Kilowatts for Moldova and not only...

Kilowatts for Moldova and not only...

Comment from the InfoMarket

Recently the Ukrainian media reported that the Ukraine plans to purchase power abroad, and not only in Russia but also in Moldova.

This statement was made by the Deputy Prime Minister, the Minister of regional development, construction and housing and communal services of Ukraine Gennady Zubko. It is interesting, until now, Ukraine has been an exporter of electricity, and due to the situation in Donbas, in the country there was an acute shortage of coal, which had been used for electricity production and, as a consequence, our neighbors have long practiced blackouts, even in Kiev. Moreover, it is not clearly explained what happened at Zaporozhzkaya nuclear power plant... one thing is clear – the stop of reactor led to even greater shortage of electricity in the country.

Trying to solve the problem, the government of Ukraine approved the resolution on electricity imports especially from Moldova.

It is interesting that until now, Ukraine has exported electricity, including our country. For us it was always convenient to choose from the two main suppliers - Ukrainian and Moldovan hydroelectric power station, located in Transnistria. Against the background of competition was formed quite acceptable price.

However, we have repeatedly raised the question that the electricity could be bought in Romania, where, according to the statements of our authorities it is cheaper. However, for the energy imports from the West it is necessary to build on the border three convector back-to-back in the South, Center and North of Moldova, which is estimated at a total of 377 million euros. The European Bank for reconstruction and development has even announced a competition to develop feasibility studies for them, applications will be accepted till December 22.

But this is a matter of the future time. Today Moldova itself (excluding Transnistria) produces not more than a quarter of its electricity; the rest is purchased from the Ukrainian or Moldavian HES. The station is owned by the Russian company "Inter RAO UES".

In October of this year, the Deputy Prime Minister, the Minister of economy of Moldova Adrian Candu outlined the problem of reducing imports from the Ukraine: "Previously Moldova received 60-65% of electricity from the Ukraine, and 30-35% from the Moldavian HES. However, given the problem with the coal mining, the destruction of mines, and violation of the logistics of supply of coal in connection with the war in the Donbass, Ukraine cut electricity supplies to Moldova. In connection with this proportion has increased the volume of its purchases from Moldavian HES and now the Ukrainian and Moldavian HES supply the electric power to the right-Bank Moldova in the ratio of 50% to 50%.

And this doesn't affect the end consumer, as the price of both suppliers is the same and from April 1 this year is 6.8 cents per 1 kW.

This was the situation at the beginning of October. Now there are practically no supplies from Ukraine to Moldova, on the contrary, Ukraine gradually began to import energy from Moldova or from Moldavian HES.

Many people confuse, but HES is not a hydroelectric power station but a heat one; the acronym stands for the State Regional Power Plant. It was commissioned in 1964, consists of 12 units and runs on gas, oil and coal. The production capacity of the plant is 2 thousand 520 MW, which is more than twice of the maximum demand of Moldova.

Therefore since 1990 only two energy blocks operated at Moldavian HES and since 2009 - four. The station managed to increase electricity supplies to Moldova in 2013 and provided 80% of the total income; 10% of income was provided by the consumers of Transnistria, and another 10% station exported to Romania. However, last year export to Romania was stopped as unprofitable.

It is interesting that by the end of 2013, Moldavian HES according to their published data - reduced energy production by 30% compared with 2012- up to 3 billion 044 million kW/h.

Indicator 

2012

2013

9 mon. 2014

Electrify output

KWT/h 4,374 billion

KWT/h 3,044 billion

KWT/h 2,799 billion

Coefficient of installed capacity, %

19.76%

13.75%

17%

Share of coal in production 

0.78%

23.67%

0.14

Share of oil in production 

0.24%

0.22%

0.04

Share of gas in production 

98.98%

76.12%

99.82

That is, in 2012, the performance of electricity generation in Moldavian HES was quite high; in 2013, it was down by one third; and this year, judging by the figures for 9 months there is a tendency for the output growth, which even exceeded the results of 2012. In 2014, the station turned to the practice of the previous year for the production of electricity based on coal and almost completely returned to the natural gas.

Indicator 

9 months 2014

9 months 2013 

Change

Installed capacity 

2520 MW/h

2520 MW/h

-

Electricity output 

2.799 bilion KWT/h

2.013 bilion KWT/h

+39%

Coefficient of use of the installed capacity

17%

12%

+ 5 p.p.

Heat energy from the collectors

89 thousand Gcal

74 thousand Gcal

+21%

Fuel balance:

Gaz

Coal

Oil

 

99.8%

0.14%

0.04%

 

64.7%

35.0%

0.3%

 

-

 

It should be noted that Moldavian HES is one of the largest power plants in Eastern Europe, but never its power was used at 100%, especially after the collapse of the USSR. However, in due time the owner of the station became "Inter RAO UES" which for the last 10 years has invested in its modernization about $200 million- the data released by the General Director of HES Alexei Shirma in February of this year.

The investments continue. Just a few days ago InfoMarket reported that a Russian company INTRAC completed upgrading part of the open distribution devices of electric 330 kV of Moldavian HES. In particular, it was found six sets of gas-insulated circuit of 330 kV and carried out the commissioning.

The head of electrical control department Vladislav Spurgis: "As a result of the implemented project significantly increased the reliability of 330 kV of outdoor switchgear CJSC of "Moldavian HES” and increased turnaround interval. Thus, the reliability of the power supply of consumers of energy, generated by Moldavian HES has grown.

According to some media, in late October accidents on all four operating units, which have led to a sharp drop in voltage, have occurred. Connected to two redundant power unit leveled the situation, the problem is eliminated, and information about the incident is secret.

In any case it is clear that nobody is going to run things at the station, on the contrary: being a part of the Russian concern, receiving Russian gas, Moldavian HES has long been preparing to become a major player in the electricity market in the Eastern Europe.

The situation, as they say, favors: today Moldavian HES covers the major share of the energy needs of Moldova, and also supplies energy in the Odessa region. At the same time only four of 12 project units operate at the station. It is clear that all 12 stations can not start work, two blocks must remain in reserve, but the fact remains: Moldavian HES can not only provide the energy needs of Moldova, but can also sell it to the Southern and Central Ukraine.

On the one hand, Ukraine could long avoid the internal rolling blackout, dramatically increasing supplies from Moldavian HES, on the other - this station is owned by the Russian company, and Gazprom station shall coordinate the sharp increase in the natural gas supplies.

Despite the fact that the Moldovan HES retains monopoly in our region, there is a strong temptation to raise prices. Moreover there was a sharp devaluation of MDL, which from the beginning of the year amounted to more than 17%.

This year Moldova buys electricity at 6,8- price for 1 kW at the beginning of the year, what corresponded to 89 bani; today it is already 1,05 leis. The sale price for the end domestic consumers in Chisinau is 1,37 lei – the cost of transportation and distribution.

There are no objective prerequisites for the Moldavian HES to increase the selling price, despite the fact that situation on the world fuel market presses to reduce the price of the natural gas. On the other hand the increased demand for electricity from Moldova and Ukraine can put pressure on the selling price in the direction of its increase.

But the greater danger is a sharp devaluation of leu. The question is, if the suppliers - electricity distribution network of the North (RED-Nord), North-West (RED Nord-Vest), and Central and Southern company Gas Natural Fenosa will be ready to hold rates that are approved by ANRE.

We do not know it yet, but requests from distribution networks to increase the selling price to the consumers, are probably already in the Agency.