Modernization of District Heat Supply Systems of Vilnius and Kaunas Ignas Degutis Head of finance unit 2015 09 29, Vilnius
Lietuvos energija Group Power and heat generation and supply Maintenance and development of the energy sector Natural gas trade and distribution
H1 2015 EMPLOYEES 5552 ELECTRICITY, HEAT PRODUCTION ELECTRIC POWER TRADE AND DISTRIBUTION NATURAL GAS TRADE AND DISTRIBUTION MAINTENANCE OF POWER PLANTS AND GRID 973 M I L L I O N GROUP REVENUE (2014) EBITDA 217 m EUR CONSUMERS IN H1 2015 1.6 million 560 thousand 153,9 28% 32,1 6% 27,2 5% GROUP REVENUE H1 OF 2015 548,3 MILLION 159,7 29% 159,8 29% LIETUVOS ENERGIJA IS ONE OF THE TOP 5 LARGEST COMPANIES BY THE SALES REVENUES IN LITHUANIA LIETUVOS ENERGIJA IS THE 206 TH LARGEST COMPANY IN CENTRAL EUROPE (DELOITTE 2015). Distribution of electricity Produced electricity sales, trade and supply Connection of new customers Heat energy Gas sales and distribution PIMS of LEG Balancing, regulation and power reserve Other revenue
The Structure of Lithuania s Energy Sector after EU 3 th Energy Package Implementation Grid maintenance Real estate and transport
Projects of modernization of district heat supply systems of Vilnius and Kaunas
VILNIUS AND KAUNAS CHP PRJECTS Lithuania s Energy Sector Outlook One of the biggest importer of electricity among EU countries (~ 70 proc.); No local natural gas/coal/oil available; No financial incentives to use conventional fuel based cogeneration; I. Introduction Ineffective waste management, more than 70% of waste are landfilled; Existing power generation capacities are almost depreciated. Long term risk security of energy supply
Today s NordPool Spot Electricity market
Cyprus Malta Greece Lithuania Turkey Croatia Bulgaria Romania Spain Bosnia and Herzegovina Hungary Serbia Latvia Portugal Slovakia Ireland Italy Poland Czech Republic UK Iceland Finland EU Slovenia France Luxembourg Estonia Austria Denmark Norway Netherlands Belgium Germany Sweden Switzerland kg per capita 2012 Municipal waste treatment in the European Union countries Municipal waste collected in Lithuania 1.280.049 t; Landfilled 64% (forecast in 2016 55%; EU 31%); Kilograms per capita 433 kg (EU 481 kg); Incinerated 7% (EU 26%); Recycled 21% (forecast in 2016 45%; ES 28%); 700 600 500 400 300 200 100 0 Kita Other Kompostuojama Composted Perdirbama Recycled Incinerated Deginama Landfills Sąvartynuose 8
Waste management hierarchy Up to 2016 2016-2018 From 2018 9
New CHP plants in New CHP s in the Largest Lithuanian Cities Vilnius and Kaunas Kaunas: Population 301.296 District heating 90% Annual heat demand 1,2 TWh Municipal waste (RDF) ~200.000 t/yr. Landfilling ~95% Vilnius: Population 542.664 District heating 90% Annual heat demand 2,5 TWh Municipal waste (RDF) ~145.000 t/yr. Landfilling ~85% Competitive electricity from local and RES Cheaper heat, energy efficiency Contribution to the waste management
Vilnius and Kaunas biomass and waste cogeneration Fuel in district heating system in Lithuania 100% 90% 18% 24% 20% 11% 6% 6% 6% 6% 5% 7% 6% 4% 5% 6% 7% 8% 12% 80% 70% 45% 60% 50% 82% 84% 82% 80% 78% 77% 74% 74% 73% 68% 61% 40% 80% 72% 76% 80% 30% 20% 10% 0% 48% 33% 27% 22% 10% 12% 14% 16% 18% 19% 19% 2% 4% 5% 7% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015F 2020F Renewable energy sources Natural gas Heavy fuel oil and other 11
CHP s projects at the glance Ministry of Energy Ministry of Finance Ministry of Finance 100% - control EU funds Vilnius Kaunas <164mEUR <69mEUR 100% 51% 49% Vilnius high efficiency CHP power plant MWe MWt ~88 ~227 ~325 meur Kaunas high efficiency CHP WtE power plant MWe MWt 24 70 ~150 meur RDF ~ 200 kt/y BioCHP installation (fluidised bed steam boilers) MWe MWt ~70 ~174 RDF consumption Biomass consumption WtE CHP installation (grate-fired steam boiler) MWe MWt ~18 ~53 ~ 140 kt/y ~500 kt/y
Vilnius CHP project 2015 2016 2017 2018 EIA and territory planning activities EIA EIA approved Territory planning activities Start of works at site Construction of PP Procurements Engineering, design and EPC Commissi oning Financing Staid Aid/ EU funding Structuring finance Regulation NHSDP National heat development plan Legal basis for regulation of activity EIA. 2015-09-02 Environmental Protection Agency approved Environmental Impact assessment; EPC. 2015-05-08 announced EPC tender. Qualification assessment should be finished 2015-09, preliminary first proposals to be received end November, final beginning 2016. EU grant. 2015-04-14 EU DG Competition registered UAB Vilniaus kogeneracinė jėgainė pre-notification documents. 13
Kaunas CHP project 2015 2016 2017 2018 Project concept selection Selection, negotiation Start of works at site Construction of PP Procurements Engineering, design and EPC Commissi oning Financing Staid Aid/ EU funding Structuring finance Regulation NHSDP National heat development plan Legal basis for regulation of activity Partner. 2015-05-20 selected partner Fortum signed cooperation agreement. EPCM. Project is expected to be implemented by procuring EPCM (engineering, procurement, construction and management) services. Preliminary procurement will be organized splitting plant contractors into 5-10 lots (EPC contracts). It is expected to start procurement procedures in 2015-10. EU grant. 2015-09-22 EU DG Competition registered UAB Kauno kogeneracinė jėgainė pre-notification documents. 14
Expected results Electricity production, GWh (share of TSO demand) District heat production, GWh (share of total production) Decrease of Heat production price Vilnius high efficiency CHP installation Kaunas high efficiency CHP installation 400 (3,7%) 175 (1,2%) 1.240 (48,9%) 500 (17%) >20% >20% CO 2 reduction, tones/year ~ 230.000 ~ 70.000 Primary energy savings ~40 % ~ 46% 15
Thank you! Ignas Degutis Head of finance unit Ignas.degutis@le.lt