Current energy projects in FYR of Macedonia

EnergyTechnical ArticlesSouth-East European INDUSTRIAL Мarket - issue 3/2011

FYR of Macedonia seeks to enhance the number of investments in the energy sector. Priority is given to projects for the new mine coal and the new thermal power plant in Mariovo, investment worth 400-450 million Euros, then revitalization of TPP "Oslomej" and REK Bitola, the project for full heating of Bitola for the construction and rehabilitation of hydropower plants, recapitalization of ELEM, with its privatization of up to 49 percent of the property. The realization of the projected economic growth rates of 5.5 to 7 percent, and also the growth in construction and industry, followed by reducing of the unemployment, which should reduce from the current 31 to 25 percent, will directly depend on the realization of these promises, economists say.

Macedonia will strive to fulfill the EU standards and regulations relating to energy, also will make efforts to establish a competitive national electricity market, and to actively participate in the regional electricity market. Particular attention will be given to liberalization of the electricity, natural gas and thermal energy market. Reforms which are meant to create a consistent energy system, on the recommendation of the European Union, aim at harmonizing the Energy Community of South-East Europe, with the ultimate goal-integration into the EU energy market.
Main priorities of the development of the energy sector will be: market liberalization, energy security, increasing of the energy production, diversification of energy resources, increasing international relations with regional countries and international transport corridor, increasing energy efficiency, as well as increasing the energy capacity from renewable sources.

Mine and thermal capacity
For the exploitation of domestic energy resources, the exploitation of existing lignite mines in Suvodol and Oslomej will have to increase. Also there will be a completion of those activities that have already started, for the opening of mines Brod-Gneotino, and the Podinian coal series in Suvodol.

Because of the favorable technical and economic characteristics, the Government of Macedonia in the next four-year period will give the priority to mines. Thus, the main project for the new coal mine and the new thermal power station in Mariovo should be ready by 2012. After that, it will be prepared a feasibility study for the construction of a new thermal power plant, estimated at 400-450 million Euros. The main project for coal mine in Zivojno will be completed by the end of 2012. The realization of this project would begin in 2013, with funds from ELEM.

Priority projects
• Coal Mine in Popovjani and modernization of TPP "Oslomej" (2015)
• Coal Mines in Lavci, Zvegor-Stamer and Star-Istvenik Pancharevo (Pehchevo), studies of the potential will be completed by the end of 2014, which would be followed by determination of the quantity and manner of exploitation.
• Revitalization and modernization of TPP "Bitola"- the second and third block will completed during this and next year. By the end of 2014, it will be completed the remediation of the boilers in REK, worth 60 million Euros.

For efficient utilization of thermal energy, produced in REK, a project for heating will be implemented in Bitola. It’s a matter of investment worth 40 million Euros and the construction period is 24 months. This will ensure the heating system of over 55, 000 consumers in the municipality of Bitola, and the possibility of using energy for agriculture in Mogila and Novaci.

Construction and rehabilitation of hydropower plants
For the usage of hydropower plants potential, which the country has on disposal, the Government plans to impellent old-new projects, through investments from the state budget, international borrowing under favorable conditions and concession. Those projects are:
• "Vardar Valley" - construction through public-private partnership, a foreign investor to 12 HEC, worth 15 million Euros in two phases from 2013 till 2025)
• HPP"Sveta Petka" (Matka 2) - the project is at an advanced stage and the plant should be operational by the end of 2011
• HPP "Cebren" and "Galishte" - construction, after a string of unsuccessful tenders is expected to begin by the end of 2012, and the plants to be completed by the end of 2018
• HPP "Boshkov Bridge" - the construction would start next year and the plant would be ready by 2016
• Dam "Lukovo Pole" and Korabski supply- the realizations expected to begin in 2012 and to be completed by the end of the 2015th.
• Second and third phase of the hydro system "Zletovica" - the second phase includes construction of water supply and irrigation network (deadline for completion by 2015), followed by the third phase, which envisions the construction of seven mini hydro power plants (at 2015).
• Second phase of the hydro system "Lisice" - construction of a pipeline from dam"Lisice" to the lake "Mladost". It will provide improved water quality in the lake and irrigation of 1,600 hectares of agricultural land in Veles. Through public-private partnership, until 2015, will be built three to five small hydro power plants.

More to the point, it is planned a completion of the revitalization project of the six existing large hydropower plants, i.e. realization of the second phase as "Shpilje", "Globocica", "Tikvesh". "Vrutok", "Vrben" and "Raven". Everything should be completed by the end of the 2014th.

