Macedonia: Economy minister says 1.26bn euros to be invested in energy security - BBC Monitoring
European, 29/03/2013
€1,26 billion will be invested in the construction and overhaul of infrastructure projects in the sectors of
electricity, gas, heating, oil, and oil derivatives, according to the projections of the Programme for
implementation of the Energy Development Strategy 2013-2017. "The programme for the Strategy's
realization aims at intercepting all needs of the Macedonian energy sector, creating appropriate
conditions for economic growth," said Economy Minister V. Saraqini.
Energy Development Strategy 2013-2017
Macedonia intends to invest around €1 billion over the next five years to upgrade and expand its power generation capacity,
according to a recently approved program for implementing the national energy development
strategy. The program, which foresees total spending of just over €1.2 billion up to end-2017 in the power and gas sectors, was
approved by the government and published in the state gazette Sluzben Vesnik in early April.
A total of €467 million has been earmarked for projects to be realized by state power producer ELEM, €400 million to be
invested in generation projects based on public-private partnerships and €160 million by private investors. In addition, €110
million is to be invested in the power grid by state transmission system operator, MEPSO, while the government intends to
additionally invest €60 million in the natural gas transport system.
Bitola coal-fired power plant
The focus of state investment will be ELEM’s major asset – the 699-MW Bitola coal-fired thermal power plant in southern
Macedonia that is currently undergoing a major overhaul. Russia’s Power Machines completed in January the first stage of
modernization of the plant, which involved the upgrading of steam turbines and turbogenerators at all three 225-MW units, at an
estimated cost of €56 million.
The upgrade, which began in 2010, raised the plant’s total installed capacity by 24 MW or 8 MW per unit.
The next stage of modernization at an estimated cost of €60 million will involve the modernization of boilers at units 2 and 3,
aimed at reducing NOx emissions and extending their lifetimes. The upgrade of the boiler of the first unit will be carried out at
later. Babcock Borsig Steinmuller, a unit of Germany-based Bilfinger Berger, was awarded a contract worth about €90 million by
ELEM in January 2012 to upgrade all three boilers.
The last stage of TPP Bitola’s modernization involves the installation of a flue-gas desulfurization system and equipment to
reduce dust emissions, at an estimated cost of €200 million. The precise year for this third
stage has yet to be determined.
Modernization of Macedonia’s 125-MW Oslomej coalfired plant, will take place in one stage. The €40 million project will
extend the operating lifetime of the plant, improve its energy efficiency and reduce emissions.
Coal reserves or imports
As the country has limited coal supplies, a key issue for the landlocked state is to secure sufficient long-term coal supplies for its
two principal thermal plants. ELEM is already investing €42 million in the development of
coal fields to ensure the unhindered operations of TPP Bitola. By 2017, ELEM also plans to develop a feasibility study for the
supply of coal to TPP Bitola after 2020. If the feasibility study is positive, ELEM will then invest
€100 million in the Zivojno coal mine until 2022 to secure sufficient coal for its operation until 2030.
As regards coal supplies for TPP Oslomej, ELEM plans to finalize a feasibility study this year regarding coal exploitation from
the Popovjani coal field. If the study proves its feasibility, ELEM will invest €40 million in the new field that will start producing
coal in 2016, thus ensuring sufficient coal supplies for TPP Oslomej until 2024.
Should the study be negative, ELEM could be forced to decommission TPP Oslomej in 2016, which would mean that Macedonia
would have to import 600 GWh per year at an estimated total cost of €700 million until 2030.
An even worse scenario for Macedonian authorities would be the potential closure of TPP Bitola because of insufficient coal
supplies, as the country would then have to import an additional 1.5 TWh per year for each decommissioned Bitola unit. If 225
MW Bitola 1 were to be closed down in 2023, 225 MW Bitola 2 in 2026 and 225 MW Bitola 3 in 2028, Macedonia would need
to import an additional 20 TWh of electricity by 2030.
