Central Eastern Europe region sees surge in gas-fired new build

Marseilles (Platts Energy in East Europe)--23Sep2005

Central and eastern Europe is seeing a surge in new gas-fired generation
capacity, with some 10.7GW under construction or planned over the next five
years, according to the latest edition of EiEE's power plant tracker. Despite
soaring natural gas prices, a number of the region's markets and players are
investing heavily in combined-cycle gas turbine cogeneration plant to meet
growing demand, with at least half an eye on a carbon-constrained future. 
     Gas-rich Russia, unsurprisingly, leads the way with some 4.3GW of
gas-fired plant in the pipeline, including some major individual projects such
as the 900MW Kaliningradskaya CHPP-2 project, the first 450MW CCGT unit of
which is due for commissioning next month; a second 450MW CCGT unit at the
Northwest power plant near St.Petersburg, construction of which started this
June, and another 450MW unit announced, also in June, by Mosenergo to be built
in northern Moscow. 
     Indeed, Moscow will play host to much of the new gas capacity, following
the dramatic blackout in Russia's capital in May, which paralyzed large parts
of the city and neighboring regions Kaluga and Tula. The city government has
since commissioned the construction of two new gas CHP plants and intends to
tender a further three projects this year with a combined capacity of 400MW. 
     Perhaps of most significance, however, is the 702MW Ivanovo CCGT project,
which upon commissioning in 2007, will be the first developed and designed
solely by Russian power engineering companies. The plant, which will feature
two 325MW CCGT units, each consisting of two 110MW gas turbines and a 105MW
steam turbine, supplied by Power Machines, is seen by power monopoly UES as a
precursor to the eventual nationwide introduction of Russian gas turbine
technology. Domestic technology is clearly a major driver in the massive
growth in CCGT development across the country.
     Hungary, too, is experiencing dynamic growth in new gas-fired plant,
notably in small cogeneration of under 50MWe since the introduction of
legislation that requires the mandatory offtake of its output. Of a total of
1,800MW of planned new capacity, 1,222MW is gas-fired, including a new
210-245MWe, 250MWth combined cycle gas turbine CHP plant to be developed by
EMA-Power at its plant site in Dunaujavros in northern Hungary and a new 376MW
gas and oil-fired unit to replace an existing unit at the Matra power plant,
co-owned by Germany's RWE and EnBW.
     
     Latvia's fuel of choice 
     Gas is also the fuel of choice of Latvia, where 190MW of CCGT CHP is due
to come online this year and a new 350-420MW is to be developed by power
utility Latvenergo for commissioning in 2008, intended to help the Baltic
state offset the loss of imports from neighbouring Lithuania as a result of
the decommissioning of the second reactor at the Ignalina nuclear plant.
     Major gas-fired plant projects are also planned at Malzenice in Slovakia
where Switzerland's Advanced Power and Germany's Siemens Project Ventures are
finally set to launch the construction of a 385MW facility, the country's
first independent power project, and in Slovenia, where the country's dominant
power producer Holding Slovenske Elektrarne (HSE) has joined forces with
Austria's Verbund and local aluminium producer Talum to study a 800MW CCGT
project at Kidricevo near Maribor in the northeast.
     
     Slow progress for renewables 
     There are very early signs of movement in terms of renewable energy
development, particularly in the new EU member states as they strive to meet
ambitious binding targets for renewable production by 2010. Some markets are
proving to be a little more successful than others in promoting the
development of renewables either as a result of natural advantages such as
windy, coastal regions or the appropriate support mechanisms. 
     In terms of wind power, Estonia, Lithuania and Poland, all of which have
Baltic Sea coastlines, have seen the most development. Estonia has plans to
develop some 164MW of new wind capacity at four sites over the next two years,
while over the same period Lithuania expects to see the first 60MW of wind
capacity at a series of smaller parks, the result of a government-sponsored
tender process, organized by state grid company Lietuvos Energija. Poland,
clearly, has the most potential with some 700MW currently projected for
development but developers are still running up against strong local
opposition and are further impeded by permitting problems and a still weak and
uncertain regulatory and legislative framework. 
     Bulgaria and Romania's Black Sea coast also appears conducive to the
development of wind power, with the first daring pioneers sorting out permits
for some 262MW of planned capacity around the port of Constanta in Romania and
Cape Kaliakra in Bulgaria. 

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