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The project for the construction of a new combined heat and power plant in Kaunas is gaining momentum: two weeks ago the Finnish company “Poyry Energy” was selected as the consultant and technical supervisor, whereas last week the project worth billion litas was introduced to the members of Kaunas City Municipality Council.

 

The more project, planned in the National Energy Strategy, is developed, the more stormy discussions are likely to arise even though its benefit to Kaunas city, which has no other secured heat producer, is obvious”, during the presentation of the project to the members of City Municipality Council stated Rimandas Stonys, the Head of Kauno elektrinė, which is implementing the project.

 

Andrius Kupčinskas, the head of the city that lacks money even for paying salaries to municipality employees, announced that the project for the construction of Kaunas Power Plant, worth one billion litas, is far from being worth any interest to him during the hard times; this is the matter of private investors.

 

On the municipality website Mr Kupčinskas explains that implementation of the project is for the benefit of businessmen, as well as their risk and responsibility, which is not to be undertaken by the municipality or affected in whatsoever manner.

 

The Mayor Mr Kupčinskas failed to reply to one German insurance company to the request to express his opinion about the project worth one billion litas. Positive opinion of the city government would establish conditions to reduce insurance charges to the builders of the power plant. Mr Kupčinskas asserted that after such a move he would definitely face accusations from opposition as regards the confusion of public and private interests, thus, he refused to prepare an official letter to the German insurers.

 

 

Mr Stonys stressed that at the present moment Kaunas Heat and Power Plant (KHPP) was the major heat producer in Kaunas but in pursuance of the renewal of the old power plant it would be necessary to inject the investment of around 350 million litas so that the existing facilities were adapted to the latest environmental and technological standards. There can be no guarantees that such investment would prove to the city because the heat, based on the calculations of specialists, would be likely to get more expensive by around 55 % to the residents. Whereas after the construction of a new power plant energy generation would clear the way to the reduction of heat production price by around 20 %.

 

“Kaunas heat economy is at a critical threshold; the city does not have any reliable source of heat production. Even the boilers of KHPP have been in use for more than 30.0, whereas in Petrašiūnai Power Plant over 40 years. From 2015 equipment of energy generation companies must be in compliance with the European standards”, explained Mr Stonys.

 

 

The new combined heat and power plant is constructed at the expense of investors only. In the course of project implementation, Western European pension funds are attracted into this, which ensure financing and transparency of mobilisation of funds. Western financial institutions agree to contribute even during the economic crisis. The project will be credited by the Western commercial banks. Credits are insured by the state German company “Euler Hermes Kreditversicherungs-AG”.

 

The Finnish company “Pöyry Energy”, which consults the construction of the power plant, will take part in organising an international tender for the general contractor of the new Kaunas Power Plant and supervising the construction process. Following the evaluation of the Register of Energy News (ENR), “Poyry” is considered to be the best world consulting and design company of combined heat and power plants.

International contract tender shall commence already in February of the coming year. In October it is expected to sign the power plant construction contract. Furthermore, a detailed feasibility study for the selection of conception of the technical design was conducted, environmental impact assessment report was prepared and approved, the permit for the development of power plant capacity was obtained from the Ministry of Economy, the study of the cable power connection selection was conducted, which is meant for energy connection with the national distribution network, as well as project financing was ensured and guarantees were obtained. It shall be stressed that GAZPROM is ready to ensure steady gas supply to the power plant for 20 years.

 

According to Mr Stonys, the new Kaunas Power Plant will come into operation in the spring of 2013. Electricity, produced in this plant, would definitely lead to cheaper heat for Kaunas inhabitants. Technology of combined cycle gas turbines is highly valued all over the world due to their low environmental pollution level and high energy generation efficiency. A number of such kind of power plants have been constructed not only in the Western Europe but also in the neighbouring Sweden and Latvia. The first power plant of such type has already been built in Panevėžys.

 

 

Some of the members of Kaunas City Municipality Council are in perturbation in terms of the fact that GAZPROM may cut off gas supply to Lithuania.

 

According to the belief of Raimundas Kaminskas, the Chairman of Anticorruption Commission of Kaunas City Council, there are not only economic but also some sort of political estimates: “It is necessary to clarify whether this project is not in conflict with the provisions of the Law on the Basics of National Security.”

 

Mr Stonys stated that such fears were flamboyant. Up to the present moment gas supply to Lithuania had never been cut off; in addition, GAZPROM is one of the shareholders of the future object, i.e. the new Kaunas Power Plant. Given that, the Russian concern itself is concerned with the successful execution of the investment project of the new combined heat and power plant.

 

 

December 2009: consultant and technical supervisor selection (Finnish company “Poyry Energy Oy”). February 2010: beginning of the international tender for power plant construction. June 2010: submission of tenders for power plant construction.

 

October 2010: signing the power plant construction contract. November 2010 – April 2013: power plant designing, construction and coordination works. From May 2013: operation of power plant.

 

 

Kaunas Heat and Power Plant: 29.6

Petrašiūnai Power Plant 46.3

Pergalė District Boiler Room 30.2

Šilkas District Boiler Room 48.2

Inkaras District Boiler Room 42.3

Critical operation threshold is 30 years

Note: Kaunas heat economy is at a critical threshold. Boilers at Petrašiūnai, Šilkas and Inkaras District Boiler Rooms are older than 40 years. Weighted average age of boilers at Pergalė District Boiler Room is getting closer to the critical operation threshold. The maintenance of these generation sources lacked the allocation of respective funds.

 

 

 

Fuel / Technology // Electric efficiency installed (%) // Investment for a unit of electric power (euro for 1 kW)

Combined cycle with a gas turbine 50-60 // 600-800

Carbon 37-47 // 1000-1200

Waste incineration 15-20 // > 7000

Biomass incineration 18-25 // > 2000

Note: combined cycle technology stands out not only for its best electric efficiency but it also requires least investment.

 

 

Current power plant / New power plant

1. Electric power (MW) 170 / 280-350

2. Total heat power (MW): 990 / ~ 670

- cogeneration (MW) 320 / 280-350

- boilers (MW) 670 / 350

3. Required investment (million LTL) 400 / 1100

4. Proportion of electricity/ heat 0.4-0.5 / 1-1.4

5. Efficiency factor of the power plant (proc.) 80-85 / 89-93

6. Annual operating conditions (million LTL) 40 / 35

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