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Complexul Energetic Oltenia

• The biggest integrated mine and coal-fired power plant in Romania;
• established on May 31, 2012 by merging Societatea Naţionala a Lignitului Oltenia with Energy Complexes Turceni, Rovinari and Craiova (i.e.: thermal (coal-fired) power plants, previously called Complexuri Energetice);
• The 4 power plants (Turceni, Rovinari, Craiova I & II) have a total of 12 power units called ‘grupuri energetice’, of which 7 modernized by end of 2014;
• Oltenia’s total installed capacity is 3,900 MW made of: 9 units x 330 MW, 2 units x 315 MW, 2 units x 150 MW spread across 4 power plants;
• Coal mining: CEO accounts for 95% of lignite production in Romania;
• Electricity: CEO could cover up to 30% of domestic electricity consumption;
• currently employs almost 19,000 people, but under pressure to downsize to 14,000;
• Ownership structure: 77% Ministry of Economy, 21.5% Fondul Proprietatea, 0.85% Electrocentrale Group, and 0.4% SC pentru Inchiderea-Conservarea Minelor SA;
• CEO seems to be the only coal-based power producer that has implemented so far projects for flue gas desulphurization and removal of dense slurry of ash and slag resulting from coal combustion. In the past 2 years only (1.06.2012 – 1.06.2014), the company has invested in the following works:
  • 6 wet FGD installations (4 are already operational, at Turceni and Rovinari; 2 are in technical tests stage);
  • electrofilter upgrades at: Unit 3 Turceni, Unit 4 and 6 Rovinari;
  • installation for removal of dense slurry at Turceni;
  • 400 hectares of land reintegrated in agricultural use, 400 more – under preparation;
  • the company has obtained the Authorization for GHG emissions for all their power plants (valid from 2013 until 2020) and the Integrated Environment Authorization for Turceni (valid until 2024);
  • 12.1 TWh (sold in 2014) vs. 10.7 TWh (sold in 2013);
  • Only 46% of the 2014 investment budget (1.49 Bn RON) was carried out due to non payment for coal delivered by clients such as RAAN, CET Govora, Termo Craiova and others;
• Most important modernization projects in 2014:
  • Rovinari Unit 4 (flue gas desulfurization (FGD) system finalized);
  • Isalnita Unit 7 and 8 (FGD system finalized);
  • Craiova Unit 1 and 2 (FGD installation – investment in progress);
  • Turceni Unit 6 and 7 (electrofilter and building the canal that connects desulphurization installation with unit 6 and 7 – investment in progress).

• Oltenia’s IPO (initially scheduled to take place in 2014) has been postponed for 2015, as requested by the intermediary parties, BRD and Swiss Capital, who wanted to have the final report from the National Agency for Mineral Resources (NAMR) on Oltenia’s coal reserves. The evaluation of Oltenia’s coal reserves is conducted by Wardell Armstrong International and Geoconsulting Tg. Jiu and is expected to be finalized in February 2015. The process required more time because NAMR had to approve the declassification of data that shall be included in the report. Next (pre-IPO) steps: preparation of pre-marketing, book-building and roadshow studies.
• LATEST NEWS (February 2015): IMF insists on a “radical” restructuring of Complexul Energetic Oltenia which would leave only 5 power units active (top 5 most efficient ones): 3 units at Rovinari (3, 4, and 6) and 2 units at Turceni (4, 5). The IMF proposal was rejected by the Romanian government, and the topic of restructuring CEOltenia was postponed for April 2015.

TURCENI THERMAL POWER PLANT (TPP)

(7 units of 330 MW each were built: 4 active and 3 closed)

TURCENI was designed to be Romania’s biggest coal-fired power plant (2,640 MW initial projected capacity, 8 unit of 330 MW each), but only 7 units were built (2,310 MW final capacity). Unit 1 was put into operation in 1978, Unit 2 in 1979, and 5 units in each of the following years: 1981, 1982, 1983, 1985, 1987.

Modernization of Units 3, 4, 5. 6 of Turceni TPP was completed in February 2013. It was supported by a 220 million EUR loan provided by the Japan Bank for International Cooperation (2005). Another 200 million EUR loan was provided by EBRD to Complexul Energetic Oltenia in February 2014 for modernization of Turceni Unit 6. Complexul Energetic Oltenia is reported to finance most of its investments through debt finance (bank loans) for which it guarantees with electricity supply contracts. Construction of the all 4 flue gas desulphurization (FGD) installations at Turceni was carried out by AE&E (Austrian Energy & Environment). The investment ensured the reduction of SO_X from 4,000 mg/Nm³ to 200 mg/Nm³ and the dust concentration to less than 50 mg/Nm³. The FGD systems remove 96.4% of the SO₂ and up to 80% of the fly ash from the boiler flue gas. Each boiler of units 3 through 6 is equipped with an absorber unit, and there is a total of two limestone slurry preparation lines for the four boilers. The flue gas SO₂ absorption process produces a gypsum slurry that is pumped out to a subsequent dehydration process. Annually, 15,000 tons of commercial grade gypsum are produced.

ROVINARI TPP

[6 units in total built: 4 x 330 MW (3 active, 1 under modernization); 2 x 200 MW = retired]

ROVINARI TPP now has a 1,320 MW current installed capacity (4 x 330 MW), of which 990 MW operational and 330 MW (unit 5) under modernization. Units 3, 4, 5, 6 were built between 1976 and 1979.

Rovinari Units 3 & 6 are already compliant with the values required by the EU legislation (Directive 2010/75/EU) for emissions in 2016: dust concentration in the exhaust gas is below 50 mg/Nm³ and SO₂ emissions are below 200 mg/Nm³.

Objective: 4 modernized units by 2016 (Units 3, 4, 5, 6) and a new 500 MW (the Chinese unit) by 2017.

CRAIOVA I (ISALNITA) TPP

(8 units total: 2 x 315 MW active, 6 retired)

Final installed capacity at this TPP was 1,035 MW.

Modernization of Units 7 and 8 started in 2010 and was completed in 2014. The investment value for both units: 84 million euros. The modernization of removal system of dense ash and slag slurry was completed and is operational since 2010.

CRAIOVA II TPP

(2 units x 150 MW, under modernization)

CRAIOVA II is the newest/latest built TPP in Oltenia’s portfolio. It can supply electricity to over 350,000 households. The main business partner is Ford Romania, as Craiova II supplies the company heat for technological purposes as well as for heating purposes during winter. Craiova II employs 800 people and is the only TPP that has accessed EU funding for modernization works. The modernization of the removal system of dense ash and slag slurry was completed and is operational since 2010.

Source: CEO

GROSS CONSUMPTION (GCC/kWh)

COMPARATIVE VIEW BETWEEN OLTENIA’s 4 TPPs –

(2012-2014)

Source: CEO

PROGRESS IN REDUCING HYDROCARBON ADDITIONS (%)

COMPARATIVE VIEW BETWEEN OLTENIA’s 4 TPPs –

(2012-2014)

As shown in the 2 graphs above, the most efficient TPPs in Oltenia’s portfolio are Rovinari, Turceni and Craiova II (in that order), and the least efficient is Isalnita (Craiova I).