Serbian TSO transfers the management of substations to DSO companies, investment and modernization cycle ahead is a new market opportunity, an analysis of potentials

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The final stage of preparations for the takeover of 110 kV substations from PE EMS is underway. Technical issues concerning the takeover are mostly resolved. − It is not clear how to treat the assets. – EDB has announced the plan to reconstruct every year one of the eight 110/35 kV substations taken over from EMS.

By January of the upcoming year PE EPS, i.e. the distribution companies under its umbrella, should take over all substations with 110/35 kV voltage level from PE “Elektromreža Srbije” and encompass them into the electric power distribution system that EPS will manage in the future. This obligation has come from the new Energy Law, which, among other things, defines where the separation point between the transmission and distribution system operators in overall electric power system of Serbia will take place. According to our information, the separation will soon be finished and the whole process will be completed within the legal time frame. Whether it will be really possible, depends on many factors, but most of them emerge from the complexity of the processes and procedures that follow the takeover of high-voltage facilities. Consequently, it seems that legal and economic aspects are causing more problems than technical concerns.

Concerned distributors

A few months ago, joint commissions of EPS and EMS checked out the state of the substations which are going to be put under control of EPS and the Institute “Nikola Tesla” conducted a study on the ’’Assessment, test, analysis and evaluation of the technical readiness of the equipment, devices and installations in 110/x SS that will be taken over from EMS to EPS’’, so that the technical conditions of facilities have been mainly defined by now. Also, the joint commission of the two companies, headed by Nenad Mraković from EPS and MSc Gojko Dotlić from EMS, concluded earlier this year that it was not necessary, after last year’s inspection, to reassess the situation on site and review the conditions for taking over the substations and transmission lines with voltage level of 110 kV.

However, the distribution companies within EPS are expressing a heavy dose of caution in relation to liabilities and responsibilities that come along with 110kV substations, given the current state of affairs. This issue was often on the agenda at the last year’s meetings of the directors of the business concern ED and there was an impression that it brought more attention than the separation of a former “Elektroistok” (transmission operator) from EPS. In July 2005, after the adoption of the Energy Law, harmonized with EU directives, there were serious disagreements in both Electricity Distribution Department of EPS and “Elektroistok”. The other companies within the system of EPS didn’t interfere in this case of separation and not without a reason. The model for the establishment of EMS was initially based on the developed electric power systems in Europe and had to be followed in details. But even in founding members of the EU there are cases when transmission operators are not detached from the national company. PE EMS thus became the most successful company in the electric power system of Serbia, and could use a brand new Dispatch center of EPS, as well as all new high-voltage substations, switchgears and transmission lines.

Now is the time to deal with the 110kV level. Distribution companies within EPS have

a certain number of such facilities but they will have to take charge of about fifty EMS substations of the same voltage level. The discussions about whether it should be done ended last summer after the adoption of the current Energy Law. The concern that existed at the beginning of the process has not yet disappeared. Most substations that are to be inherited by distribution companies are old (some of them are more than 40 years old) and their maintenance has been neglected, especially since the stories about takeover emerged.

Contractual relations

Joint commission of EPS and EMS recently concluded that the technical issues of the takeover were mostly resolved. The uniform contracts on maintenance of facilities and the agreements on their exploitation should be formulated by the end of the month and signed by EPS (BC ED) and EMS. Mraković says for our magazine that it was also concluded that “Elektrovojvodina”, “Elektrodistribucija Beograd” i “Elektrosrbija” are to a great extent ready to take over control and management of the 110kV SS and that “Jugoistok” from Niš and “Centar” from Kragujevac will find a solution in cooperation with the responsible departments from EMS.

However, both control and management are related to the equipment and technology where things are pretty clear. The confusion arises over the status of the property which has to be transferred or taken over. What is the best way to distinguish the objects that are located next to the substations but are not directly connected with electric power transmission, such as the employees’ flats or similar buildings? Another unsolved issue concerns the contractual conditions for the employees of EMS that have been working at substations. The representative labor union is seeking that they should obtain the positions in accordance with their qualifications and the salaries of not less than those they have in EMS, which are higher than in any other distribution company of EPS. All these details have still to be agreed. As to the issue of ownership, i.e. the transfer of exploitation rights, the ministries in charge were asked for help because the Law on Public Property doesn’t treat the ownership of distribution network. It is not clear whether the exploitation right will stay in place or the state will otherwise regulate this issue.

The joint team of EPS and EMS comprises around 30 members from all departments of both enterprises. In addition to engineers, there are economists and lawyers, but the ambiguities are beyond their scope. After all, “the one who passes the law should also interpret it”. Hence, the ball is in the court of the authorities, which are expected to answer these and similar questions.

A package full of liabilities

How does it all look like from the perspective of one distribution company from EPS, we asked Goran Radovanović, a manager of the so-called “High Voltage” unit in “Elektrodistribucija Beograd”. He said that EDB as well as other distribution companies under BC ED would follow all recommendations and suggestions from the authorities regarding the issues such as ownership, exploitation right and construction of illegal buildings next to the substation or above it. Most of all, according to him, EPS and EMS must find a common solution.

– EDB should take over eight substations of 110/35 kV. Irrespective of the solutions and agreements concerning this transfer, it is clear that EDB along with the facilities is getting a whole range of technological, organizational and financial problems, which will have to be resolved in the next ten years. According to the Plan of Distribution Network Development by 2022 of EDB (which is also the plan of PE EPS), one of these substations is to be reconstructed each year, at the cost of 150 million dinars per station, calculated on the basis of the current level of prices. Why do we need such a reconstruction? In distribution, SS 110kV are intended to supply consumers within a limited area. Transmission substations of type 110/x are designed differently, use specific equipment and require different organization of control and management in comparison to distribution substations. In EMS, these are intended to transfer power within a larger area, which means that on the one hand they serve as a kind of “bridge” of transmission at a voltage level of 110kV while on the other they function as the source of supply for certain lower voltage levels – Radovanovic said.

He also said that EDB own 16 distribution substations of 110kV which are controlled and managed remotely from the Dispatch center in Slavija. The maintenance is performed by 53 employees of the unit “High Voltage”, who also service 65 SS of 35/10 kV. This means that EDB doesn’t have enough personnel to work in additional substations. In fact, Mr. Radovanović recalls that it is not yet clear whether the employees of EMS, which are supposed to be employed by distribution companies of EPS, would accept to work for EDB under offered conditions which should be consistent with the organization and systematization of jobs and assignments at “Elektrodistribucija Beograd”.

– Three working groups, established by the Joint commission of EPS and EMS (the first for checking the condition of equipment and documentation, the second for supervision and management, and the third for signal and command transmission), have highly responsible and complex tasks. In terms of supervision and management, for example, the distribution centers of EMS and EDB are interconnected and we are able to trace the 35kV side, but not the entire operation and power flows of the facilities that we have to take over. When those 110kV distribution substations get into our system, the existing concept of management would not be relevant in the new circumstances and would have to be changed. But this is just one of the segments which must be clarified − said Radovanovic.

Clear provisions

Last winter there were the warnings from “Elektrodistribucija Beograd” of the fact that in the demand area of the city of Belgrade operate the 110/35 kV substations whose equipment is obsolete and has long exceeded its working life and it is therefore very important to carry out this takeover with the utmost responsibility. It was also pointed out that responsibilities of those who would be entrusted with the maintenance and exploitation of facilities, including their reconstruction and replacement, should be clearly defined.

Source Serbia Energy Magazine