Hungary: Alpiq privatization of TPP Csepel 2, success case story?

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The company Alpiq Suiss is the owner of the gas-fired combined-cycle thermal power plant Csepel II, located on the bank of the Danube in Budapest. Built in 2000, Csepel II is the first thermal power plant in Hungary funded by private capital. The power plant capacity amounts to 403 megawatts and, with the average generation of 992 gigawatt-hours annually, it covers around six percent of the country’s energy needs.

The power plant provides heat for Hungarian industrial plants, but also for 19.500 homes in the southern part of Budapest. The Csepel group also sells natural gas and provides services within the field of energy.

In 2012, Alpiq Csepel signed a three-year contract on equipment maintenance with the Hungarian branch of Alstom. During the previous year, the power plant Csepel had been modernized, by which its capacity had been increased. By technical and technological modifications, it had been enabled that the power plant, in the cases of unexpected demand, can increase or, if necessary, decrease its performance within several minutes. The ability to control the plant is significant, considering that electricity is very hard to store, so the consumption and generation have to be well-balanced.

Last year in December, a development agreement, worth more than 57 million euros, was also signed. Thereunder, the competitiveness and efficiency of district heating in Budapest will be increased by the modernization and expansion of capacity of the power plant Csepel II.

After the project completion, in the heating season 2017/2018, heat generation will be increased from 145 to 245 megawatts. In this way, affordable heating will be provided for 300.000 homes, by which two goals will be achieved – cheap heating and the connection of new consumers.

A part of the investment amounting to 50 million euros will be taken over by the public city company for district heating called Fotav, whereat one half of this amount will be an EU donation. Alpiq will invest 9 million euros in the project, whereas more than 13 million euros will be invested by them in related environmental protection projects.

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