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June 7, 2016

by AEA

Streamlining renewable energy investment process in Macedonia

Due to significant political and economic support for renewable energy technologies in Germany, Spain and other countries over the last twenty years, huge progress in terms of cost effectiveness has been made, mainly in wind and photovoltaic, said Bojan Reščec, RP Global’s Country Manager for Croatia and Western Balkan.He stressed the two segments are proving to be the cheapest form of electricity generation in an increasing number of markets, besides being the cleanest.

RP Global has commissioned its wind park Rudine in the country’s south in April, becoming the largest wind energy investor in the market. It has been directing its focus on Chile, Peru and Georgia. It also has important segments in Austria, Poland, France, Portugal and Spain. “When it comes to our diversification strategy, emerging markets are key, as well as markets with a reliable and trustworthy political framework,” Reščec stated. The company achieved income of EUR 30.55 million last year, on revenues of EUR 38.92 million and total assets of EUR 383.1 million.

How is the company structured? What are the power generation and other assets and where are they located?

RP Global is made up of an operative arm and a development arm, each with respective subsidiaries that are holding individual projects. The company’s headquarters are in Vienna, Austria, as well as Madrid, Spain, and it has operating assets in Portugal (21.5 MW in hydro), Poland (120 MW in wind) and Croatia (78 MW in wind), as well as operations and maintenance (O&M) contracts for three wind farms in France, and a hybrid solar mini-grid in Tanzania. Currently we have wind farms under construction in France with an overall capacity of 49.5 MW, as well as small hydropower plants in Portugal of 10 MW and Chile, 2.9 MW. RP Global has about 100 employees.

What are RP Global’s projects in plan or pipeline and what is its general vision?

The main objective is the further expansion of its current portfolio of generating assets. From a project pipeline of about 1 GW, the company aims to develop an operating portfolio of 300 MW to 400 MW by 2017, which represents an overall investment of EUR 500 million to EUR 700 million. RP Global strives for geographical diversification, concentrating on Western Europe and selected countries in the Central and Eastern Europe, as well as Latin America. The main criterion is a stable legal environment, as well as general political support for renewable energy.

We are now implementing projects in countries without incentive schemes; therefore we need to be competitive in the market, with latest technologies and lowest generation cost.

Planned projects in an advanced stage of development include further electrification of Tanzania’s rural areas, hydropower projects in Chile, Peru and Georgia, as well as a wind power pipeline in France. We are also constantly prospecting new countries, especially in South America and Africa, and are currently looking at investment potential in the Balkan region.

Is there an established practice for segments of operations that are outsourced in the sector where your company works? If so, do you have any specific edge or policy?

A very simple policy is to bring generation cost down in all areas – optimize the structure which will secure the maximum production from the operating assets on a long-term basis, reduce the loss of production caused by failures etc. We have our own O&M management teams, in Croatia we are outsourcing maintenance of the wind energy converters (WECs) through long-term service agreements with producers, periodical inspections, where specific experts are occasionally required, and spare parts storage with a local company, which enables us to monitor the plants 24/7 and react quickly in case of a failure. One day without production can cost us EUR 100,000 so the main criterion is short response time when service is needed.

More on outsourcing in development of green power facilities – what adjoining industries can you see emerging or grouping?

Energy storage is something we will have to deal with; battery storage in the power sector can be employed in a variety of ways over multiple time periods. Decentralized generation (frequently based on photovoltaic) is another area RP Global is looking at. In general, we would also like to see more local content and products in the countries we are investing in to broaden the macroeconomic relevance of the sector in our markets.

Since renewables still depend on state incentives limited by time, how does RP Global envisage the viability for its portfolio or the overall sectors where it operates, beyond current power purchase agreements (PPAs)? Will sustainable energy become mainstream?

