TE-TOL utility company by night

TE-TOL utility company (Termoelektrarna toplarna Ljubljana)

Executive summary

Slovenia’s biggest power cogeneration facility producing electricity and heat. TE-TOL covers practically all heating for Ljubljana or some 50% of thermal energy supplied to the district heating system across Slovenia and 3% of the country’s electricity supply. Steam is supplied to the industrial customers located in the vicinity of the utility company. It is owned by the public company Energetika Ljubljana (85.20%) and the Republic of Slovenia (14.80%).

The project envisages a new combined cycle gas turbine (CCGT) unit for heat and electricity production (PPE-TOL). The gas gen-set with power of 60-90 MWe will be constructed including HRSG and steam gen-set (which will be designed according to gas gen-set) or  two smaller gas gen-sets will be constructed, each with power of 40-50 MWe and equipped with its own HRSG instead of one single larger Gas gen-set. Natural gas will be used as primary fuel and heating oil as reserve fuel. The completion of the project is expected at the end of 2016. In line with the TE-TOL’ Development Strategy, the PPE-TOL Unit is stage 1 of the TE-TOL gasification process.

Current status

TE-TOL produces heat for the Municipality of Ljubljana district heating system, electricity mainly satisfies demand in Slovenia and supplies steam to the industrial customers located in the vicinity of the utility company.  Units 1 and 2 are coal-fired, Unit 3 uses brown coal and wood chips (as a renewable energy source (RES) to generate 8-10% of total energy output on Unit 3) and the peak boiler house uses heating oil. Total installed electric power of production units is 124 MW and 350 MW of heat power (486 MW with peak boiler house). The average annual energy production volume amounts to 1300 GWh of heat energy and 400 GWh of electrical energy. With the existing coal technology we are achieving more than 18% saving of primary energy, which is above the 10% limit stipulated in the EU Directive 2004/8/EC on the promotion of cogeneration based on a useful heat demand in the internal energy market.
The useful life of Unit 1 and Boiler 2 will expire in 2020. It is expected that these Units will be shut down at the end of their life time. The existing Unit 3 was scheduled for decommissioning in 2024 but recent evaluation shows that the useful life of this Unit can be extended with renewal of certain critical parts and fulfillment of latest environmental emission limit values.

TE-TOL has obtained all mandatory permits for the start of construction and to arrange project finance for PPE-TOL investment. The prequalification procedure of tenderers for LOT1 (supply of gas-gen set and HRSG) has been completed and the contract notices for the works and services already followed for the LOT1 and LOT2.

Investment opportunity

Combined generation of heat and power (cogeneration) or CHP is an efficient, clean and reliable approach to produce both electricity and heat from a single heat source. Cogenerations' higher efficiencies reduce air emissions of the greenhouse gas associated with climate change.

The implementation of new CCGT will allow TE-TOL to maintain overall CHP efficiency by Cogeneration Directive 2004/8/EC above 80% and to stay within  the limitations set in the Directive on industrial emissions 2010/75/EU (IED) related to the emissions from industrial installations. TE-TOL will also increase utilization rates, reduce fuel consumption and curbed  the emissions of greenhouse gases.

The investment envisages: 107-134 MW of electric power, 74 MW of thermal power, and 19 MW of steam power. The estimated natural gas consumption is up to 27,000 Sm3/h, the total TE-TOL’ electricity production will be around 1050 GWh per year and total heat production will increase from current 1300 GWh up to 1500 GWh in 2020.

TE-TOL has signed a long-term agreement for the supply of heat for the Municipality of Ljubljana district heating system with the public company Energetika Ljubljana and annually awards contracts for electricity sales on the basis of the public invitation to submit tenders. For the supply of energy producing fuels, TE-TOL has a long-term contract (until 2022) for the supply of Indonesian coal where the price is defined annually, and a contract for the supply of gas that envisages the construction of the necessary gas pipeline by mid-2014 at the contractor’s expense. No contract has been awarded yet to a gas supplier pending a contract notice.
 

Project budget / Total cost

The investment cost is estimated at € 141.8 million (without VAT and financing costs) after evaluation of LOT1 and LOT2 bid proposals. The financing costs until PPE-TOL starts to operate are estimated in excess of € 13 million. The investment is divided in 8 lots where LOT 1 (gas gen-set with HRSG) is the cornerstone of the project and accounts for some 65% of the total investment. LOT 2 envisages the supply of the steam turbine. TE-TOL will sign turn-key contracts with EPC contractors or equipment manufacturers for each lot.

Project finance

TE-TOL envisages funding the larger part of the investment with debt financing. Up to € 60 million is planned to be provided by the EIB, further € 60 million will be arranged as a senior debt to commercial banks, and the remaining portion € 13 million will be own funds. Additional € 15 million increase in capital by a strategic partner is envisaged (partially already paid). These funds will be used in order to maintain an acceptable debt/equity ratio and to cover possible business risks until the PPE-TOL starts to operate.

Project advantages

After investment implementation TE-TOL plans to realize some € 150 million of total revenues with 60% earned by selling electricity in 2018 (average for 2006-2009: 50%) and 40% from heat energy sold in 2018 (average for 2006-2009: 50%). As from 2014, the budgeted EBITDA varies between € 33 million and € 37 million annually.

Contact point

Termoelektrarna Toplarna Ljubljana, d.o.o.
Toplarniška 19
SI-1000 Ljubljana
Slovenia, EU

Phone + 386 (1) 58 75 200
Fax: + 386 (1) 52 46 480
e-mail: info[@]te-tol.si