Montenegro: The second unit of new TPP Pljevlja will not be cost effective?

3. April 2015. / SEE Energy News

Montenegro cannot afford to spend money that does not have for energy facilities that will not be profitable claim local and regional environment protection experts.

Electricity production from the second unit of the thermal power plant in Pljevlja will not be profitable and that is probably the reason why the Italian partner in Electric Power Industry, the company A2A, does not want to build, said an expert in energy international organization CEE Bankwatch Network Pippa Gallop.

This organization conducted a survey with the University of Groningen and consulting company Advisory House on the subject of what would happen if all the countries of the Western Balkans build energy facilities which are planned.

The conclusion is that for 10 years the region would have 56 percent of electricity excess that could not be sold because the nearest EU countries, as well as close countries out of it such as Ukraine, also have enough electricity for themselves.

Montenegro would have an excess of two thousand gigawatts if builds all the planned energy facilities – the second unit of the thermal power plant and hydropower plants on Komamica and Moraca. In this scenario they did not reckon that the Aluminum Plant will work in 2024th, but also if it worked, there would be a surplus of energy, but smaller.

Gallop said that Western Balkan countries must better collaborate and commonly brainstorm energy policy in the region in order not to spend money they do not have on the power plants that they will not need or that will not be cost-effective.

“I think that the regional governments have an old-fashioned thinking that it should be produced as much electricity, and at the same time not to deal with the analysis weather they will have to whom to sell it when all these power plants be built for several years “, said Gallop.

The Government of Montenegro and the countries of the region hope that they could sell their future electricity surplus in Italy via underwater power cable between this country and Montenegro, which construction officially began in late January.

“When this cable planning began, Italy had a lack of energy especially those from renewable sources, in order to meet EU standards in this area. However, the situation in the country has improved now; there is no lack of electricity and domestic production of electricity from renewable source especially the solar ones significantly increases. Italy could import electricity from the Balkans in the future only if its price was significantly lower than those at which they produce their electricity”, said Gallop.

Electricity from thermal power plants already is not competitive, and when Montenegro and other Western Balkan countries join the EU, there will be even more expensive due to the payment of allowances for carbon dioxide emissions.

Government and A2A still have not agreed on whether to build a second unit. EPCG Commission supposed to choose a preferred bidder by the end of April. In the competition for the potential construction of the second unit remained Czech Skoda and Chinese CMEC.

“According to government documents, megawatt hour from TPP Pljevlja costs 65 EUR, while the megawatt can be bought for 35 to 40 EUR on the market now. There is no way that Italy would buy power in Pljevlja at those prices”, said Gallop.

She states that the government expects to pay a quota of five EUR for the emission of carbon dioxide tone from the new unit, but it is likely that this will amount much more so even to 30 EUR for the produced ton of this dangerous gas that produces the greenhouse effect and causes global warming.

“With the planned production, this would amount to 40 MEUR per year, which would certainly increase the electricity cost, made its sale more difficult and probably would not be cost-effective. The EU has introduced payment for carbon dioxide emission precisely in order to reduce electricity generation from the coal in the future”, Gallop stated.

Waste of money – the corruption possible reason

When asked why countries in the region plan to build several power plants, Gallop said that the possible reason, besides the old-fashioned thinking, could also be the corruption.

“Corruption is a possible reason. There is no evidence for it in certain cases, but it is ever-present possibility in the region. We have to ask why the Government of Montenegro now is so desperately persistent to build another unit of TPP, when it is large amount of money which the Electric Power Industry does not have and must take great credit. If the energy policy would be better planned this source would not be necessary”, said Gallop.

She said that Montenegro loses 480 gigawatt hours in the distribution network per year, and in the transmission one even more 142.

“By reducing these losses and better energy efficiency policy, there could be made significant savings and new large sources of electricity would not be necessary, especially when they do not use coal”, said Gallop.

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