economic Co-operation and

Development (OECD). The following two (2) options of export loans are considered as means of the fund-raising

from Japan.

A buyer's credit (B/C) and a bank-to-bank loan (B/L) are direct loans respectively provided to a foreign importer

and a foreign financial institution for financing the import of Japanese machinery and equipment or the utilization

of Japanese technical services. A direct loan to an importer is called buyer's credit and to a financial institution is

called a B/L.

1) Buyer’s Credit

The purpose of this scheme is to support export from Japan and in principle only Japanese products in export

contracts are subject to loan.

B/C can also cover third country goods (intermediary goods) in the foreign currency portion of the EPC contract, in

case that

I) the EPC contractor is Japanese company, and

II) the export value from Japan, the value of goods/services that Japanese companies produce/render in abroad

or those combination is not less than 30% of the EPC contract amount.

In case of the limited recourse B/C, as a general rule only Japanese products in export contracts are subject to loan

with the concept that third country goods (intermediary goods) shall be financed by the Export Credit Agencies

(ECAs) of origin countries. However third country goods (intermediary goods) would be eligible only when certain

conditions are met.

Figure 12-1 Scheme of B/C


Directpayment

Exportsof Plant

Loan (B/C)

*1 Japan Bank for International Cooperation: JBIC

*2 Nippon Export and Investment Insurance: NEXI

JBIC *1 Importer inForeign CountryNEXI *2 Private Banks

JapaneseExporter

InstallmentsRepayment

Buyer's CreditInsurance

12-2

The terms and conditions of B/C such as the loan amount, interest rates, loan repayment periods and methods, risk

premium rates and etc., are determined based on the OECD Arrangement.

2) Bank Loan

A B/L is direct loan provided by JBIC and Japanese private banks covered by NEXI’s buyer’s credit insurance to a

foreign financial institution for financing the import of Japanese machinery and equipment or the utilization of

Japanese technical services.

A direct loan to a financial institution is called a B/L.

Figure 12-2 Scheme of B/L


The terms and conditions of B/L are determined based on the OECD Arrangement, too.

JBIC provides export credit lines to Turkish 4 banks, namely Garanti bank, Deniz bank, Yapi Kredi and Is bank for

this scheme, which are eligible for those projects in Romania contributing to climate change mitigation.

Loan (B/L)JBIC Finanncial Institutionin Foreign Country

DirectPayment

Exports ofPlant

RepaymentLoan

Importer inForeign Country

InstallmentsRepayment

NEXI Private Banks

JapaneseExporter

Buyer's CreditInsurance

12-3

(2) Feasibility of Fund-Raising

1) B/C

Three cases of borrowers, namely the Government of Romanian (the Ministry of Finance (MOF)), CEH and the

third organization which is supposed to take over only the power generation assets of CEH, are considered.

a) To Government of Romania

In June 2018 Japanese government has developed “the Export Strategy for Infrastructure Systems”, where the

government commits to the promotion of exporting Japanese high-efficiency thermal power generation technology

to especially emerging and developing countries that are obliged to depend continuously and heavily on fossil fuels,

from the viewpoint of the improvement of energy security and the contribution to low-carbon society and mitigation

of environmental burdens.

Romania is lined up as one of the candidates to which Japanese high-efficiency thermal power generation

technology could be exported.

In line with the above governmental policy, both JBIC and NEXI are very positive about accommodation of funds

to Romanian government for the high-efficiency thermal power generation project.

b) To CEH

They say that loans to CEH are not totally denied, however it is quite severe because of the situation of continuing

the deficit in the past four years (about 161 million euros in 2017) and no possibility of the revenue from electricity

sales exceeding the expenses.

This scheme is not realistic, unless repayment of large debts and relief measures from the government or county in

order to support CEH's survival are taken, although CEH survives while holding a huge debt overdraft.

c) To the Third Organization

When we paid a courtesy visit to the Governor of Hunedoara in July 2018, he clearly mentioned that CEO's power

generation assets would be handed over to the county, however till now the successor has not been decided yet.

Study team confirmed that JBIC/NEXI is the direction to tackle the provision of B/C to local governments. The

final decision shall be made after their due diligence on the financial situation of the county.

12-4

In the initial stage, there was a story that a new state-owned organization would be established and hold important

infrastructure assets including this project. In this case, since it is a new organization, there is no management record

and so it is judged that B/C cannot be received unless the payment guarantee issued by the government is available.

Thus, In order to receive B/C from JBIC / NEXI under the condition that the payment guarantee issued by the

government is not available, the existing organization whose financial condition is healthy enough to be accepted

by JBIC/NEXI needs to be the borrower.

