Moldova is entering this winter with serious risks to energy security. And the point is not only in the likelihood of an increase in prices for gas, and then for energy resources, but also in the fact that we are left on the threshold of winter without about 25% of the capacity for the production of electricity and heat.
This is due to the fact that this autumn the standard safe operation period of the second power unit of Source 1 (former CHPP-2) of Termoelectrica SA, the main producer of heat and electricity, expires. in the country, and next year the warranty period will also expire for the third block of the three existing ones, –writes Mold-Street.
A power unit with a capacity of about 80 MW of electric power and 100 Gcal per hour (Gcal / h) of thermal energy cannot be operated without reconstruction and / or modernization.
"I cannot launch this unit now. None of the regulatory and supervisory bodies will allow this, because the standard service life has expired "- says Veaceslav Eni, CEO of Termoelectrica, the largest electricity and heat producer in the Republic of Moldova (excluding the Moldavian CHP in Cuciurgan).
Although the urgent need for this modernization is obvious, the tender for the selection of the company to carry out the work has already been postponed several times, for various reasons.
Inheritance
Termoelectrica was founded in early 2015 after the merger of municipal enterprises Termocom with CHP-1 and CHP-2. The three companies that became the backbone of Termoelectrica SA brought in annual losses of 700 million lei. At the same time, historical debts of 2.8 billion lei were inherited for gas supplied by Moldovagaz SA, accumulated with a number of other litigations and problems, including obsolete assets, etc.
“Since 2016, we have not accumulated any new debts, we have paid all bills for gas consumption on time, and every year we pay off part of the historical debt. Thus, we have achieved results that can be envied. If in 2015 we incurred losses in the amount of 315 million lei, then the subsequent years were profitable. Over the past five years, we have saved about 600 million lei. In 2020, for the first time since 1999, the tariffs for electricity production were reduced by ANRE, ”says Vyacheslav Yeni, General Director of Termoelectrica.
In his opinion, it would be logical that at least half of these savings ANRE left Termoelectrica for investment. Moreover, the state of the generating facilities is critical.
“We produce 15% of all electricity consumed in the country and provide heat to Chisinau and the suburbs of the capital. Our enterprise is a strategic one, and the energy security of the country largely depends on what state it is in, ”added Vyacheslav Yeni.
According to him, in 2016-2018, several modernizations of heating networks, parts of equipment and installations, etc. were carried out. Thus, a continuous and high-quality supply of heat energy and hot water was ensured, and residents of Chisinau, who were disconnected from the central heating system by thousands in the past, now remain consumers. Termoelectrica... The modernization process was greatly assisted by a $ 42.5 million World Bank-financed project that Termoelectrica successfully implemented. However, the main problem remained unresolved: the modernization of generating capacities, the standard operating life of which is coming to an end.
Priorities: modernization of generating capacities
“First, we assessed the situation and set priorities. We found that already in 2019-2020 we will be left without one power unit. That is, it should have been excluded from the scheme altogether, after having reliably worked the 220,000 hours provided by the manufacturer back in 1978. Previously, the unit has already been repaired eight times, being on the verge of safe operation, ”explains Alexandru Lupan, Technical Director of Termoelectrica.
“In 2021, the service life of the second unit will expire, and in a year - and the third unit. That is, Source 1 (formerly CHPP-2) must cease part of its activities. This means that the country will be left without almost 15% of the electricity that we will have to buy from Ukraine or Kuchurgan, ”says the technical director.
“We turned to the Ministry of Economy with the question“ What should we do? ” Energy security is under threat. In addition, if electricity is not produced, heat production will also be stopped, and accordingly the Chisinau municipality will be left without central heating. We have capacities for the production of heat energy, but in this case the tariffs will be much higher, ”says Vyacheslav Yeni.
NOTE: Source 1 (former CHP-2 has three generating units with an installed capacity of 240 MW of electricity and 1200 Gcal / h of heat. But it produced a maximum of 170-180 MW / h of electricity, which is about 70% of the capacity.
Modernization at the expense of tariffs or at the expense of the Contractor?
Since its founding in 2015, Termoelectrica's accounts have been blocked due to historical debt. During this period, they decreased from 2.88 billion lei to 2.02 billion lei. Also, during this period, the turnover of Termoelectrica remained practically unchanged - 2.3–2.5 billion lei per year. Thus, the company did not have the funds for major capital works such as modernization of generating facilities.
In 2016, the World Bank sounded the alarm about generating capacity and announced that it was ready to finance the construction of a new CHP plant.
“But when we analyzed the situation, we came to the conclusion that the project for the construction of new generating facilities would almost double the electricity tariff. Investments in the new station are very large, and this would have a significant impact on the tariff. I spoke with the representatives of the World Bank and told them that the decision is good, but the government has no money, and this will lead to an increase in the tariff. Let's look for another solution! ”- Vyacheslav Yeni recalls.
