MR. ROVČANIN: WITHDRAWING FROM THERMAL POWER PLANT WITHOUT AN ALTERNATIVE SOLUTION LEADS TO DELIBERATE LIQUIDATION OF ENERGY SECTOR
Mr. Nikola Rovčanin, CEO of Elektroprivreda Crne Gore (EPCG), in the interview for the daily newspapers VIJESTI, said that in case of failing to implement the project of ecological retrofitting, the operation of thermal power plant Pljevlja (TPP) would be stopped and the state would remain without 1.200 working positions and a half of electricity from own resources.
'The operation of TPP has no alternative. On the one side, there is ecological retrofitting in the value of 54 million euros which is to meet the strict standards of the European ecological directives and enable operation for at least 10 years and, hopefully, longer. On the other side, electricity purchase will cost over 100 million euros annually in case TPP stops its operation. To sum up, investing in ecological retrofitting would cost 54 million euros and import during ten-year period over one billion euros. It is my proposal to provide the remaining amount of money through loan arrangement, so that the loan installment is at the level of daily generation of TPP. In such a way, TPP would operate for itself for one day and the remaining 29 days for the state and citizens, at least by 2030, but I'm pretty optimistic that it would be able to operate also after that period. Without ecological retrofitting there is definitely no TPP, which means losing 1.200 working positions and 50% of the state's electricity generation, not to mention indirect consequences for the state's economy, liquidation of numerous companies, increase in international trade deficit, decrease in average earnings and hundreds of other negative effects. I am wondering if anybody with common sense and good intentions would renounce it at this moment and deliberately liquidate the energy sector of Montenegro, without the alternative plants having been previously ensured. We also need to take care of the Coal Mine Pljevlja, its business stability and the employees' future.
I expect the works on ecological retrofitting of TPP to commence soon, as the crucial reason for delay is epidemiological situation. In cooperation with the Ministry of Finance, I expect expeditious finding of legal model for performance of additional works. Although some structures advocate abandonment of ecological retrofitting due to the bad contract, I'd like to point out that, figuratively saying, we have inherited the house noticing that one of its walls is badly built, so the question is whether we are to demolish the house or repair the wall? I consider it is our obligation towards the state and citizens to act in such a way so as to preserve both the company and energy stability. That’s why, and aimed at speeding up the works, I have set up the new team for monitoring the project’s implementation, extended and strengthened by several external associates. Speaking about conditions of the EEC, I have to state that the previous management brought TPP almost to shut down and it was left in charge of the new management in such a condition. However, having in mind significance of TPP operation for the energy system of the state, I expect positive outcome of negotiations between the competent ministry and EEC, after which continuation of the thermal power plant operation would be ensured. Also in this process, ecological retrofitting represents the crucial advantage for enabling additional operating hours, not to mention withdrawal of integrated permit by Environmental Protection Agency, i.e. the immediate shutting down in case of giving up the ecological retrofitting’, Mr. Rovčanin said.
Mr. Rovčanin also mentioned the international public invitation for financing the projects 'Solari 3000+' and 'Solari 500+'.
'Eight interested financial institutions applied to the international public invitation for provision of funds for this project. The bids have been thoroughly analysed and meeting with all the bidders was held. The information about the best bid is expected soon. In the meanwhile, project teams are engaged in preparing the invitation for procurement of equipment, as well as public invitation for the citizens and commercial entities interested in participation in this project. The objective is for electricity to be almost free of charge for the citizens and for EPCG to sell that electricity on the market at higher prices. In such a way, both the citizens and our company will have benefits. I would like to use this opportunity as well to invite the citizens to apply and get involved in this revolutionary project which will result in direct financial benefits for the home budgets.
In order to facilitate the project's implementation for the customers, we have initiated, modeled by numerous European energy companies, the idea to establish the company 'EPCG Solar gradnja', which would be in charge of this project, thus implying the competences for new or similar activities in future. This will lead to potential new work positions, training of domestic work force for all future projects from the field of solar energy and fully establish one more entity within EPCG group, thereby keeping up with the time and energy transition requirements. Intensive activities regarding preparation of public invitation for procurement of equipment and invitation for stakeholders are currently in progress and the public will be timely informed thereof'.
SHPP Otilovići and district heating of Pljevlja are among major and most important projects which are under implementation.
'The fact that SHPP Otilovići has not been constructed promptly upon meeting the conditions therefor led to losing of 20 million euros on the side of EPCG, considering that annual generation would amount to 600 – 700 000 euros. The expected annual generation equals 11,4 GWh. We expect that the competent ministry department will provide us with concessions for use of excess water within the shortest period and during next week I will set up the project team consisted of internal and external experts which are to be in charge of this project implementation. Having in mind our permanent orientation to invest in green energy development, in addition to construction of SHPP Otilovići, we plan to implement the project of floating solar on the Slano Lake in Nikšić, together with the credible partners. A number of Danish companies are seriously interested in this project, the implementation of which would definitely be aligned with the guidelines stipulated by the International Union for Conservation of Nature and Natural Resources (IUNC) for mitigation of negative impacts of renewable energy sources on biodiversity. The project team set up a month ago has already been intensively engaged in its implementation. We have initiated implementation of the project ' District Heating of Pljevlja'. This project has been pending for 40 years. It implies construction of primary heating line from TPP which will become heating source to the town upon completion of ecological retrofitting. This will further enable for the existing infrastructure to be connected to the heating source and then, prospectively, in the second or third phase, such heating lines would be spread over the town. It is planned for the works to commence during 2022 and for the implementation thereof to last for several months', Mr. Rovčanin said.
