Company Level Report - Bulgaria

Transcription

1 S E C OPET CHP/DH Project WP 1: Improving CHP/DHC sectors in CEEC Company Level Report - Bulgaria May 2004 European Commission (Directorate-General for Energy and Transport) Contract no. NNE5/2002/52: OPET CHP/DH Cluster

2 WP 1 Improving of CHP/DH systems in CEEC - Company Level Report Bulgaria 2 Company Level Report - Bulgaria Author(s): Ivanka Pandelieva, Ivan Jabinski Organisation: Sofia Energy Centre Address: 37, Galitchitsa Str., 1164 Sofia, Bulgaria Tel.: Fax: ivankap@sec.bg Web: The project "OPET CHP/DH Cluster" has obtained financial support from the European Commission (Directorate-General for Energy and Transport) under the contract no. NNE5/2002/52 for Community Activities in the Field of the specific programme for RTD and demonstration on "Energy, Environment and Sustainable Development - Part B: Energy programme" The responsibility for the content on this publication lies solely with the authors. The content does not necessarily represent the opinion of the European Community and the Community is not responsible for any use that might be made of data appearing herein.

3 WP 1 Improving of CHP/DH systems in CEEC - Company Level Report Bulgaria 3 Table of Contents 1. Considerations for choosing DHC for JI implementation General basic data Purchase prices of natural gas Sale prices of heat and electricity Methodology for CO 2 emissions reduction assessment Planning, licensing and permits Developing Tools and Measures CHP Introduction in Bulgarian DH Companies Case Studies Additional data...8

4 WP 1 Improving of CHP/DH systems in CEEC - Company Level Report Bulgaria 4 1. Considerations for choosing DHC for JI implementation The analysis of current state and activities of DHC in Bulgaria, made under Sector Level Survey, shows that the biggest economic and environmental benefits can be obtained by refurbishment of existing heating stations with gas-fired CHP modules. This refurbishment leads to: 1. Increase of CHP share as CHP is promoted by the new Energy Act and is treated preferentially; 2. The technical, economic and financial data of the refurbished sites improve significantly. They will produce electricity apart from heat and the coefficient of efficiency of the combined cycle is by about 20 % higher that that of separate production. This will allow the companies to form lower and more attractive prices of heat and to increase their competitiveness. 3. The fuel savings resulting from the higher efficiency and the use of natural gas will lead to CO 2 emissions reduction, and also indirectly, to reduction of SO 2, NOx and dust emissions. The Energy Law allows for such sites to trade part of emissions reductions, which could be used to support refurbishment investments. There are by all means other possible ways for increasing the efficiency of DH systems, but as it was already presented in the Sector Level Survey, they are in much more advanced status and have already secured financing in different ways incl. own funds (mainly from depreciation). This is valid for the rehabilitation and modernisation of DH networks, substations, pumping stations, mounting of low-emission burners in some boilers, etc. During the process of selection of sites the following factors have been considered: To have interest shown on behalf of DHC management; To have made preliminary investigations that give some orientation about the viability and technical conditions of implementation of such projects; The main fuel in the DHC to be natural gas and the company to have its own gas distribution branch; The company heat market to be relatively stable with positive forecasts for future development and good bill collection rates (i.e. solvency of clients); Lack of CHP in order the new-built installation to be the main electrical capacity (not supplementary one), which could use for the combined cycle the most suitable part of heat-loads curve (all year round heat loads for domestic hot water with operational hours over 7500 hours/annum and basic part of space heating loads with operational hours hours/annum). After analysing the above conditions and requirements, five DHC have been chosen as follows: Heating station (HS) Zemljane from DHC Sofia with installed heat capacity of 581,5 MWt; Heating station (HS) Lujlin from DHC Sofia with installed heat capacity of 581,5 MWt; Here the possible project is similar to HS Zemlajne; DHC Bourgas with installed heat capacity of 348,9 MWt; DHC Varna with installed heat capacity of 232,6 MWt; DHC Vratsa with installed heat capacity of 116,3 MWt in the main heat production site HS Mladost

5 WP 1 Improving of CHP/DH systems in CEEC - Company Level Report Bulgaria 5 2. General basic data 2.1. Purchase prices of natural gas The above 5 DHC use natural gas as a main fuel, incl. for initial ignition of the boilers. Heavy fuel oil is allowed only as emergency fuel. All 5 sites have built they own gas supply branches from the main pipeline and buy natural gas directly fro the biggest supplier Bulgargas (100 % sate-own company). In this case there is no need to use intermediary agent (gas supply company), which usually leads to increase of gas prices. Since natural has price valid for whole country is determined and it is 227,48 BGL/1000 Nm³ (116,31 Euro/1000 Nm³) which refers to the direct consumers connected to Bulgargas network. The average calorific value of natural gas (imported from Russia) is kj/nm³ Sale prices of heat and electricity According to the Energy Act cogenerated electricity is compulsory purchased by he transmission/distribution company. If this power generation is from capacities below 50 MW, preferential price purchase price is applied which at present is 80 BGL/MWh or 40,90 Euro/MWh. For production capacities over 50 MW the price is to be determined by SCER in compliance with the approved by the Council of Ministers Ordinance for Energy Price Formation. It can be expected that after the rehabilitation of TPP Maritsa East 2 and TPP Maritsa East 3, and in particular after building up the new capacities at TPP Maritsa East 1, for which activities more than 1 billion USD will be invested with expected high return rate, the purchase prices of electricity will rise. The sale price of heat for households is formed by the following four components: Price for monthly consumption up to 250 kwht lower rate; Price for monthly consumption over 250 kwht higher rate; Price of heat consumed for domestic hot water preparation; Constant price for installed capacity base don the declared heated volume of a dwelling. The average price of heat including the above four components, up to amounted to about 44 BGL/MWht or 22,5 Euro/MWht for an average dwelling of about 200 m³. From this price is about 48,40 BGL/MWht or 24,75 Euro/MWht and still it is below the real production costs of heat. The difference is subsidised by the state budget and it is foreseen within the forthcoming several years the energy prices to be liberalised and state subsidies to be redirected from energy producers towards socially voulnerable consumer groups Methodology for CO 2 emissions reduction assessment The selected DHC are only heating stations, i.e. they produce only heat. Therefore after their refurbishment with CHP modules, their capacity, energy output and natural gas consumption will increase, which will lead to CO 2 emissions increase if examined for the site solely. But it is clear that the cogenerated electricity will substitute the generation of conventional power plants that in principle are of highest production costs and are called closing balance power plants. These for Bulgaria are several condensing type thermal power plants using the most expensive coal (imported coal or local coal from underground mines). When making the environmental assessment it is presumed that the substituted power generation and respectively the harmful emissions, are formed as an average value for the above mentioned power plants. It has been determined that CO 2 emissions from these power plants amount to 630 gr. Per 1 kwh generated electricity. This is the accepted indicator when determining the overall emissions figure at national level before and after CHP refurbishment. It has already been used for