According to the General Director, then all the largest manufacturers of power plants in the region and in the world were invited in order to find solutions for the repair, modernization and extension of the service life of the power unit in the shortest possible time and at the lowest cost. Among them: General Electric from Romania, Ural Turbine Works, Rosatom, Siemens, Kawasaki, Power Machines, Washita, etc.
“In 2016-2018, we collected information for the development of the Terms of Reference for the modernization of Unit 1. Moreover, experts from the World Bank arrived, who studied and approved the Terms of Reference, developed documents for a tender to select a company that will carry out the modernization of Unit 1.
We passed all the necessary procedures and organized a tender, which provided for the implementation of modernization work, as a result of which the unit's operation period will increase by another 10 years, the power generation capacity from 80 to 110 MW, and heat energy will increase from 110 to 168 Gcal with a reduced amount consumed gas.
The terms of reference were checked and approved by the Board of Directors, ANRE and others. But the main problem was that we did not have the money for such work. I turned to the Government with a request to amend the legislation and allow the implementation of projects such as ESCO... That is, an investor comes in, invests money and modernizes facilities, and the investment pays off within four years. However, only one joint bid was submitted for the auction from the Russian concern Power Machines and the Moldovan company Horus Energy, says Veaceslav Yeni.
The deadline for applications was extended by two weeks, after which another participant appeared, and the Russian concern Power Machines and Horus Energy became the winner. The initial offer was € 10.6 million excluding VAT.
Alexandru Lupan claims that when the engineers opened the unit to start the modernization work, they found that the last major overhaul of the steam turbine was carried out with serious deviations from the instructions for the repair and start-up of power equipment. Waste, pieces of metal, auxiliary parts, etc. were found inside. Thus, there was a need for additional work and equipment that were not originally planned, and this already made it difficult to complete the work on time and increased the cost of implementing the modernization project for Power Unit No. 1.
Innovative project
The project was completed at the end of last year and after several months of testing, the modernized unit was put into operation. We already feel the effect. With practically the same gas consumption, Unit 1 produces about 20% more electricity or about 35% more heat than before. In a fairly short period - just over half a year, Termoelectrica saved 80 million lei. Another advantage is that the tariff was not under pressure and natural gas costs were cut by four percent.
Valentin Balan, director of "Horus Energy", claims that the investment project for the modernization of power unit No. 1 of Source 1 is an innovative and unique project of this scale in the Republic of Moldova.
“The payment deferral of 50 months (no interest accrued) allows the beneficiary of Termoelectrica SA to operate the turbine and produce electricity and heat. Thus, a flow of funds is formed, which can be directed to subsequent payments for modernization, without attracting funds received from the main activity, ”said Valentin Balan.
Note: An investment of around € 12 million should pay off in four years and two months. 140 million lei has already been paid, and the final refund is scheduled for 2023.
Start of the next stage blocked by competitors
A systematic study carried out by the World Bank also showed the need for urgent modernization of power unit 2, according to the model of unit 1 and overhaul of unit 3.
Thus, during the pandemic, Termoelectrica developed a project to modernize unit 2 and a project to overhaul unit 3. Termoelectrica's management says that this will be complemented by the construction of new generation units with 55 MW motors, but this will already constitute the next package of works and services that will be put up for auction. All these works are already planned to be carried out with the money of the World Bank, from a loan of about 92 million euros.
Now the tender procedures are handled by the Joint Unit for the Implementation and Monitoring of Energy Projects (UCIPE). But around RFB No. 9134-MD V1.1 for the modernization of power unit No. 2 and overhaul of power unit No. 3, Source 1, Chisinau, dirty games have begun. A series of articles appeared in the press with defamatory information about Termoelectrica and the company "Horus Energy", which carried out most of the work on the modernization of power unit No. 1.
Their essence is that the possible acceptance of the proposal of the Russian concern Power Machines and Horus Energy would lead to the seizure of the energy system by Russia, and the Terms of Reference were allegedly specially developed so that the world's leading companies would not be able to meet the deadlines for completing the work. ...
One of the consequences of the publications was the postponement of the tender, and, accordingly, the postponement of the start of modernization work, which has a great negative impact on the energy security of the Republic of Moldova.
Valentin Balan, director of Horus Energy, claims that one former prime minister and two businessmen are behind these publications, who had previously proposed to take part in a consortium with Power Machines.
We rejected the "offer" because the consortium has all the necessary components to cope with the implementation of the modernization project.
The conditions for participation in the tender for the modernization of other Termoelectrica power units are quite tough, both from a technical point of view, with the use of effective and safe solutions for the reliable operation of power equipment, and financial and economic, meaning bank guarantees for millions for the flawless operation of the modernized equipment ", - says Balan.
It should be noted that at the moment about 95% of generating plants in Moldova (from CET Nord, Termoelectrica and Centrala Termoelectrică Moldovenească) are produced by factories that are now part of the Power Machines concern. Almost no major modernization or repair can be carried out without the technical support of this concern.
Experts say that it is possible to build a new station with equipment from other manufacturers, but this is an extremely expensive solution and will require ten times more investment. This will inevitably lead to a significant increase in tariffs for end users.
Source: www.mold-street.com