Numerous Projects are being contemplated and any of them may be selected for implementation.
„The estimate of all investments, EPCG currently contemplates, exceeds a billion and three hundred million of euros. Energy transition implies a strong investment cycle in green energy and improvement of the existing facilities in terms of ecology standards, so as to secure their functioning for as long as possible at least by the time of construction of the new replacement facilities. One thing’s for sure: in a two-year-period we are going to construct more than our predecessors did in 40 years. Besides the projects I have mentioned above, we have other new projects among which I would like to point out the WF ‘Gvozd’, the construction of which is going to start at the beginning of the next year since the contract signing is soon to happen. We have established a preliminary cooperation with the European Bank for Reconstruction and Development (EBRD) in order to secure the funds for this Project implementation. I have already mentioned that ecological retrofitting of the TPP Pljevlja and 20 M€ worth works on reclamation of the ash and slag Maljevac Landfill follow the planned schedule and exquisite results were reached so far’ said Mr Rovčanin.
Our goal is to boost activities on SP ‘Briska Gora’ Project and create conditions for implementation of HPP Komarnica Project since EPCG got a concession. We are preparing preparatory phase activities regarding the HPP Kruševo construction. By implementing these projects we would obtain additional 300 MW of installed capacity and create a milestone for future development of our company and the energy power system. Further to, I would add that EPCG contemplates participating in the planned tender for land lease for construction of the solar power plant at Velje Brdo in Podgorica, where we plan to construct a plant of total installed capacity of 150MW in phases, where the Phase I would imply a power plant of 50 MW. Speaking of our company and electric industry system the construction of new generating capacities, highlighting those from renewable energy sources, is our top priority. At the same time our commitment to reconstruction and modernization of existing facilities is beyond any doubt’, said Mr Rovčanin.
New EPCG management focus will be on cumulatively enormous debts.
‘Total debt of legal entities and households amounts €181.128.127 whereof €120.597.188 pertain to households and 60.530.939 € to remaining consumption. According to the relevant data of the last period, it is important to highlight declining trend of the debt amount. I want to emphasize the increasing number of regular payers, which contributes to a stable functioning of the energy system. At this moment there are approximately 210 000 regular payers. Increase in number of regular payers is undoubtedly supported by campaigns offering customers debt settlement in instalments and where further calculation of default interest and compulsory disconnection measures are suspended. If we take into consideration all subsidies granted to our customers the total expense EPCG is to incur in 2021 amounts to 10 M€’, stated Mr Rovčanin.
There is a constant need in manpower so the new job classification is aimed at preservation of the existing and hiring of new employees.
„EPCG has had a good business results in the first 6 months this year. We need to maintain this trend in the future, showing a great respect to our 980 employees. U FC An average salary amounts to € 860. Out of 980 employees there are 615 employees in FU Generation (400) and FU Supply (215) while the remaining employees work in other directorates including the Energy Management Directorate. It is important to highlight that the manpower in the past mainly covered maintenance of the three generating units and realized a huge number of overtime hours, which is a first signal for insufficient number of employees. The existing employees structure is insufficient and can’t meet the needs of development and maintenance of new projects we aspire to. This is evidenced by fact that the same engineers participate in project teams of different projects and that we have been hiring external professionals in order to compensate the lack of staff and enable unhindered maintenance of business operation. As regards the development needs, it is evident that EPCG has a lack in staff. Nevertheless, using the figures of the previous month as a benchmark it is clear that EPCG has 2 employees less if compared to the previous year i.e. 18 employees less if compared to the same period of 2019. These data encompass all trainees, outsourced and disabled employees as well as over 25 employees who are on a temporary leaves. Due to all the above mentioned the Company has undergone preparation of a New Rulebook on organization and Job Classification in order to meet the needs of both the Company and the Collective Agreement. Our intention is to create a separate Directorate for Renewable Energy Sources. By this strong investment cycle EPCG is going to be a leader in the State’s development and energy sector will soon secure hundreds of new working positions. Adjustments in salaries can’t be done unilaterally since, inter alia, there is an obligation to honour the Collective Agreement. Also, taking into consideration its specific core activities, it is quite clear that we have no intention to either put the Company in a situation to lose its experts or make reckless moves since we have already had a problem to get some experts back to the Company since they earn much higher salaries in foreign companies if compared to those we could offer to them.’ stated Mr Rovčanin.