2) B/L

JBIC has given three domestic banks in Turkey credit lines which are eligible for the projects in Romania.

Table 12-1 Credit Lines provided by JBIC to Turkish Banks (as of October 31, 2018)

No Turkish Bank Application Limit Credit Line Undisbursed

1 Garanti Bankasi March, 2019 US$500million US$500million

2 Denizbank February, 2019 US$200million US$200million

3 Yapi ve Kredi Bankasi November, 2019 US$350million US$201million

(Source: JBIC HP)

The project cost being considered, there is the possibility that the credit line provided to Garanti Bankasi will be the

B/L targeted, however their following negative opinions were received;

I) according to HQs, the branch office in Romania is in charge for all the projects in Romania

II) according to the person in charge of Bucharest branch, it is general for the domestic banks in Romania to

give loan not by itself but as the syndicate loan, and the project cost is relatively huge being compared with

the total asset of Garanti Romanian branch of about EUR 2.5 billion.

According to JBIC, it is possible to make similar agreements for the allocation of credit lines with the domestic

banks in Romani, however because of the following reasons

I) it will takes much time, first of all, and

II) even if the agreement between JBIC and Romanian banks were made, the issue raised by the person in

Garanti Bucharest branch still remains,

it is unlikely to realize the project under B/L scheme.

12-5

(3) Conclusion

Since the magnitude of the project cost is relatively huger than the asset size of the domestic banks in Romania, B/C

provided by JBIC/NEXI shall be considered rather than B/L.

In this case, as before-mentioned B/C provided by JBIC/NEXI is available, only if the borrower is

I) the government, or any organization with the condition that the payment guarantee issued by the government

is available, or

II) the existing organization whose financial condition is healthy enough to be accepted by JBIC/NEXI.

Thus, either the above I) or II) shall be pursued.

Chapter 13 Action Plan for Project Implementation and

Challenges

13-1

(1) Effort toward Implementation of the Project

1) Progress implemented by the Authorities concerned

Considering the diversification in electricity generation equipment, the availability of domestic natural resources

and environmental friendly equipment, the MOE has the plan to install most advanced natural gas fired combined

cycle power plant within the Deva CFPP site, which shall be designed to operate with a required load flexibly by

the national grid over the year.

On 27th February 2018, ITOCHU Corporation and others made a presentation on the most advanced natural gas

fired combined cycle power plant in front of MOE and CEH. Then the Undersecretary of the MOE expressed the

intention to implement the feasibility study on the project upon making the agreement with Japanese company.

Thus, the Memorandum of Understanding was made on 11th May 2018 among MOE, CEH and ITOCHU

Corporation for ITOCHU’s preparation of the study on the new high efficiency 350 MW class generation equipment.

13-2

(2) Presence or Absence of Legal and Financial Constrains

1) Practical Aspects

a) Implementing Organization

As so mentioned in Chapter 10, CEH is under insolvency process and it is necessary to establish the other

implementing organization of the project.

During the presentation held on 27th February 2018 referred in the previous section, the MOE informed that a new

state-owned enterprise would be established and implement all the national important infrastructure projects

including this one.

The study team paid a courtesy visit to the governor and the vice governor of Hunedoara county on 25th July 2018

and was informed by the governor that the county would succeed CEH’s power generating equipment and

implement this project too.

Later, the study team was informed by the local partner of this project on 26th September 2018 that CEH’s

generating equipment would be split from CEH and transferred to either Hunedoara county or state-owned

ROMGAZ.

Since then the study team has requested the outsourced Nicolae legal firm to check and report the situation time to

time, however so far not received a clear picture yet.

There are two hurdles, namely licensing procedure and financial arrangement to implement the project, however it

is not the implementing organization established until those two issues would be faced.

b) Licensing Procedure

The following key permits are required for the construction of a new power generating equipment.

I) Urbanism Certificate

The urbanism certificate represents an information document issued by the local administration, setting the legal,

economical and technical regime applicable to the location of the envisaged construction works, the urbanism

indicators to be observed, as well as the list of the prior approvals to be obtained by the applicant in order to obtain

the building permit. Such prior approvals generally relates to the locations for which a specific regime has been

13-3

imposed by law (i.e., archaeological or historical sites, protected natural areas, military constructions neighborhood

areas, existence of telecommunication, electrical or gas networks, etc.).

There is no restriction on application time for the urbanism certificate, provided that the local municipality should

issue this certificate within 30 days from the application date.