Sales and privatization of ELEM
In the next four-year period, the Government plans to attract domestic and foreign investors, which will increase the capital of ELEM, by buying new shares, followed by its privatization by selling up to 49 percent ownership in the "Macedonian Power Plants".

The project will be lead by world’s renowned consulting firms and sales will be conducted transparently through an international open call. This process of recapitalization will be realized only if the conditions under which investors are willing to invest in ELEM, are favorable for Macedonian citizens.

Electricity transmission system
The geographical position of Macedonia and the current electricity situation in the Balkans are enabling our country to be a significant factor both in transfer and transit of electricity. Therefore, the Government will work to strengthen the power system, its expansion and the increasing of the stability in the transmission of electricity. For this purpose, the process of upgrading and strengthening of the transmission and interconnectivity network will continue through completion of these projects:
• Construction of 110 kV transmission line HEC "Vrutok" - SS "Tetovo" (completion in June 2012)
• Construction of 110 kV transmission line SS "Bitola 3"- SS "Bitola 4" (completion in June 2012)
• Reconstruction of 110 kV transmission line HEC "Kozjak" -SS "Skopje 3" (December 2011)
• Reconstruction of 110 kV transmission line SS"Skopje 1 "-SS "Kumanovo 1" (June 2012)
In addition, it is planned in the next four years to be implemented the following projects and more:
- Construction of 110 -kV transmission line of 110 SS"Skopje 1" - SS"Tetovo 1" (2012)
• Installation of a new SCADA / EMS System (end in 2014)
• Construction of 400-kV interconnectivity international channel TA "Shtip" -SS "Nish" (completion by2014)
• 400 kV transmission interconnectivity channel SS "Bitola 2" - SS "Elbasan" (start of construction 2014)
• 400 kV interconnectivity connections with the power system of Kosovo (start of construction 2014)

In order to increase the competitiveness of Macedonian economy and to provide cheaper energy for the domestic market, the Government has set two strategic priorities: building a national gas pipeline system and involvement of Macedonia in the international gas pipeline corridors.

With funds provided by the Russian Federation (i.e. long - awaited return of the clearing debt), will be financed the construction of one part of the bus priority rout Klechovce - Shtip - Hamzali - Stojakovo - border with Greece. Term of realization of this part of the project is 2012-2018 year.
Furthermore, by the means provided by EIB and EBRD, and with participation from the state budget, will be financed the construction of other parts of the pipeline system. For the first phase it is planned construction of two bus routes Skopje - Tetovo - Gostivar with length of 75 km and Shtip - Negotino - TEC Negotino -Kavadarci - Prilep - Bitola and REK "Bitola" - Kremenica - border with Greece in length of 146 km. Term of realization of this stage is 2012-2018 year.
The second phase, however, includes the following sections: bus route Gostivar -TEC Oslomej - Kichevo with length of 38 km; priority part of the bus route Hamzali- Novo Selo - Bulgaria, with length of 24 km and the remaining part of the national pipeline pipeline system, length of390 km.

Term of realization of this stage is 2018-2023 year. Along with completing of the first stage, will be taken several activities in order to find a strategic partner for the gasification of TEC "Negotino". That is, the transformation of the outdated and expensive technology of fuel oil, into a new, modern and environmentally acceptable plant of natural gas. With this project, the state will retain a significant ownership share in the new gas plant.

Renewable energy sources and energy efficiency
The Government is planning to stimulate the production of electricity from renewable sources through preferential tariffs and issuing guarantees of origin for electricity produced from small hydro plants, wind fields, photovoltaic power plants, biogas plants produced from biomass and cogeneration plants which will use biomass as fuel. Measures to encourage production and use of biodiesel and bioethanol will be taken. For the realization of these promises, in the next four-year period will be implemented the following projects:
• Offer of 40 locations per year for construction of small hydropower plants to the interested investors / concessionaires.
• Concessions for the construction of wind farms to produce electricity at preferential rates of at least 60 MW installed capacity.
• Wind Farm "Bogdanci" -a project worth 55 million Euros, provided by the German KFW Bank and ELEM. Construction of the wind field is planned to begin this year and it will be completed by the end of 2012.
• Subsidies for at least 500 households per year, for installing solar - thermal systems.
• Will double the possibility for construction of solar photovoltaic systems from the current 10 to at least 20 megawatts.

Source: Business, ELEM