- Short Term Issues in the Energy Community CASE STUDIES 2005 crisis, Albania Closure of the NPP Kozloduy (Units 3-4), Bulgaria August 2006 energy supply crisis in KEK, UNMIK August 2006 cut off power in ESM Distribution, The former Yugoslav Republic of Macedonia - prepared by ECS - 1
- Short Term Issues in the Energy Community Case Study: Albania s s 2005 crisis GENERAL CHARACTERISTICS OF THE ALBANIAN POWER SYSTEM No new generation power plant since 1986 Major electricity crisis since the summer of 2000 Huge demand for electricity 98% generated domestically in the HPPs Reliance on the fluctuating generation from the HPPs Internal balance difficult due to a low percentage of the TPPs Limited capacity of the HPPs and the lack of adequate transmission interconnection lines In 2005, residential consumption of electricity rose by 8% from the previous year Since 1991, household consumption levels have risen by 500%, while Albanian capacity to generate energy decreased by 14% - prepared by ECS - 2
- Short Term Issues in the Energy Community Case Study: Albania s s 2005 crisis ALBANIAN ELECTRICITY CRISIS IN THE 4 th QUARTER OF 2005 Situation changed dramatically through 2005 Electricity target for 2005: total demand 6.64TWh/year, total domestic generation 5TWh/year, total import 2.25TWh/year and load shedding 0.34TWh In 2005, max. peak demand 1254 MW, total gen. capacity 1364 MW Percentage of reserve: 13% in January, 57% in July In the first 6 months the export-import balances around zero Due to serious droughts its imports constantly increasing from July Serious load shedding in the last quarter of 2005 (20% in Oct/Nov) Reasons: insufficient transmission network capacities and insufficient amount of offered energy in the region in these months - prepared by ECS - 3
- Short Term Issues in the Energy Community Case Study: Albania s s 2005 crisis ALBANIAN ELECTRICITY CRISIS IN THE 4 th QUARTER OF 2005 KESH extended mandatory blackouts for both urban and rural areas In some places, as many as 18 hours daily without electricity In the capital city of Tiranë, neighbourhoods experienced 10-12 hours Business owners operated back-up generators at a high level This was a major expense in a low margin business The crisis decreased Albania s annual economic growth rate from 6% to 5.5% in two months alone Counter-measures relating to mutual assistance included transferring to Albania some of the electricity the Former Yugoslav Republic of Macedonia imports from Greece, and releasing more water from Lake Ohrid into the Black Drin River in Albania to boost production at hydro plants in Albania - prepared by ECS - 4
- Short Term Issues in the Energy Community Case Study: Albania s s 2005 crisis RECOMMENDATIONS Only a few operational/planning measures could be envisaged: conservation of water levels in reservoirs, and careful planning to secure imports to help alleviate consequences of serious droughts Among infrastructural projects, the most important ones are: TPP Vlora with a generation capacity of 1TWh/year New 400 kv Tirana substation 400 kv OHL Elbasan Tirana Podgorica (conn. to Montenegro) 400 kv OHL Vau i Dejes Prishtine (connection of Albanian hydro generation portfolio with the UNMIK s thermal one and thereby opposite power exchanges in winter/summer seasons) New National Dispatching Centre in Tirana Promotion of more feasible energy sources (i.e. gas) for heating The UCTE membership and the Mutual Assistance (Procedural Act) - prepared by ECS - 5
- Short Term Issues in the Energy Community Case Study: NPP Kozloduy,, Bulgaria CLOSURE OF THE NPP KOZLODUY (UNITS 3-4) 3 Bulgaria: The largest exporter in the SEE region In 2005, the net export amounted to 7.5 TWh (source: UCTE) Units 3-4 (440 MW each, 880 MW combined) can generate 7 TWh/year approximately Units 3-4 will be closed by the end of 2006, following an agreement with the European Union Exports will drop to 1.5 TWh compared to this year record 9 TWh (source: BTA, recent statement of Mr Ovcharov, Bulgarian Minister of Economy and Energy) Present electricity exports are worth some 350 million Nearly 5% of all Bulgaria s revenue from export - prepared by ECS - 6
- Short Term Issues in the Energy Community Case Study: NPP Kozloduy,, Bulgaria REGIONAL SIGNIFICANCE OF THE CLOSURE The closure of Units 3-4 of NPP Kozloduy has a regional importance, given the number of importing countries Estimation: Bulgarian export of 7 TWh/year covers approximately 50% of the electricity shortage in the neighbouring countries UCTE System Adequacy Forecast 2006-2015 pointed out: Imports from Romania+Bulgaria block would help to balance the situation in JIEL+Greece block, but it might change after the closure. - prepared by ECS - 7
- Short Term Issues in the Energy Community Case Study: NPP Kozloduy,, Bulgaria THE FIRST POSSIBLE IMMEDIATE CONSEQUENCE IN 2007 Existing power plants might likely increase their load factor, if they are not being operated at full capacity Example: TPPs Bobov Dol and Varna Kept mostly on cold reserves due to requirement to have more than 1200 MW reserves (two nuclear units of 1000 MW each) TPP Varna has operated at 25% of its capacity for the last years TPP Varna was recently privatized and the new owners might wish to sell energy, not just being paid for cold reserves Being so, TPP Varna might be expected to sell more energy The lack of published information by TSOs/GenCos makes it difficult to quickly assess the unused capacity Need to know exactly the reserves especially by putting them in the context of maintenance of coal-fired power plants - prepared by ECS - 8
