About us

Legal specialists of the Municipality and KAUNO ENERGIJA are still in the process of drafting an action against Kaunas Thermal Power Plant concerning the penalty in the amount of 17 million litas. Energy experts do not accept the breaches and promise a serious fight.

 

Yesterday Kaunas politicians were presented the plans by Kaunas Heat and Power Plant (KHPP) to construct a new thermal power plant. In order to answer the questions, Rimantas Stonys, Director of KAUNO ELEKTRINĖ, the company expressly established for the construction of the mentioned object, appeared at the meeting of the Board.

He is in charge of the company DUJOTEKANA.

The Mayor Andrius Kupčinskas explained that before now the city’s top management have not been furnished with any official information on the new object, as if lots of issues arise thereupon.  “Plenty of uncertainties are in the air, interpretations and politicking take place as regards the new power plant, acknowledged Mr Stonys. Evidently, there is the lack of information and we will provide it. “

Supposedly, the aim of the foundation of the new company KAUNO ENERGIJA is to implement investment project of KHPP, namely to construct a new thermal power plant, worth almost one billion, before 2013. Fifty one percent of shares of KAUNO ELEKTRINĖ are held by KHPP, the subsidiary of the Russian company GAZPROM, whereas 49 % - by the Lithuanian and European Union investors.

 

After asking Mr Stonys when KHPP would pay the penalty in the amount of 17 million litas, which has been the top issue recently, Vice Mayor Stanislovas Buškevičius met with an unexpected rebuff: “And when Kaunas City Municipality intends to start observing the contractual clauses that have not been adhered thus far?” Being asked to explain what specific obligations are not met by the Municipality, Mr Stonys explained that the contract was long and it was possible to find some. In the opinion of Mr Stonys no penalty is due for KHPP as, in principle, the commitments are met. Supossedly, KHPP satisfied its obligation, laid down in the Heat Sales Contract, and has not increased the heat price for five years. Following the investment contract, it was scheduled to invest 135 million litas during the initial stage, to construct a new power plant in the capacity of 80 MW and after fifteen years investment should amount to 400 million litas. Satisfaction of the latter investment obligation has been the most complicated matter for KHPP so far, as investment of 69.3 million litas was injected into the power plant before 2009.

“Would it be better if the whole power plant territory had been laid in golden tiles? After all in such a case we would have met the investment obligation, ironically spoke Mr Stonys. It is better to build a power plant that is really needed for the city, but do it later.”

Mr Kupčinskas is convinced that the penalty of 17 million litas must be recovered from KHPP in some form. Supposedly, currently legal specialists of KAUNO ENERGIJA and the Municipality are drafting an action. KHPP is able to account for the penalty directly by reducing the price of the sold heat or by investing into the timeworn infrastructure of KAUNO ENERGIJA.

 

Under the order of KHPP, seventeen studies were carried out, the analysis of which was focused on determining which power plant demonstrated the most efficient results. It was resolved to construct an object in the capacity of 350 MW, namely a combined cycle heat and power plant. Environmental impact assessment has been carried out already, 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.

There are two companies that submitted their candidatures for becoming the supervisors of the construction of the new power plant, namely the Finnish company PÖYRY ENERGY and a subsidiary in Switzerland of the Swedish engineering consulting company AF GROUP (formerly known as AF-CONSULT). The winner of the tender with seven companies invited will be revealed before 27 April.

“We have started negotiations with banks on project financing. As Western investors are getting into this, it may be expected that we will attract solid European Funds, which will take part in the project as shareholders, in which case, GAZPROM would stop being such a monster”, said Mr Stonys. According to him, in August a call for tender for the construction of a power plant is planned to be announced. In the summer 2010 it is scheduled to sign the contract on the construction of the power plant. During the period from June 2010 up to October 2012 the new power plant should be in the construction process, whereas in November and December of the same year the tests and coordination works are on the schedule. From January 2013 it is planned to put the power plant into operation.

 

Mr Stonys ensures that after the construction of the new power plant the heat generation prices in Kaunas will be at the lowest level throughout the country. This will be predetermined by the modern heat generation equipment. It is estimated that energy production costs would demonstrate a decline by more than 20 %. Current equipment at KHPP dates back to more than 34 years old. Kaunas politicians had expressed their doubts on whether KHPP would manage to guarantee the lowest price in the city, as, supposedly, investment amounting to one billion must buy off. Top management of the power plant calculate that investment will buy off within at least nine years. Hence, it is necessary to get at the minimum 100 million from the services sold every year. “We may guarantee that we will have access to technical possibilities and produce heat at the cheapest price, but, whether heat will be cheap to the consumers I do not know because the price depends on fuel, distribution and other costs”

In 2003 KHPP was purchased from KAUNO ENERGIJA by a consortium for 116.5 million litas. The consortium is organized from the Russian company GAZPROM, DUJOTEKANA and the U.S. company CLEMENT POWER VENTURE INC.”

Subscribe to our press releases

Enter your email address: