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Cheaper Heat Production in the Plans of KHPP
2009-04-21
Heat producers in Kaunas are the first ones to reduce the heat price. With the reduction of heat production by Kaunas Heat and Power Plant (KHPP) in the beginning of April, the heat rates to consumers are likely to fall down thereby.
Heat to Reduce by a Fifth
Price of the power, produced by KHPP, has already shown the decline by 2 cents per kilowatt-hour as of the beginning of April. The price of heat, generated by KHPP, is on decrease due to cheaper natural gas in the world market and, moreover, after the company renounced a share of its income.
According to Antanas Pranculis, the Director General of KHPP, as of the beginning of April the heat to KAUNO ENERGIJA is sold by 13.5 % cheaper, i.e. at 12.76 cents per kilowatt-hour. Therefore, heat prices are to be lowered by KAUNO ENERGIJA too, as it has already announced that from June the heat rates to consumers shall be reduced by a fifth roughly.
Actually, even though fuel showed lower prices during the last year still, the residents of Lithuania were obliged to pay for heating quite a lot over the entire season due to formerly established rates. Following the current procedure, new heat rates will be established by the National Control Commission for Prices and Energy just like every year, i.e. in June, and come into effect only in July.
Moreover, in the future heat production price shall be on further decline. KHPP is implementing the project for the construction of a new thermal plant in Kaunas. After the construction of a modern power plant in Kaunas for production of both heat and electric energy, heat production prices in Kaunas will demonstrate the lowest rates in the whole country.
Powerful Power Plant to Be Constructed
Under the order of KHPP, seventeen studies were carried out, the analysis of which was focused on determining which power plant would demonstrate the most efficient performance. It was resolved to construct a combined cycle combined heat and power plant in the capacity of 350 megawatts. Environmental impact assessment has already been carried out, the permit for the development has been obtained from the Ministry of Economy and the study of the cable connection selection for the capacity has been conducted.
In the opinion of the academician Jurgis Vilemas, the Chairman of the
KHPP is already implementing the project for the construction of a new thermal plant in Kaunas and the engineering technical supervisor will be announced shortly. The estimated investment is planned to amount to over 1 billion LTL.
“Higher competition among the electric energy suppliers will appear after the closure of Ignalina Nuclear Power Plant. It may be expected that the new thermal power plant will demonstrate economically more efficient performance as compared to the new block under construction in Elektrėnai. Ukrainian, Estonian and Russian enterprises will offer electric energy to Lithuania, but GAZPROM will be able to offer to its company in Kaunas cheaper gas and, consequently, contribute to lower electricity prices in Lithuania”, assured Mr Vilemas.
Supremacy over Others
As Mr Vilemas states, Kaunas has seen the lowest heat production prices in Lithuania over the last few years, thus, after the construction of a new power plant, it may be further expected that the heat price will remain lower than the one in the other large cities.
“Furthermore, Vilnius heat producers have no plans to renovate the current heat power plant, thus, the implemented project of the power plant in Kaunas will become the most up-to-date and efficient in Lithuania. This will be likely to give to Kaunas City quite a number of advantages. Though many may be displeased, it shall be stated that Kaunas will gain even political supremacy over the other largest cities”, spoke Mr Vilemas on a more substantial status of the city in the country.
In Search of the Best Option
The recent discussions highlight that KHPP failed to meet its investment liabilities to KAUNO ENERGIJA, therefore, it must pay 17 million LTL. According to Mr Pranculis, the Director General of KHPP, the power plant met its obligation, laid down in the contract for heat sale, and had not raised the heat price for five years.
Following the investment contract, during the first stage it was planned to invest 135 million LTL, construct a power plant in the capacity of 80 megawatts and in the course of 15 years investment shall reach 400 million LTL. However, after several project feasibility studies it was proved that the best economical benefit and efficiency would be achieved after the construction of a combined cycle combined heat and power plant.
As Mr Pranculis states that company’s negotiations with KAUNO ENERGIJA and the city municipality will focus on the search of the most beneficial solution both to the urban government and heat consumers.
© Kauno diena