Bosnia: Price of electricity from new power plant Tuzla will we uncompetitive

, SEE Energy News

The multiannual preparation for the construction of the Power Unit 7, 450 MW, in the Thermal Power Plant Tuzla is nearing its end.

After the long analysis which lasted for one year, the construction of the power unit seven in the Thermal Power Plant Tuzla got the support of the Council of Ministers of BiH and, in this regard, Chairman of the Council of Ministers of BiH has been authorized to send the letter of support to the Prime Minister of the People’s Republic of China.

Due to political turbulence and frequent changes of political parties constituting the Government, in this project, ten years have been lost in the search for a suitable strategic partner. “It was initially planned for 2016, then 2017. Now, if everything goes well, it might be finished in 2021”, Jusuf Merić, the former leader of the project of construction of the Power Unit 7 in TPP Tuzla, explains. The European Union and its institutions have refused to finance such project because of strict environmental standards. Therefore, The Electric Power Industry of BiH turned to China, which will finance the construction of the power unit 7 through a loan of 785 million euros. “It will be financed by Exim bank, the Chinese export bank, with the interest rate of two percent and the repayment period of 20 years”, Merić adds. The sale price of energy from the power unit 7 of TPP Tuzla amounts to 56.75 EUR / MWh. In addition, the price of lignite from the mine ”Kreka“ envisaged in the project amounts to somewhat less than EUR 2,4/GJ (4.75 KM), but if the actual price of the project should be higher, “the competitiveness of the existing production and the profitability of construction of new units will be threatened”, it is written in the documents of the Electric Power Industry of BiH of which environmental organizations have warned.

Experts warn that the power unit seven is the only lifeline for the mine Kreka, which employs around four thousand miners. “It has to be borne in mind that such ‘wounded’ Kreka, brought to the brink of collapse, still gives around 40 percent of energy coal to the Electric Power Industry and the entire energy system would be jeopardized by the possible downfall of the mine Kreka”, Edin Delić from the Faculty of Mining and Geology in Tuzla remarks. The Power Unit 7 will be a replacement for the already dilapidated power units, the lifetime of which is nearing end. “We have a surplus of electricity on the market and it is cheap. All banking institutions, such as IBRD, World Bank etc., are banned from funding thermal power plants. There is no one left but private investors practically, or, to say this in other words – there is no one left but the Chinese”, Merić says. Federal TV has unofficially found out that, thereby, the Council of Ministers gave priority to the power unit seven over the construction of the TPP in Banovići, which has gone only halfway due to many designing failures. When the power unit 7 is built, it will provide almost one quarter of energy produced by the Electric Power Industry of BiH, transmits