Serbia Energy Power Gen report 2012
In the same time of regulations and policy harmonization local power generation facilities were modernized up to certain level, coal fired power plants and big hydro power plants modernized their units and increased the energy outputs. So far the electricity price in Serbia was a political and social category. With increasing lack of financial assets the need for electricity prices reform is getting even bigger. Electricity surpluses created by modernized power plants facilities should be offered on the energy market in Europe, these are the conclusions of different managers of power plants. They all understand the market rules but also the fact that lack of money means less maintenance and investment funds, which are desperately needed for maintaining the technological output and security of energy supply. Projections for electricity price in Serbia are showing that increases per phases are expected simply coming as result of logical formula, overhauls and modernization are important in order to secure the supply, create surplus that will be offered on the European markets. For sure the moment for such change in strategy is the right one, as lack of energy is expected due to the closure of German nuclear power plants.
New projects were started, one is for sure a Chinese investment into new power plant of Kostolac and it seems that its not going to be the only one financed by Chinese capital. Another new power plant project of Kolubara 2, strategic partnership of Serbian Electric power company and Italian Edison brought another European giant GDF Suez who acquired Edison recently. The value of the project is estimated at almost one billion euro including the environmental projects. There are still no confirmation from new owner of Edison that the project will run as it was announced.
Second new power plant project Nikola Tesla B3 is still on hold waiting for strategic partner. Considering the intention of the Serbian EPS and Government, including the statements of the officials, preferred partner could be found in German companies. RWE already made footprint on this PPP project that may start next year if all parties come to an agreement, recent visit of high level German delegation lead by PM, Ms.Merkell could be a trigger point. The new 700 MW unit owner would be a foreign strategic partner, shares would be divided to foreign owned major shareholder and EPS as minor partner in the project.
The question of coal supply for all existing and new projects in the pipeline is clarified and enhanced with new Kolubara mines European credit line allowing the mining company further expansion of fields and securing the coal supply for next 25 years. All modernization cycles including the overhauls and investment projects on biggest Serbian power plants TENT (Nikola Tesla Power plants Obrenovac, Serbia) already attracted the attention of big European power generation companies. Since 2002 and the beginning of the modernization cycle many companies came to Serbian market. The reason was of course the ongoing investment budget that was supported by a number of European donations given for last several years. Just a modernization of one unit A6 on TENT had the value of 100 million Euros, not to mention other smaller overhaul projects. All this power generation facilities upgrade projects attracted companies like Alstom, Doosan Babcock Power, Siemens, Rafako who gained several projects. Local companies shown that they could be reliable partners to big European giants, as local partners and subcontractors. Environmental projects of smaller scale that were realized on the power plants also attracted and brought other European giants, however the new race is about to start soon. New 250 mil euro Flue Gas Desulphurization project on TENT will bring not only already interested European companies but also Japanese technology groups like IHI Corporation, Mitsubishi, Chyoda and others. The FGD TENT project will be financed from Japanese loan, but the tender will be open and all interested companies from Europe, USA and Asia would be able to submit their offers for equipment and technology. The race for market positioning for all environment business companies started already. Only this environmental project will bring additional added value to increase of competition in Serbian energy and power generation industry. Such new market changes are absolutely in accordance with recommendations coming from Energy community regarding the reforms and competition levels in energy market in Serbia.