The former will have 20,000 employees, a market share of over 30% and turnover of EUR1 billion, while the latter will have 7,300 employees, generate about 6% of Romania’s power and EUR233 million revenue, at total costs of over EUR276 million. Both have plans for investments worth more than EUR2.5 billion. Where will they get the money?
“Termoelectrica has been the entity to take over all the losses of the system over the years. Money was pumped into the major energy complexes, which are now doing well and left Termoelectrica, but the losses remained,” explains Florin Marza, former general manager of thermal power producer Termoelectrica. “The first step we took was to spin off the Deva and Paroseni thermoelectric power plants from Termoelectrica.”
Florin Marza is now in charge of establishing Complexul Energetic Hunedoara (Hunedoara energy complex), an entity that seeks to merge the Deva and Paroseni plants (western Romania) with the viable mines part of Compania Nationala a Huilei (CNH, the national company in charge of bituminous coal mining).
“The good mines in Compania Nationala a Huilei are Lonea, Livezeni, Vulcan and Lupeni (southwest of the country). They now have 5,400 employees. The company comprising these mines will merge with the Deva and Paroseni power plants in the third quarter of 2012,” said Constantin Juipan, general manager of CNH.
“The non-viable Petrila, Paroseni and Uricani mines will form an independent company by June 1, 2012. CNH debts will be taken over by this new structure, which will be closed. These mines will close by 2018.”
Complexul Energetic Hunedoara will be a 7,300-employee entity, 1,900 of whom currently work at the Deva and Paroseni plants, which use 99.9% of CNH’s output.
“The annual value of the electricity and thermal power production of Complexul Energetic Hunedoara is EUR223 million,” Marza said.
According to the data provided by Marza, Electrocentrale Deva generated 4.1% of the power used by the country, while Electrocentrale Paroseni generated 1.9% last year.
One of the big problems of this entity are the high costs, as more than 70% of the total are fuel costs. According to Marza, the cost per MWh at Complexul Energetic Hunedoara will be EUR81, which includes buying the CO2 certificates, while Hidroelectrica, which generates the cheapest power, does so at a cost of EUR20/MWh, latest available data shows.
Marza says the entity hopes to be able to cut these costs by centralizing procurement of works, products and services, reorganizing repairs by doing many of its repair projects on its own and by boosting the amount of power supplied by the two thermoelectric power plants.
The data he provided shows that Complexul Energetic Hunedoara can generate sales of power of more than EUR223 million a year, while its costs amount to EUR276 million. Unless costs are cut, the entity will be operating at a loss, which will make it hard to borrow money considering it plans to build new 600 MW and 300 MW generators in Deva and Paroseni and make environmental standards compliance investments.
As for Complexul Energetic Oltenia, it will be created by the merger of the Turceni, Rovinari and Craiova energy complexes and of Societatea Nationala a Lignitului Oltenia (the company in charge of lignite mining in southern Romania). It should become operational next month, according to the latest information provided by the Economy Ministry.
The new entity will account for more than 30% of the electricity generation market, have about EUR1 billion turnover and almost 20,000 employees. Its biggest investment projects include 500 MW generators worth EUR900 million and EUR800 million for Complexul Energetic Rovinari and Complexul Energetic Craiova.
The establishment of the two new companies is a major difference to the initial energy system reorganization plans that sought to create companies that will bring together the cheap power generated by Nuclearelectrica and Hidroelectrica (nuclear and hydropower production companies) and the expensive power generated by thermal power plants.
This would have made sure the various types of power would no longer compete so that the entities thus created would have found it easier to borrow money and could have become regional players in the long run, authorities said.
The plan to build two energy giants, Electra and Hidroenergetica, eventually ended up entangled in a series of lawsuits, so that it can no longer be applied. This means the creation of the Oltenia and Hunedoara energy complexes is the only solution left to reorganize the local energy system for the time being, and plans are for the two entities to be privatized.
(English version by Loredana Fratila-Cristescu)