With generation cost decreasing rapidly, sustainable energy is becoming “mainstream” and we are adjusting our approach accordingly. RP Global has always strived to find the best sites and to get the very best from them using the most appropriate technology and optimizing the sites. We are now implementing projects in countries without incentive schemes; therefore we need to be competitive in the market, with latest technologies and lowest generation cost. This will be the target not only after PPAs or feed-in tariffs in operating plants expire, but also for our future projects. Our task is to find the technology and sites which will enable us to offer the produced electricity for a lower price. Croatia will adopt an auction system soon, so we have to be ready if we want to implement more projects in the future and we would certainly like to do so.

What is the life cycle like for a small hydropower plant and wind park?

Small hydropower plants have a significantly longer life span; current technology allows for over 50 years without the need for reconstruction. The life span of a wind power plant is usually calculated with 25 years, some producers even achieve beyond 25 years, but as long as the technology is being constantly improved, one might want to repower an existing wind farm sooner than originally foreseen. However, we are taking care of our operating assets, keeping them in good shape thus ensuring a long life cycle.

Did the endeavor of fulfilling procedural requirements simplify over time and what is the situation in the markets where you work? What existing or potential policies would you rate as prudent for the society or different levels of government?

Sadly, not really. Some procedures were simplified, but there is still more than enough room for significant improvements. A decision to give renewable energy the status of strategic interest for the country would be helpful in many ways.

In Croatia, we have been waiting to continue our activities for quite some time, because we have still not received a clear message from decision makers.

What are the effects of the new green energy legislation in Croatia? What is the situation with necessary by-laws?

As you know, the former government adopted the Law on Renewable Energy Sources and Highly Efficient Cogeneration in 2015 and drafted some necessary by-laws, but failed to sign them. The new government is determined to promote renewable energy, but we were recently informed that another public hearing will be held for the enactment on renewable energy sources so, as an investor in Croatia, we have been waiting to continue our activities for quite some time, because we have still not received a clear message from decision makers. We have now been invited to be involved in the procedures more than before, but still – we need answers to some vital questions. We would like to invest more in Croatia if the legal framework motivates us to do so.

By Darko Janevski, Renewable Energy Specialist

June 3, 2016

by AEA

IENE workshop 2nd : Developing Albania’s Hydroelectricity Potential

Speaking at the second session of the workshop IENE to exploit the hydroelectric potential of Albania, Executive Director of IENE Mr. Kostis Stambolis alleged a position that as it further develops the electric system of the country, mainly based on hydropower, will need the support of the Greek electrical system in order to achieve uninterrupted operation. A support will be based both on bilateral electricity exchanges and technical assistance and investment assistance can offer PPC.

Based on data presented by the Executive Director of IENE, and based on wide reference study has been prepared, the SE Europe Energy Outlook 2016, the total output of Albania electricity will double by 2030, from current levels of 4200 GWh in more from 8,100 GWh .With the vast majority of this electricity production come from hydropower projects by exploiting the confirmed potential of 4500 MW compared to 1460 MW currently in use.

Through presentations and speeches of representatives of the state-owned electricity corporate KESH, the Albanian energy regulator, Dr. Abaz Aliko, as Director of the Energy Department’s Energy Ministry of Policy, Agim Bregasi and Mr. Lorenz Kosta, Director of Transmission of Electricity OST and Mr. Perparim Kalo, Director known legal office Kalo & Partners gave dynamic course and very substantial investment potential of hydropower sector in Albania.

The director of the address hydroelectric PPC Mr. John Argirakis made a comprehensive presentation and valuation of the Company’s activities including large and small hydroelectric projects.

A series of presentations by PPC executives but also by the company TERNA ENERGY by Mrs. Yulia Tsiknakis and from the company Aktor from Mr. John Lefas. The workshop IENE completed with an extensive panel discussion which was coordinated by Mr. Perparim Kalo.

