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Russian gas concern GAZPROM, the operator of Kaunas Heat and Power Plant and the producer of heat to the city, promised to invest over one billion litas. The new power plant will produce heat energy and supply it to the whole Lithuania. Shortly the tender results will disclose who will become the engineering technical supervisor.

Responsibility for the realization of the project falls on the company KAUNO ELEKTRINĖ, which was set up last year. Politicians and urban community are discussing whether this company will manage to arrange reliable heat distribution and whether heating prices will not be likely to rise.

Considering that, the Litovskij Kurjer talked with one of the most important businessmen of the country Rimandas Stonys, the Director General of KAUNO ELEKTRINĖ and the member of the Board of Kaunas Heat and Power Plant:

 

- In 2003 Kaunas Municipality sold the power plant, owned by KAUNO ENERGIJA, as a property and not as a joint stock company. The property was acquired by a consortium. The agreement expressly defines that the power plant is purchased not by GAZPROM only, but by DUJOTEKANA as well, stating that GAZPROM would hold 51 % of portfolio of the power plant, whereas other consortium partners would own 49 % of the shares.

Following the agreement with GAZPROM, we were supposed to buy out 49 %. Both of the shareholders were believed to become investors in the course of restoration of the power plant, but in the light of economic studies made, it has become clear that there was no point in reconstructing the old power plant and the new one needed to be constructed instead. Therefore, it was resolved to do so by maintaining the given proportion of subsidiary companies (51 % by GAZPROM, 49 % by DUJOTEKANA). For the mentioned reason the new company KAUNO ELEKTRINĖ was established. In this company one Western investor, with whom the shareholders’ agreement is being coordinated, will take part too. Moreover, it will not be my company, as some people are trying to imply.

 

- A new power plant is necessary, it is beyond any doubts. In the cities, which invested into heat economy, heat got cheaper or at least got a bit less more expensive. Panevėžys is one of the examples demonstrating the rise in efficiency of heat economy.

The new power plant will produce the electric power, as well as heat. The more energy we sell, the more heat production costs will be likely to go down. Should our colleagues in KAUNO ENERGIJA manage to rationally organise supply and distribution of heat, the heat would be likely to get cheaper to the consumers.

 

- Kaunas Heat and Power Plant distributes up to 95 % to the integrated urban heating network. It is almost the sole heat generation source in the city; however, it should be remembered that the equipment of the power plant is 34 years old already. Actually, the two Russian turbines, which generate the energy and heat, demonstrate quite satisfactory performance. Nevertheless, considering the current stand, when the gas is purchased at an expensive price, performance of turbines seems to be hardly so efficient.

In 2003, when the sales contract of the power plant was signed, inflow from investment was discussed from the point of view of the founder of consortium. From 17 options, covered in the feasibility study, selection was made taking into account which one would guarantee the minimum heat price to the residents. Based on the calculations and the assessment of risk factors, it was clarified that the optimum option would be the construction of an entirely new power plant, which would generate both heat and electric power.

Following the predictions of specialists, the new power plant should start its operation in the beginning of 2013. In the short run it will be announced who has won the competition for the technical supervisor of the construction of the power plant.

 

- It is for the Municipality to decide, namely to give the heat network and production over to one hands or leave separated, and such a decision it will be. I would refrain myself from assessing the current heat economy in Kaunas, I will just admit that for us, as heat producers with the production of heat for Kaunas reaching over 90 %, reliable and solvent customers are of highest importance.

Today the system of heat economy in Vilnius and Kaunas employs approximately 900 people each (including production, distribution and transportation). Everything is “usurp power” in Vilnius. There are different variants in Europe. Should we make a comparison between Vilnius and Kaunas, the difference lies in that the latter sells half of the energy as compared to Vilnius.

 

- There are aspects leading to efficient management of economy. It is common knowledge that KAUNO ENERGIJA draws insufficient attention on the maintenance of lines, their repair and renovation works. We are aware that the situation in the company is not the best… However, the heat energy production price in Lithuania being so low (12.67 cents per kilowatt-hour), we must agree that it is unsound to have transfer price so high. Just as consumers pay an expensive price, similarly the final heat energy price is disproportionate to its production costs.

It would be easiest to call it as “economic mismanagement”. Before investing one billion into the construction of a new power plant, urban government, being in control of KAUNO ENERGIJA, and we, as heat producers, must deliberate on how to act, what to take up to avoid the situation that when the new and most modern power plant in Lithuania is received, Kaunas would not remain the most archaic heat distribution economy.

 

- This is the greatest investment throughout the history of Kaunas, because more than one million litas will be needed for investment. A Western fund is involved into the project too. At the end of March we presented to the urban government the project of the new heat and power plant. We are open to communication and discussions.

 

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