6 WP 1 Improving of CHP/DH systems in CEEC - Company Level Report Bulgaria 6 emissions calculations in several international studies and projects and has been accepted by the foreign experts Planning, licensing and permits Start of a project in DHC and especially it is with foreign participation or there is an interest shown from a foreign investor, required the following: Resolution by the Managing Board of the company; Endorsement by the Managing Board of the DHC principal body Principal body of DH Sofia is Sofia Great Municipality owing 59 % of the DHC Sofia. The rest 41 % are state-own. Chairman of the Managing Board is a representative of the Ministry of Energy and Energy Resources (MEER). The DHC of Bourgas, Varna and Vratsa are 100 % sate own and their principal body is MEER. Having in mind the priorities given to CHP at national level with the Energy Act and the related legislation, no barriers are expected for acquisition of the above two resolutions, and the procedure is expected to take no longer than a month after deposition of the application for project development. The local (municipal) planning procedures are also not expected to have negative influence on such a project. More complicated and longer lasting are the procedures of the next phase selection of a partner for the project realistaion, license obtaining from SCER for technical and working designs (projects), obtaining of construction permit from the Ministry of Regional Development and Construction. The selection of a foreign partner is a specific problem and it solution to a big extent depends on sound justification of project benefits in order to convince the site owner. It is expected that more complicated will be this task in the case of two heating stations within DHC Sofia (Toplofikatsia Sofia), as the interest of Sofia Municipality is mainly concerned. When the contract with site owner has been concluded, obtaining of license for the design phase from SCER will not be a problem. Building construction permit is issued based on developed technical drawings for the site. A number of requirements resulting the building related ordinances should be met (incl. document for land ownership) and these procedures (having prepared technical drawings) may require several months. There are specialised companies in Bulgaria with extensive experience in the energy site construction that can undertake preparation of project technical design and of tender documentation for equipment suppliers and selection of subcontractors for the building and equipment installation works.

7 WP 1 Improving of CHP/DH systems in CEEC - Company Level Report Bulgaria 7 3. Developing Tools and Measures 3.1. CHP Introduction in Bulgarian DH Companies Case Studies As it was aleardy mentioned the most suitable measures under Bulgarian DH sector conditions are related to preparation of technical and economic assessments of energy efficiency projects, in particular natural gas fired CHP introduction, in a number of suitable sites. The tools to be used are derived from the practical situation in the DH companies (eg. heat production, heat market and customers, availability of natural gas supply, etc.) combined with overall regulatory and organisational framework applicable to these companies - laws and regulations regarding prices and tariffs, licensing regime, preferences for CHP electricity, as well as organisational maters related to procedures for elaboration and endorcement of CHP project application, and last, but not least, securing necessary financial sources and making the financial plan of the project. Important tool for natural gas fired CHP project development especially in view of securing finance from environmental funds (eg. JI Mechanism) is the method for calculation of CO2 emissions reductions resulting from the proposed CHP project. The developed CHP project development tools have been applied for the five DH companies chosen in Phase 1 and thus five case-studies for CHP implementation in DH companies have been elaborated. These case studies can be used further for searchning of investors for the presented potential projects, but also can be used as a reference tool for other DH companies willing to develop CHP introduction projects. The five developed case studies are presented as Annexes to the present report, as follows: Annex 1: Case-study 1: Gas Fired CHP Implementation in HS Zemljane (DH Company of Sofia); Annex 2: Case-study 2: Gas Fired CHP Implementation in HS Ljulin (DH Company of Sofia); Annex 3: Case-study 3: Gas Fired CHP Implementation in HS Bourgas (DH Company of Bourgas); Annex 4: Case-study 4: Gas Fired CHP Implementation in HS Vladislav Varnenchik (DH Company of Varna); Annex 5: Case-study 5: Gas Fired CHP Implementation in HS Mladost (DH company of Vratsa)

8 WP 1 Improving of CHP/DH systems in CEEC - Company Level Report Bulgaria 8 4. Additional data Company information DHC Sofia Heating Station Zemljane Shareholding Company No major ownership changes; EBRD and WP significant loans are taken DHC Sofia Heating Station Ljulin Shareholding Company No major ownership changes; EBRD and WP significant loans are taken DHC Bourgas Shareholding company No major changes underway No major loans

9 WP 1 Improving of CHP/DH systems in CEEC - Company Level Report Bulgaria 9 DHC Varna Shareholding Company No major changes underway No major loans DHC Vratsa Shareholding Company No major changes underway No major loans