Serbia, report: Overhauls and modernization of TPPs and HPPs, loans and bilateral state arrangements

Published on 29. April 2014., News Serbia Energy

Adequate and reliable electricity supply is the cornerstone of every modern society. Due to the strict conditions that Serbia must fulfill in order to be one step closer to the European Union, it is necessary to adjust the energy sector to European environmental standards (one third of total EU legislation relating to the environment). And this requires huge investments, primarily in the modernization and rehabilitation of existing thermal power and hydropower plants. In the EU accession process, the importance of foreign investment is huge for Serbia. Demand for electricity grows, and we need to provide the state energy stability, but also to meet strict environmental principles, which EU sets us in the path of accession.

The minister, prof. Dr. Zorana Mihajlovic, recently announced that 10 billion EUR was planned to be invested in the next ten years in the energy sector and environmental about.

There are actually a number of significant projects for the revitalization and modernization of existing power plants.

In the Subsidiary Company “TE -KO Kostolac” has begun the revitalization of unit B1. Revitalization of unit B1 is one of the projects of the First phase of an international loan arrangement with the People’s Republic of China, started in early March in TPP “Kostolac B”. The reconstruction of this unit should contribute to increase his life expectancy for 20 years. After modernization, the thermal unit will contribute to greater energy and environmental system stability, reducing the number of outages, an increase in power and energy efficiency. So far, the revitalization of unit B2 in “Kostolac B” has been completed, and besides revitalizing the unit B1, follows the construction of new desulphurization system.

In the thermal power plant “Nikola Tesla” in Obrenovac, this year will begin major overhaul of Unit A3, worth about 70 MEUR. The plan is that overhaul begins on 1^st June and should be completed by December this year. Overhaul of unit A3 is the most important job in the Subsidiary TENT during this year, at which, within six months, how much will be disconnected from the network, will be made ​​extensive surgery. The construction of desulphurization system in TENT A is planned at the units A3, A4, A5 and A6, by which will be reduced air pollution. This is a very important and expensive environmental project within PE EPS which has been implemented in Serbia for the first time, for which the Government of Japan provided significant loans in the amount of 250MEUR. Its implementation will significantly improve environmental conditions and reduce emissions of sulfur dioxide in the air.

Let us recall that Serbia, as a member of the Energy Community, has the obligation to implement EU directives in the field of renewable energy sources. Objectives 20/20/20 in energy sector predict emission reductions of 20%, increasing energy efficiency by 20 percent and the latest directive obliges member states that renewable energy should make 20 percent of total spending by 2020^th.

Serbia has significant untapped hydropower potential and investment in hydro energy are cost-effective in many aspects – in terms of meeting environmental requirements, as well as in terms of providing sufficient quantities of electricity from renewable energy sources. As it is necessary to invest in the construction of new hydro facilities, so are very significant investments in the reconstruction of the existing hydropower plants.

Revitalization of the largest hydropower plant “Djerdap” is carried out in cooperation with the Russian company “Silovije mašini”. It is planned that all six units would be realized by 2018^th, and in addition that power system will get another 90 megawatts to the existing 1.058 megawatt. The investment is 216.5 million dollars.

European Bank for Reconstruction and Development (EBRD) currently participates in the revitalization project of 15 small HPPs and the construction of seven new small HPPs on the existing water supply facilities. The value of the contract (EBRD and EPS) is 1.3MEUR. The installed capacity of small hydropower plants will increase by 30 percent with the revitalization.

The EU has donated about 555MEUR in Serbian energy sector since 2000^th, investing primarily in emergency repairs and works, then in power plants, mining, overhauls of the transmission network and modernization.

Overhaul and modernization of power and hydro plants will ensure not only the state stability, but also an energy path that Serbia must follow in order to meet all strict requirements for environmental protection and in that way  to be closer to European countries. Chapter 15, in negotiations with EU, related to the energy sector is very demanding and it is crucial for Serbia’s progress towards EU accession. It is necessary fast and efficient implementation of the Energy Strategy and the adoption of amendments to the Energy Law, which will adjust it to the third package of EU directives and compliance with obligations under the Energy Community. The new regulation will contribute to creating a favorable climate for foreign investment and potential partners in future projects.

Source; Serbia Energy