Although Adrem, a company founded by brothers Adrian and Corneliu Bodea, specializes in metal industry engineering, it branched out into electrical power and heat generation last year, following an about EUR88 million investment in the largest biomass plant in Romania in Suceava.
Things became complicated for the power plant and the decision to stop heat generation was caused by the failure of the Termica SA, the company in charge of heat transmission and distribution in the city of Suceava, to pay for heat delivered.
This is turn rendered Adrem Invest unable to pay its biomass supplier, Austrian-held Holzindustrie Schweighofer, one of the leading wood processing companies in Romania and also one of the shareholders of the project company, Bionergy, that supervised the investment in the Suceava biomass plant.
Adrem Invest’s project is the largest biomass power plant in Romania and started supplying heat last November and electricity this February.
“We’re going ahead with this investment anyway. We have allocated EUR12.4 million alone of our own money. We’re going ahead,” said Adrian Bodea, co-owner of Adrem Invest.
The EUR88 million investment in the biomass plant was partly paid for with a EUR64 million loan from Raiffeisen Bank. Adrem owns 41% in the project company, Bionenergy, while Holzindustrie Schweighofer and RZ Rumanien Beteiligungs GMBH (Austria) own the rest in equal shares. Each of the two investors contributed EUR6 million to the project.
The power plant has a 30 MW capacity for electricity generation and a capacity of 130.5 MW for heat generation.
If no solution is found the Termica SA debt problem, Adrem Invest will consider another step, that is switching the plant to electricity generation only, lured by the green certificate scheme. Electricity generated by biomass power plants gets three green certificates per megawatt.
“The conversion of the power plant would cost us a further EUR10 million. We’re going ahead with it. We made the decision to invest in it when the electricity price stood at EUR54 in 2011. No one had expected the power price to drop to EUR30 and this is not just something that is happening in Romania only, it’s a European thing. However, our motivation does not reside in the price but in the green certificates,” Bodea explained.
Biomass is one of the few clean energy generation segments unaffected by the renewable energy support scheme cut.
Adrem Invest posted 229.6 million lei (EUR52 million) revenue in 2013, 33% higher than in 2012, and RON18.6 million net profit, according to Finance Ministry data. The company set out to attain growth of 30% in revenue this year. (EUR1=RON4.4136)
(English version by Loredana Fratila-Cristescu)