- Short Term Issues in the Energy Community Case Study: NPP Kozloduy,, Bulgaria THE SECOND POSSIBLE IMMEDIATE CONSEQUENCE IN 2007 The closure might lead to a price variation The level of variation depends on the new capacity that could be made available and vice versa Power plants might increase production if the price increases Not only generation in the SEE region might be affected, transmission as well as new importing routes are to be found Recently, the World Bank study pointed out that the price increase could seriously affect the countries with lack of power production facilities The largest price increases are expected in the former Yugoslav Republic of Macedonia, Albania, Bulgaria and Serbia - prepared by ECS - 9
- Short Term Issues in the Energy Community Case Study: NPP Kozloduy,, Bulgaria RECOMMENDATIONS The key need: updated information on system adequacy in the SEE region The Athens Forum Chair to invite SETSO/UCTE at the next Athens Forum to evaluate new scenario (without Units 3-4 of the NPP Kozloduy) Expected outcome: recognition of the new capacity that might likely start production versus price levels In the short term: Parties to agree on the Mutual assistance measures Stress the need: TSOs/GenCos to publish the data under the Transparency Guidelines - prepared by ECS - 10
- Short Term Issues in the Energy Community Case Study: KEK, UNMIK ENERGY RELATED SITUATION IN BRIEF Current energy related situation is a result of: the technical situation in the power plants, including coal production the lack of investments and the non- payment of electricity bills 700m already invested ( 200 million for energy import, 200m for repair of Kosovo B lightning strike and 300m for KEK in general during the last six years) Need to invest 700m to 800m until 2010 in coal production, power generation and distribution ( 230 million needed for the mine of Sibovc over the next two years) Kosovo C major new generation project to serve domestic and international markets - prepared by ECS - 11
- Short Term Issues in the Energy Community Case Study: KEK, UNMIK AUGUST 2006 ENERGY SUPPLY (source: www.euinkosovo.org) Only 320 MW being produced in the A3 and B2 units Bulgaria declined KEK s request for energy imports Attempts to get emergency power from the neighbouring countries, where the demand is high as well, were not successful The available power sold to the coastal countries in the region where the summer tourism has started KEK officials made no statement, ESBI is transferring competencies, and therefore they do not have the right to talk to the media Spokesperson of the Government: not to blame Government for the energy crisis as it is not in its hands to adjust or supervise the supply Deputy Minister of Energy and Mining (MEM): KEK management is to be held responsible for the situation in the energy sector. The Ministry has no competences to manage this situation - prepared by ECS - 12
- Short Term Issues in the Energy Community Case Study: KEK, UNMIK AUGUST 2006 ENERGY SUPPLY (source: www.euinkosovo.org) Statement of UNMIK Pillar IV Chief, Mr J. Ruecker, on the energy situation: It is a known fact, however, that KEK has no reserve capacities, neither in coal production, nor in generation, nor in distribution. If something happens in one of the key divisions this results directly in power cuts. The reason for this is that KEK, despite significant support from donors and KCB, does not have the money to fully repair and maintain a very deteriorated infrastructure. This situation will not change if people continue not to pay for or steal electricity. - prepared by ECS - 13
- Short Term Issues in the Energy Community Case Study: KEK, UNMIK RECOMMENDATION Statement of UNMIK Pillar IV Chief, Mr J. Ruecker, on the energy situation: Changing the payment culture in Kosovo is a prerequisite for the implementation of the joint strategic plan Customers, including business, owe KEK about 300 million The strategic plan aims to: attract private investment, open a new coalmine, rehabilitate old generation units as feasible and build a new power plant independent from KEK - prepared by ECS - 14
- Short Term Issues in the Energy Community Case Study: ESM Distribution, The former Yugoslav Republic of Macedonia AUGUST 2006 CUT OFF POWER Not directly the Security of Supply related problem in the short term ESM Distribution started with disconnection throughout most of Macedonia since 7 August, 2006 State institutions, including some ministries and courts, the General Staff, the largest Army barracks "Ilinden" and many public enterprises, street lighting in many cities, but also schools and cultural institutions like drama and movie theatres ESM Distribution was acquired by Austrian Company EVN AG in April 2006 (225 million euros for 90% of the company having 700,000 customers, 4.33 TWh/year) - prepared by ECS - 15
- Short Term Issues in the Energy Community Case Study: ESM Distribution, The former Yugoslav Republic of Macedonia AUGUST 2006 CUT OFF POWER EVN spokeswoman Lence Korpuzovska to the Associated Press: It is not the company s job to consider the social aspect of power cuts. It is up to the government, if it is willing, to cover part of the bills for the poor. Debt of ESM Distribution towards MEPSO, and thus indirectly to ELEM, has reached 30 million Euro Regulator approved raise of electricity price - prepared by ECS - 16