Complexul Energetic Oltenia has just initiated a EUR220 million project, out of which EUR193 million come from the EBRD, to retool Turceni, Romania’s biggest thermo power station.
Despite the money being invested in the field, there is one truth: a MWh of energy generated from coal can never compete with one generated by a hydropower station or a windmill, which bank on state subsidies more than on their own forces. What is the solution?
“The electricity generated by Mintia and Paroseni thermo power stations in the five months of 2013 (August-December i.e.) stands at 1,428,404 MWh (2.4% of total energy output i.e.) and we want at least to keep the same pace of output in the future,” say the representatives of Complexul Energetic Hunedoara.
According to available information, at least on the regulated market, namely for the population, Complexul Energetic Hunedoara gets 271 lei/MWh, more than any other energy producer. For instance, Hidroelectrica gets RON125/MWh. Theoretically, this price set by the energy watchdog (ANRE) must cover energy producers’ costs and ensure a minimum profit margin for them.
On the free market, though, nobody cares about costs and on this market, with the current costs, Complexul Energetic Hunedoara cannot survive as the latest deals were sealed at a price of RON166/MWh.
However, the representatives of the company, the only energy producer in Romania using pit coal, say they plan several investments set to improve the technical performances of the two thermo power stations in the portfolio. However, investments will largely be aimed at complying with environment standards.
Total investments amount to EUR355 million. The company secures around 5% of Romania’s energy output, having an installed capacity of 1,225 MW. At first sight, the contribution could easily be replaced with other sources. Nevertheless, such a decision would lead to the suspension of coal mining activity and the disappearance of 7,000 jobs.
The other major thermo power structure operating in Romania, Complexul Energetic Oltenia, has lower costs, of RON170/MWh, but still cannot cope with competition coming from Hidroelectrica or windmills.
In the past 5 years, over a billion euros have been poured into the thermo power stations making up the company, with half of this sum being in fact environment projects.
In early 2014, the company announced it would embark upon an investment project worth EUR220 million, due to be completed in four years. Investments are aimed at the revamping of a 330 MW group of Turceni, Romania’s biggest thermo power station.
Around 30% of Romania’s power output is based on coal. People in the field say there is still enough pit coal for another 50 years. Over 90% of Romania’s pit coal deposits are located in the area of Oltenia.
“We provide stability to any energy systems for many years to come. At present, the Romanian energy industry cannot do without coal,” said Laurentiu Ciurel, general manager of CE Oltenia.
The problem is that irrespective of the investments these companies make, it is hard to believe that there will come a time when coal energy production will be cheaper than hydropower or nuclear power.
While most European states have energy companies based on a production mix, Romania still have a fragmented system and the listing of all major state-owned energy producers renders their merging up almost impossible.
Domestic consumption is still declining, and so are prices, hence it is ever harder for thermal power to find its way on the market.
Strengthening export capacities is a solution for all this energy to find a final client. On the other hand, the fact that during droughty years thermo power is the one generating electricity to households must not be forgotten. Moreover, for this type of power reserves are enough for another 50 years. Not the same happens with natural gas, oil or uranium.
(English version by Catalina Apostoiu)