Skopje gas-fired plans
Macedonia also plans to start construction of two gas-fired combined heat and power plants in the capital Skopje by 2018 at an
estimated combined cost of €250-300 million.
The construction of a 230-MWe, 160 MWth CHP plant near the heating plant TP Zapad, and a 40-MWe, 30 MWth plant near the
district heating plant TO Skopje Sever, would be carried out either as an independent power
producer project or in a public-private partnership. The two projects would also result in the country doubling its natural gas
consumption to 800 million cubic metres per year as the two projects are estimated to require gas supply of 350 to 450 million
cubic metres.
Hydro
In the country's hydro sector, ELEM plans to take out a commercial loan to invest €104 million in the construction of the 68-MW
Boskov Most storage plant which is scheduled to take place between 2013 and 2017.
ELEM also intends to invest €80 million in the construction of the Lukovo Pole hydroelectric system between 2014 and 2018,
which will increase water flow and generation by 160 GWh per year at the 12.8-MW
Vrben, 150-MW Vrutok and 19.2-MW Raven plants and from the new 8-MW Crn Kamen station.
The biggest planned hydropower project in the next five years will be the 333-MW Cebren plant that is expected to take place
between 2014 and 2021. The estimated cost of this project that will be developed in a partnership between ELEM and a strategic
investor under a Build, Own, Operate and Transfer (BOOT) concession is €338 million, according to the program.
ELEM plans to invest €21 million to complete the second stage of revitalization of its large hydropower plants in 2013 and 2014,
while funding the third stage of revitalization of large HPPs and the expansion of Spilje that will take place between 2014 and
2018 with €72 million.
At the same time, the government will prepare for the development of new hydropower stations after 2017, including the 193MW Galiste storage plant on the Crna River in southern Macedonia between 2018 and 2025 and new stations on the river Vardar,
including the 93-MW Veles and 54.6-MW Gradec.
Renewable
The five-year program envisages the commissioning by ELEM by the end of this year of the 37-MW Bogdanci wind park – the
country’s first – in an estimated investment of €55 million and a further 28 MW of wind
capacity entailing investment of €40 million between 2015 and 2017 that will be built by ELEM or private investors.
Skopje also expects private investment in the commissioning of 10 MW of solar capacity by 2017, 10 MW of biomass fuelled
cogeneration by 2020 and 7 MW of biogas capacity by 2017. A further €90 million will be invested by concessionaires in small
hydro stations by 2017.
Grid expansion
In the power transmission sector, MEPSO intends to spend €54.9 million to build three new 400-kV interconnectors, linking Stip
(Macedonia) and Nis (Serbia) in 2013-14, the Bitola 2 substation and Elbasan in Albania between 2013 and 2017 and the Skopje
5 substation and Kosovo between 2016 and 2020.
Another major project planned is a new 400/110-kV substation at Ohrid linked to the Bitola 2-Elbasan line.
Gas
In the natural gas sector, Macedonia intends to invest €58 million in the construction of the Klecovce-Stip-Negotino gas pipeline,
with a branch to the mothballed 210-MW Negotino thermal power plant, between 2013 and 2015.
Clearly, Macedonian authorities are considering switching the mazut-fired plant to gas-firing if sufficient fuel is secured for that
purpose, as was recommended by Macedonia's energy development strategy in January 2009.
This pipeline will be followed by a €60 million investment between 2015 and 2018 in three further pipelines connecting StipStrumica-Greece, Skopje-Tetovo-Gostivar and Negotino-Kavadarci-Prilep-Bitola-Greece.
Macedonia also plan to commission a study in 2013/14 that will explore the possibility of boosting the annual transport capacity
of the country’s existing pipeline from 800 million cu m to 1.2 Bcm, in order to meet growing demand. Macedonia hopes to
secure the added volume of natural gas by connecting to the South Stream gas pipeline between 2013 and 2017.