The urbanism certificate includes a list of all legal permits and approvals necessary for the issuance of the

construction permit. The validity of such certificate is established by the issuing authority and it is mentioned therein

(between 6 and 24 months)

II) Construction Permit

The following permits are necessary to start the construction.

Table 13-1 Major List of Permits and Approvals required

Permit/Approval Applied to

1 Zonal Urbanism Plan/ Building Permit Local Administration

2 Establishment Authorization ANRE

3 Environmental and Social Impact Assessment Local Administration

4 Grid Connection Transelectrica/ANRE

5 Aviation Easement Civil Aviation Authority

6 Approval by Neighbouring Owners Neighbouring Owners

7 Electromagnetic Interference National Communication Authority

8 Waters Endorsement National Water Administration

9 Emplacement Endorsement State Natural Gas System Operator (Transgaz)

10 Endorsement Agricultural Minister and Rural Development

11 Endorsement for Land Plots Administration of Land Improvement


III) ESIA

According to the information obtained, it takes at least six months after submission of the official application to

clear ESIA procedure in Romania, which is the critical path for obtaining the construction permit. In addition, the

funding provided by JBIC/NEXI being expected for the implementation of the project, the further study shall be

made by the international environmental advisor hired by JBIC/NEXI.

The following shows the ESIA procedure in Romania.

13-4

Figure 13-1 ESIA Procedure


NO

Objection

Public Hearing

Decision made byLocal Administration

ESIA done

Yes

No Objection

Screening Form

ESIA Procedurenot necessary

Application Draft

Judgementif ESIA necessary

PublicAnnouncement

13-5

2) Financial Aspects

The study team continued to examine the method of financial arrangement confirming the following matters with

the organizations concerned and a legal firm.

I) The Implementing Organization

II) The Borrower MOF, MOE, CEH or the Third Party

III) Loans collateralized by CO2 tax levied

The study team obtained the following comments through the meetings with JBIC/NEXI.

i) General

In case the government be a borrower, it is first confirmed if the entity has the right to borrow external debt.

Usually, the borrowable entities are either the MOF or the central bank. The other ministries or agencies

other than those cannot be borrowers without their approval as the budget control does not work. Therefore,

if the MOE be a borrower, it is necessary to secure MOF’s prior consent.

It is not the case if there stipulates in the law that the MOF guarantees to bear any foreign debts, which shall

be verified.

ii) Individual Borrower

Table13-2 JBIC’s Comment on Individual Borrower

Borrower JBIC’s Comment

1MOF or with MOF’s

Payment GuaranteeLendable

2CEH without MOF’s

Payment Guarantee)

Almost impossible to lend money

It is lendable if the government supports CEH’s survival and assures

CEH’s repayment, which seems to be distant.

3 Hunedoara CountyJBIC can lend money to those local administrations whose financial

conditions are health.

4Private Company

(Financially Health)Lendable


As so-mentioned in Chapter 12, the following conditions are must to receive the loan provided by JBIC/NEXI:

I) The MOF or the central bank guarantees the repayment of the borrower, or

II) The borrower shall be the existing organization whose financial condition is healthy enough to be accepted

by JBIC/NEXI.

13-6

(3) Strategic Significance

1) Life Cycle Cost

Although it is also described in Chapter 2, with the accession to the EU, existing thermal power plants need to

comply with EU environmental regulations. CFPP occupying more than half of the thermal power plants in

Romania do not have sufficient environmental equipment. In addition, due to the progress of aging, it is under

consideration that repowering of gas-combined thermal power with low environmental impact, large-scale

renovation of coal boiler, introduction of environmental equipment, and abolition of CFPP are under

consideration.

For industrial GT adopted in this FS, the study team recommends highly reliable GT with abundant cumulative

operation record. By introducing highly reliable and highly efficient CCPP, low LCC can be achieved. Moreover,

by replacing the old power plant, it can contribute to the reduction of environmental impact including CO2.

2) Capacity Building of Human Resource

a) GT Training

As mentioned in chapter 10, it has been confirmed through field survey that staff of the Deva CFPP has

operation and maintenance knowledge on equipment related to CFPP (ST, BOP, etc.).

Meanwhile, the study team confirmed that knowledge is lacking for GT, which is the main machine of CCPP,

which will be operated for the first time as a member of the Deva CFPP. In addition, the study team has

confirmed that there are training needs on operation and maintenance of GT equipment from staff of the Deva

CFPP.

Therefore, from the viewpoint of training human resources, operation and maintenance training of GT

equipment will be mainly described below.

