Transcript Business Overview - Black Sea Energy Conference

Black Sea Energy Conference
Bucharest April 3-5
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Power Systems DC - 1
Bo Normark
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Submarine HVDC
Interconnections,
examples and proposed
for Romania – Turkey
EU Plans for interconnections
2001
2003
8
2005
7
4
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5
9
10
1 2 3
6
Romania-Turkey
“Black Sea HVDC
Interconnection”
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EU Common Energy Policy
Romania-Turkey
“Black Sea HVDC
Interconnection”
Cross Sound, USA

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
Financial set-up

Private Limited Recourse
Financing, private banks and
investors

Tariff set by auction
Project specifics

In commercial service since 2002

±150 kV, 330 MW HVDC Light®

40 km long subsea cable between
Connecticut and Long Island

Domestic market coupling (New
York – New England)

The client is TransÉnergie U.S. a
subsidiary of Hydro Québec
Romania-Turkey
“Black Sea HVDC
Interconnection”
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Cross Sound Cable, market value
Cost
Value
2002
2005
120 MUS$
210 MUS$
Romania-Turkey
“Black Sea HVDC
Interconnection”
Estlink, Nordic Energy Link AS.
Romania-Turkey
“Black Sea HVDC
Interconnection”
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Project specific

Improved security of the electricity supply in
the Baltic States

Integration of electricity markets

Turnkey 350 MW ±150 kV HVDC Light cable
transmission system.

70 km subsea cable, 30 km land cable

Improvement of the voltage stability in both
grids

Short implementation time 19 month
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Romania-Turkey
“Black Sea HVDC
Interconnection”
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Romania-Turkey
“Black Sea HVDC
Interconnection”
Romania-Turkey
“Black Sea HVDC
Interconnection”
NorNed, Norway - Netherlands

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Financial set-up

Public limited recourse financing

Tariff set by auction
Project specifics

Commissioning year 2007

±450 kV, 700 MW Classic HVDC

580 km long subsea cable
between Feda – Eemshaven
a world record of subsea cable

Bilateral market coupling

The clients are the TSO’s of
respective country, i.e. Statnett
and TenneT
Feda
580 km
Eemshaven
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Romania-Turkey
“Black Sea HVDC
Interconnection”
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Romania-Turkey
“Black Sea HVDC
Interconnection”
Romania – Turkey, Project summary
Romania-Turkey
“Black Sea HVDC
Interconnection”
 Countries:
Romania and Turkey
 Customers:
Transelectrica and TEİAŞ
 Scope

of Works:
Turn key cost approximately
290 MEUR excluding AC
connections and strengthening
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of respective grids

Rated power: 600-700 MW

Submarine cable: >300 km

Water depth <1000m
Why HVDC? Classic or Light®
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
Romania-Turkey
“Black Sea HVDC
Interconnection”
HVDC is a well proven, straight forward, state of the art
technology and in case of the “Black Sea
Interconnection”, the only viable alternative.

The distance in excess of 300 km preclude the use of a ACsubsea cable interconnection

The distance (+ 300 km) and anticipated capacity (600-700 MW)
makes it possible to use either Classic or Light® technology

Investment cost versus technical features and loss evaluation of
the different technologies will be the decisive factor for choosing
between the two
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Project prerequisites
Romania-Turkey
“Black Sea HVDC
Interconnection”

The macro-political drivers is very good, Romania expect to be a
EU member 2007 and Turkey just commenced the accession
negotiations.

The political drivers seem to be very good, i.a. Bilateral Ministerial
protocol and MoU between Transelectrica and TEİAŞ. Additionally
Romania is already a full member of UCTE and Turkey is applying
to become one

The technical drivers are evident, in particular Security of Supply
and sharing of Spinning Reserve

Market Coupling is a clear Commercial driver and the pre-feasibility
study conducted by Transelectrica and TEİAŞ looks promising.
Stakeholders interests in the Project

EU


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EU will most likely promote the project since it will interconnect two of
its potential member countries. It could even be part of the respective
countries Energy Chapter in the accession negotiations
UCTE


Romania-Turkey
“Black Sea HVDC
Interconnection”
UCTE is a very strong promoter of bilateral interconnections and this
project fits very well into their strategy of increasing the number of
bilateral interconnections in Europe
The Romanian Government

Consider it a very important infrastructure project.

Have realised that the project is an Energy export opportunity for
Romania
Stakeholders interests in the Project, cont

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
Romania-Turkey
“Black Sea HVDC
Interconnection”
The Turkish Government

Agree with its Romanian counterparts that it is a very important
infrastructure project

Has recently launched a new regulation for bilateral Energy trading,
Market Coupling, allowing private initiatives. This has resulted in Turkish Energy
traders being interested in the privatisation of Romanian Power Plants (Thermal
and Hydro). The link can facilitate the possibility to “bring home their power”.

Can establish Turkey as an Electric Energy Hub (like it already is for Gas),
trading energy with all it neighbouring countries
Transelectrica and TEİAŞ

Consider the link important for System adequacy, Sharing of Spinning Reserve
and Security of Supply

Will most likely the ultimate owner of the link due to EU regulations and the link
being an infrastructure project that must be available to all eligible traders of
energy
Possible financing models
1.
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2.
Romania-Turkey
“Black Sea HVDC
Interconnection”
Traditional Buyer’s credits
a)
Medium term loans based on Export Credit Agency Guaranteed
Financing
b)
Long term loans from Multilateral Development Banks such as
WB, EBRD, EIB, NIB, BSTDB
c)
Combination of a) and b)
Private financial solutions
a)
Limited Recourse Project Financing with loans (from 1 above) +
equity from investors
b)
Private Insurance company ”off balance sheet”-solutions
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