GE ENERGY: The bonus scheme is not sufficient for modernizing Thermoelectric Power Plants

• We need an improvement in the law concerning private-public partnerships

The bonus schemes for investments in the generation of thermal and electrical energy using high efficiency cogeneration, became functional this year. All consumers pay a tax for supporting these investments in efficient, low pollution technologies. However, in order for investments in this segment to grow, there is also a need for a law concerning private-public partnerships, said Carmen Neagu, the head of GE Energy for Romania, Bulgaria and the Republic of Moldova.

She explained: "Romania has structures which were created for supplying cities with thermal energy, except that, especially on the generation side, they are old, oversized and are extremely inefficient. The Thermal Electrical Power Plants are accumulating large debts due to the delays in receiving their subsidies from the state and from the local administrations, as well as in collecting payment from their consumers. In theory, this market segment has a high potential when it comes to implementing the new cogeneration technologies, but investors aren"t exactly rushing in with offers. The main problem is the confidence of investors in the ability of the local authorities to recoup their money. Most mayoralties don"t have the necessary expertise nor the means to implement mechanisms that would help develop a modern foundation for the public centralized heating system".

Carmen Neagu considers that the law on public-private partnerships should welcome investors by offering the regulatory framework needed for the privatization of centralized systems for generating thermal energy, in order to allow investors to make sure they can recoup their investment.

• Romania has the highest potential in the region when it comes to renewable energy

Mrs. Neagu also said she hoped that the changes to the Law no 220 concerning the stimulation of investments in the production of renewable energy would come into effect starting July 1st, and that Romania would experience accelerated growth in this sector, as it has the highest potential in this part of Europe: We need to have a balanced growth of the various types of renewable resources, which would not only allow the improvement of the wind farm potential, but of other renewable resources as well, such as biogas and biomass, sunlight and microhydroelectric plants".

The GE Energy official estimates that wind farms will have the highest growth in the near future, followed most likely by the microhydroelectric plants segment - with retooling and modernization works. Also, in the not-so-far future, there will be several production units for generating energy using biomass and biogas, a field which offers multiple opportunities for horizontal growth (greenhouses, animal farms etc).

• The absence of an energy strategy is keeping away major investors

In the near future, there are no major investments expected to take place in the major state owned units which generate electricity using obsolete coal- and gas-based technologies. The public-private partnerships, recently launched by the Government, do not concern co-generation investments, with the exception of the Cernavodă 3 & 4 and Tarniţa-Lăpuşeşti projects. " Private investors need a long term strategy, which lays the foundation for clear and stable legislation and clearly outlines future financing targets. Romania doesn"t have development strategies in the sector, only tactics and strategies for the short term (3 - 4 years), which aren"t reliable when it comes to costly long-term developments", said Carmen Neagu.

What"s important for investors is also the liberalization of the market for gas and electricity for all consumers. The measure will need to be implemented in a balanced manner, in order to allow companies to find the time and funding needed to retool and to implement energy efficiency measures. After the liberalization, major energy players will be more likely to invest in developing more projects in Romania, as they would be more certain of being able to recoup their investments through the tariffs.

Mrs. Neagu said: "Romania"s exports are increasing. Which is a good sign for the competitiveness of our products, of the measures to improve energy efficiency and to implement modern technologies. In the near future, given the future liberalization of the gas and electricity markets, an increasing number of companies will become concerned with increasing energy efficiency, through the modernization and acquisition of technologies that can lead to saving energy ".

• Wind farms to remain the center of attraction this year as well

This year, GE Energy is betting on an increase in the orders of equipments for wind farms, as well as on rising interest in cutting edge services and technologies, for ensuring the efficient management of energy and waste water. When it comes to the latter, GE technology allows the reuse of waste water to the extent of up to 80% with the added benefit of not using chemicals in its operation. There are also solutions for using the sludge resulting from the treatment of wastewater for generating energy by converting it to gas.

Carmen Neagu said: "Romania allocated a sizeable volume of European funds to the programs for the treatment of waste water, waste and water treatment plants. Unfortunately, mayoralties are reluctant in going for the more innovative solutions and always opt for the classic ones, as early as when drafting the tender books. Fortunately, the Authority for Overseeing Public Procurements now has an initiative to support the mayoralties with information and guides on new technologies, so that they no longer get avoided at public procurement options".

For the 2011-2012 period, the area of renewable energies, of wind farms in particular, remains a priority for the Romanian development plans of GE Energy, especially since there are several major projects which are still awaiting the amendments to the Law 220. GE is carefully reviewing the biogas and biomass segments. Another area of high interest is that of cogeneration, for which GE provides highly efficient technologies and solutions.