Source: AEA

June 3, 2016

by AEA

IENE Workshop in Tirana to Examine the Development of Albania’s Hydroelectric Potential

A one-day workshop on the utilization of Albania’s significant hydroelectric potential is convened by the Institute of Energy for SE Europe (IENE) in Tirana on June 3, 2016. This special IENE event, organized in cooperation with Albanian counterparts and under the auspices of the Albanian Ministry of Energy and Industry and of the Greek embassy in Tirana, will examine the further exploitation and expansion of Albania’s hydropower sector and propose a viable strategy for sustainable development.

With the participation of more than 120 Albanian, Greek and international energy companies, work began this morning the work of the conference organized by the Institute of Energy for SE Europe (IENE) in Tirana to consider further exploitation of large hydropower potential of Albania. The workshop IENE entitled “Development of Albania’s Hydroelectric Potential” is supported by the PPC, numerous delegation which participates in the work with specialized lectures and presentations, and the Federation of Greek Enterprises in Albania.

Opening the work of the Workshop Chairman of IENE Mr. John Chatzivasileiadis referred to the important role that Albania due to high hydroelectric potential, the creation of a dynamic regional electricity market can play. The chairman of IENE explained the very good cooperation that had IENE with all the Albanian entities in the organization of the event which, as the K.Chatzivasileiadis, embraced the initiative of the IENE contributing with their knowledge and experience.

On the same wavelength was and the speech of Greek Ambassador in Albania Leonidas Rokanas, while Albania’s Energy Vice Minister and Industry Mr. Gesim Musabelliu after having welcomed the initiative of the IENE reported in detail in the country’s energy sector giving new emphasis on comprehensive hydropower infrastructure, he said.

More specifically Mr. Gesim Musabelliu mentioned in the new under construction total hydroelectric power units include the 400 MW, including small hydropower plants and two large in the northern part of the country, made mainly from foreign investors but also by the state electricity company KESH. Also the Albanian energy minister informed the audience about the new, under construction, electricity 400 KV interconnection line between Albania and Kosovo are expected to be completed until the end of the year, will significantly enhance the security of energy supply of Albania. Finally, among other Mr.Musabelliu, he emphasized the role of international investors in the hydroelectric project area because only with constant foreign investment can develop this sector because of the many great resources available.

In his speech at the workshop IENE Chairman and CEO of PPC Mr. Manolis Panagiotakis, having hosted a number of key elements for the organization and PPC activities, referred to the role of the Corporation in the SEE region. As he explained Mr.Panagiotakis is within this wider role in supporting this initiative of the IENE wished simultaneously to enhance the possibilities for cooperation with Albanian actors in the electricity sector. Meanwhile, the president of PPC underlined the possibilities sees an investment activity in PPC hydroelectric Albanian area. Completing the work of the First Session of the workshop Ms. Alexandra Psyrri, as.director of finance and investor relations PPC (Public Power Corporation SA), explained the organizational structure and mode of operation of business with special reference to new investments and under construction units.

Source: AEA

May 17, 2016

by AEA

Construction Begins on Trans Adriatic Pipeline

ATHENS—Construction work has begun on the Trans Adriatic Pipeline, which is expected to bring natural gas from the Caspian Sea to Europe and ease reliance on Russian gas imports.

The €5 billion ($5.67 billion) project is expected to supply around 10 billion cubic meters of Azeri gas a year to European countries, enough to cover the energy needs of some seven million European households.

The Trans Adriatic Pipeline, or TAP, would transport natural gas from the vast Shah Deniz II field offshore Azerbaijan via western Turkey to Greece, Albania and then across the Adriatic Sea to Italy.

Greek Prime Minister Alexis Tsipras, the European Commission Vice-President Maros Sefcovic and delegations from eight countries on Tuesday attended the inauguration ceremony in the northern city of Thessaloniki for the construction of the 545-mile pipeline, which is expected to start operations in 2020.

“The energy map of southeast Europe is changing, and Greece is turning into an energy hub for the region,” Mr. Tsipras said during the ceremony.