Operation and Maintenance Training Provided by GT Manufacturer

The features of operation and maintenance provided by GT manufacturer are shown in Table 13-3.

Training will be held on the desk base, and the contents are general matters concerning equipment. It is mainly

carried out before the COD of CCPP.

Table13-3 Features of O&M Training provided by GT Manufacturer

Item Contents

Training form on the desk base

Training content general matters concerning equipment

Implementation period before the COD of CCPP


Operation and Maintenance Training Provided by Power Generation Company

Table 13-4 shows the features of operation and maintenance training provided by electric power companies.

Considering actual operation, practical training is also taken into consideration in training as well as desk.

In addition to the general content, the content also includes specific content based on equipment operation.

13-7

Implementation period is included before COD of CCPP, also after COD, and features are different from

training provided by GT manufacturer.

Table 13-4 Features of O&M Training Provided by Power Generation Company

Item Contents

Training form on the desk and practical training

Training content general matters concerning equipment +

specific content

Implementation period Before COD + After COD


The above two training (provided by GT manufacturer / provided by power generation company) is a

mutually complementary role training. Therefore, by introducing both training, the study team believe that

it will be possible to improve the operability of CCPP and foster human resources supporting this

improvement. From the above, the study team recommend to introduce both training in this project.

13-8

(4) Action Plan and Challenges

1) Site Selection and Specification of the Plant

a) Site Selection

The MOE and CEH presented three places in the Deva CFPP as the candidate of a new power generating equipment.

The study team will explain the reasons shown in the table below and will appeal the selection of the third plan to

MOE and CEH.

Table 13-3 Comparison among Candidates of Site

Plan

Consideration

Plan 1

Empty Lots in Units 1&2

Plan 2

Unused Coal Storage Yard

Plan 3

Beside Unit 6

Cost

Increase

Demolition Distance from existing

equipment

Land Acquisition

Environment Soil contamination

Asbestos influence

Soil contamination

Operation Inconvenience in O&M

Construction

Period

Large scale demolition

Soil remediation

Soil remediation

Common equipment

installation

Land Acquisition

Safety Insufficient earthquake

residence

Impact on operating

units

Evaluation Not recommendable Not recommendable Best


b) Specification of the Plant

The following matters are required for the new power plant.

i) Meeting the demand

ii) Diversification of power generation type

iii) Utilization of the natural resources

iv) Environmentally friendly

v) Grid stability

vi) Flexibility in ancillary service

vii) Most advanced technology

13-9

Thus, 350MW class gas fired CCPP has been selected.

2) Implementing Organization and Financial Arrangements

It is totally up to the judgment of Romania side to decide which organization will implement the project and how to

procure the finance for. The study team will continue to provide the relevant organizations in Romania, mainly

MOE, with the necessary and appropriate information, while paying close attention to the project.

3) EPC Contract

It is accepted legally in Romania to select the EPC contractor through direct negotiation, which however is not

practical as it requires a process to obtain the approvals by the related organizations in EU. Therefore, it is judged

that the EPC contractor will be selected through the international bidding process.

In general, the following shows the selection process of the EPC contractor.

13-10

Figure 13-2 EPC Contract Procedure

* National Public Procurement Agency: ANAP


Approved

Revised Tender EvaluationReport

Not Approved

Not Approved

Draft ofTender Document

Revised Draft ofTender Document

Approved

Tender Announcement

Tender Submission

Tender Evaluation Report

EPC Contract

reveiewedby ANAP *

Tender Reportreviewed

13-11

4) Conclusion

The challenges for implementing the project are summarized in the following two points.

i) Implementing Organization be selected

It is not the implementing organization established until the licensing procedure and financial arrangement

would be faced

ii) Financial Arrangements

The MOF would not issue guarantee for the repayment of external debt for implementation of the project.

The export credit provided by JBIC/NEXI is not available to neither MOE nor CEH.

In light of the necessity of main power supply, district heat system and ancillary service in national power grid in

the region, it is necessary to renew the generating equipment in Deva CFPP. It is considered as the most suitable to

construct a state-of-the-art natural gas-fired combined cycle power plant, taking into account the diversification of

the type of power generation, domestic natural resources, environmentally friendly, and the flexible operation

required by the national grid system throughout the year. Under such the circumstances, the organizations concerned,

mainly the MOE, are expected to take urgently the necessary steps action to realize the project.

Documents

Final Report(English Version) · Preface Thisreportis a summary oftheresult on “FY2018StudyonBusinessOpportunity ofHigh-qualityEnergy InfrastructuretoOverseas(Feasibility Study