Montenegro: Financial breakdown of coal and environment investments needed for new TPP Pljevlja unit contracted to CEZ Skoda

6. July 2015. / SEE Energy News

The Investments of Coal Mine Pljevlja in the opening of new coal deposits and investments in land re-cultivation and the environment protection, which should be implemented within the overall project of the second unit of Thermal power plant Pljevlja (TPP Pljevlja), would amount at least 227 MEUR, of which 145 MEUR for investment costs and 82 MEUR for environmental re-cultivation and protection, according to the information currently available to the Research Center MANS.

The costs of new mines opening and land re-cultivation and environmental protection on the basis of coal exploitation in general are not included in the total investment value, despite the fact that the project of building a new unit is entirely based on the significant increase in coal consumption in Pljevlja.

Namely, the DPP draft of TPP Pljevlja is projected that the second unit would completely exhausted coal reserves for 40 years long operation from the so-called inner basin of Pljevlja, which includes locations Potrlica, Kalusici, Otilovici , Bakrenjace, Mataruge and Glisnica by the end of the operation of existing unit of TPP by 2024th. By planning document the total coal reserves at these locations are estimated at around 70 million tons.

However, a precondition for the construction of the second unit is practically doubling the current capacity of the coal mine, especially in the period of parallel operation of two units. The higher capacity of the mine will require considerable investment costs primarily for the expropriation of land in new locations planned for coal mining, the development of new deposits, the purchase of machinery and equipment, and development of necessary infrastructure.

According to the document “Techno-economic assessment of thermal power potential for coal supply of TPP Pljevlja” of June 2013th, total investment costs for new mines are around 145 MEUR, of which almost half of the sum goes for the site Potrlica, i.e. 64 MEUR. Investments in the locality Kalusici are planned in the amount of 30 MEUR, 12.2 MEUR for Otilovici, 9, 8 MEUR for Bakrenjace, 20 MEUR for Mataruge and 7.7 MEUR for Glisnica.

At the same time, almost 37 MEUR of the total investment cost of 150 MEUR were designed for the expropriation cost; of which Potrlica over 6 MEUR goes to 10 million Kalusici, 1.9 MEUR to Otilovici, 5.7 MEUR to Bakrenjace, 9.7 MEUR to Mataruge and less than two MEUR to Glisnica.

On the other hand, according to the Law on mining, re-cultivation costs of exploited land would have to be included in the total investment. When, in 2010th, the Coal Mine brought the amended project for the exploitation of the surface mine Potrlica for the period until 2014th, in order to obtain a permit for the coal extraction in the amount of 7.650.000 tons, the average costs of environmental protection and re-cultivation was calculated at 1.17 EUR per ton of coal, which provided a total amount of 8,925,000 EUR for the specified coal amount.

Of this amount 7.3 MEUR was planned for the actual protection of the soil and re-cultivation of open pit mines, landfill and quarry, 300 thousand for the water protection, only half a million for air protection, and just over 600 thousand for other costs. According to the financial statements of the coal mine, although the company earned from the ore exploitation in this period, the planned money was never invested in the land re-cultivation and environmental protection.

If precisely the price of 1, 17 EUR for re-cultivation cost and the environment protection per ton of coal (although the real price in the meantime is probably higher) is calculated on the projected amount of 70 million tons, which will be necessary for the operation of the first and second units of TPP Pljevlja, it leads to the sum of nearly 82 MEUR, how much would have to be further included in the total cost of second unit project of TPP.

It is unacceptable that DPP drafters did not display these costs, by which the economic analysis of the project viability of building the second unit was put into question, but they were apparently led by the fact that state tolerated Coal Mine and EPCG to drastically destroy life the environment and the lives of citizens in Pljevlja for years, and not to pay for that.

DPP draft for TPP Pljevlja display the total investment cost for the construction of the second block of 366 million euros, which apply only to the construction of energy facilities. However, it does not include a range of costs, interest income, cost of land acquisition, revitalization of the existing TPP, construction of new dumps and landfills, over the cost of opening new mines, to expenditure on environmental protection and human health.

It is already clear that economic feasibility of the entire project is questionable, and that the actual costs for the implementation of second unit in TPP will exceed one billion EUR, whereby the financing model still is not known. Electric Power Industry was recently elected the offer of Czech company Skoda as the first ranked, which offered the price of construction of 338.5 MEUR.

Ministry of Sustainable Development has announced a public hearing in late May, and today’s round table in Pljevlja is the only one that will be organized. The timing of the roundtable comes after more non-working days in the country, and the fact that the Ministry has not announced a public hearing, nor bothered to announce anything about this project until today, attest that the process want to be ended up with as little public presence as possible.

Also, all relevant documents on the basis of which has been made the project economic analysis are hidden to date, which further undermines the transparency of the entire process and shows that public hearings usually is feigning and farce, in order only to meet a mere form, and hid the essence and the project cost of TPP construction from the public.

From DPP draft cannot be concluded that there will be new employment in the Coal Mine, the company that had 1,922 employers at the end of 2003rd, and today about a thousand, meaning that the number of employees is halved.

The situation is similar when it comes to hiring in the second block of TPP, which will count from 50 to 100 people, which is considerably less than in the current unit. This is explained by the application of new technologies that will be applied and that, as such, require fewer employees. , transmits Serbia-energy.eu

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