The Greek premier said the investment in Greece would be more than €1.5 billion and is expected to create some 8,000 direct jobs. Greece’s unemployment rate, at more than 24%, is more than twice the eurozone’s average.

TAP is owned by BP PLC, Azeri state energy company SOCAR, Italy’s Snam SpA, Fluxys Belgium SA, Spain’s Enagas and Switzerland’s Axpo.

It is designed to link the Trans-Anatolia Natural Gas Pipeline, or TANAP, which is expected to be completed in 2018, and the existing Southern Caucasus Pipeline, or SCP, which links Turkey to the Azerbaijani gas fields in the Caspian Sea through Georgia. The three pipelines form the so-called Southern Gas Corridor.

“Southern Gas Corridor will be vital for reaching the Energy Union objectives of diversification of sources, routes and energy security,” Mr. Sefcovic said. “Timely completion is crucial so that gas from the new suppliers can flow to Europe by 2020,” he added.

Total investment for Shah Deniz II project—including the cost of drilling, platforms, terminals and pipeline infrastructure—is about $45 billion.

Mr. Tsipras said the project fits well with another gas pipeline, Interconnector Greece-Bulgaria and a liquefied natural gas project off northern Greece.

May 17, 2016

by AEA

Maros Sefcovic: Southern Gas Corridor is true diversification project

Sefcovic made the statement at the Greek Energy Forum in Thessaloniki, Greece.

As the initiator of the biggest Southern Gas Corridor project, Azerbaijan has become a very important energy player at the regional and global levels, said Maros Sefcovic, vice-president of the European Commission for Energy Union, Trend reports.

The vice-president stressed that the EU is the largest importer of energy resources in the world.

Sefcovic called the Southern Gas Corridor the true diversification project, as it will provide the European countries with a new source of gas supply [the Caspian region] and a new supply route [the Trans Adriatic Pipeline – TAP].

At the initial stage, the gas to be produced as part of the Stage 2 of development of Azerbaijan’s Shah Deniz field is considered as the main source for the Southern Gas Corridor projects.

Sefcovic said that Turkmenistan, Iraq and the Mediterranean region can also be the potential sources of gas supplies as part of the Southern Gas Corridor.

The vice-president added that the European Commission expects the first gas to be supplied to Turkey in 2019 as part of the Southern Gas Corridor, while to Europe – in 2020.

Sefcovic also stressed the importance of the TAP groundbreaking ceremony planned to be held in Thessaloniki May 17. He further said that this important event will go down in history.

The Southern Gas Corridor is one of the priority energy projects for the EU. It envisages the transportation of 10 billion cubic meters of Azerbaijani gas from the Caspian Sea region to the European countries through Georgia and Turkey.

The 870-kilometer pipeline will be connected to the Trans Anatolian Pipeline (TANAP) on the Turkish-Greek border, run through Greece, Albania and the Adriatic Sea, before coming ashore in Italy’s south. TAP shareholders are: BP (20 percent), SOCAR (20 percent), Snam S.p.A (20 percent), Fluxys (19 percent), Enagas (16 percent) and Axpo (5 percent).

May 4, 2016

by AEA

Saipem wins new contract in Azerbaijan worth $1.3bn

Saipem, along with consortium partners Bos Shelf and Star Gulf, have been awarded call-off 007 under the Shah Deniz Stage 2 Master Agreement by BP, the Italian EPC company has announced.

The total value of the contract is approximately $1.5bn, with Saipem’s share accounting for around $1.3bn, and has a duration of five years plus a possible extension for a further five.

The scope of work includes the transport and installation of subsea production systems and subsea structures, laying of fiber optic cables and production umbilicals, laying of 90 kilometers of pipelines, the activation, crewing and operations management of newbuild subsea construction vessel Khankendi, SCV diving support, remotely operated vehicle (ROV) support and marine base management post 2017.

The Shah Deniz field is located 90 kilometers offshore Azerbaijan, in water depths from 75 to 550 metres.