“We had a few contracts to sell power in 2013 signed at a price of RON240-RON250 per MWh, which benefited us even though the power price fell to RON185 per MWh later in the year. This year, however, we already have 9 TWh of our estimated 15 TWh output contracted for a price of RON184-RON186 per MWh,” explained Laurentiu Ciurel, general manager of CE Oltenia, the profit difference between the two fiscal years.
The decline in power consumption by about 5% in 2013, the good year for hydropower production and the rising wind power output caused a slump in the electricity price. The trend will continue this year, since power consumption forecasts are hardly encouraging.
“We posted an all time output low, 12 TWh, last year. After a droughty 2012 with people telling us every other month that we saved the economy by replacing the hydropower plant production, we woke up to reality in 2013. Around [Orthodox] Easter, for instance, the largest thermoelectric power plants in Romania were closed,” Ciurel said.
“In the second half of the year, wind stopped blowing, rain stopped falling and with the lack of sunlight every 12 hours, we bounced back. We had all our plants up and running in December. This had never happened,” he added.
Out of the RON260 million profit the company posted in January-November 2013, just RON130 million were operating income, while the rest were actually financial income.
When going green leads to higher pollution
Another challenge for CE Oltenia besides the price drop was the ‘flood’ of wind farms. In the absence of facilities to protect the national energy system from the imbalance generated by the heavy fluctuation in renewable power production, load balancing fell upon thermoelectric and hydropower plants.
Romania now has some 2,500 MW of wind farms, almost double the capacity of the nuclear power plant in Cernavoda.
“We had to shut down and restart 29 times in April, for instance. Each such step costs us RON200,000 to RON300,000, which are actually passed on to consumers in the final electricity price. Last year was really crazy. We’ve been polluting more now that we have renewable energy because of this particular way a thermal power plant works,” Ciurel said.
“That’s the paradox. Moreover, wind power is exported.”
Despite Ciurel’s statements, CE Oltenia’s 2014 investment plans include a 10 MW photovoltaic park on an about 25-hectare plot.
“Building one megawatt in a solar farm now costs less than EUR1 million on average. It depends on where you get the technology, of course. We are making this investment to cover our green certificate needs, rather than anything else. The project will be completed this year.”
Another plan, CE Oltenia’s general manager says, is to “plant biofuel crops on 60 hectares and use them for power generation. These investments come at a time when we have to make our ash storage safe for the environment, anyway.”
CE Oltenia was created in the summer of 2012 by the merger of Turceni, Rovinari and Craiova energy complexes with the coal mines of the SNLO (the National Lignite Company Oltenia).
Though thermal power plants were initially supposed to merge with hydropower plants and the reactors in Cernavoda to form entities generating power from a variety of sources, the plan fell through and the only companies created were CE Oltenia and CE Hunedoara. The solution does not address the problem of the system, which is still divided by energy generation sources. (EUR1=RON4.5260)
(English version by Loredana Fratila-Cristescu)