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Black Sea Energy and Economic Forum 2009


  • Adrian Baicusi, General Director, Transelectrica
  • Halil Alis, Acting General Manager, Teias
  • Pompiliu Budulan, General Director, Hidroelectrica
  • Bogomil Manchev, CEO, Risk Engineering

October 1, 2009

(Note:  Mr. Manchev’s remarks are delivered via translator.)

BOGOMIL MANCHEV:  (In progress) – power fuel, producing electricity via hydroelectric plants, coal burning, natural gas burning, and oil products.  Regarding the renewable power sources, they can also complement the other sources.  We will review the issue of providing – of ensuring – to ensure the supply of electricity for the region, in terms of feasibility, in terms of price, and in terms of to be able to prognose these supplies.  We have to meet the challenges of our time in order to resolve all the energy issues.  And it is natural for us to turn to such sources for electricity production, which will not contribute to the poisoning emissions.  And also we have to consider that its price should have to be bared for all the participants in this project. 

Currently, worldwide it is accepted that this is the nuclear energy.  Therefore, the world has invested a lot of hope in building nuclear projects.  And nuclear technologies seems only it provides good planning in economical terms. 

In the Black Sea region, except Moldova, all countries possess nuclear power plants and one of the countries, which is Turkey, is also going to build a nuclear power plant.  The purpose is to resolve the issue of energy supplies which are not sufficient in the region and to enable good planning for the electricity supplies.

There are two 1,000 megawatts units in operation in Bulgaria and we are in the process of starting the construction of two other 1,000 megawatts units.  In this way, we would like to achieve our purpose to reduce the emissions and we would like to make a smooth transition to increasing the value of energy which the Bulgarian citizens will have to pay in the future.  And this is possible if Belene Nuclear Power Plant is commissioned in 2016, according to the schedule. 

The power industry and especially the nuclear power field is one part of this industry which requires a lot of investment at this moment.  And this is worldwide.  This is an issue which remained unresolved until now, regarding Belene Power Plant, but I believe that within one year we will resolve this issue.  The Bulgarian state is going to resolve the issue by letting strategic investors enter this market and buying shares in this nuclear power plant.  The German RWE is the main participant now in – main stakeholder in this power plant and it has 49 percent of this power plant.  And the national electrical company of Bulgaria holds the other 51 percent. 

This is the situation in our nuclear field now.  In this way, we are trying to solve our primary energy supplies.  When we have these two units commissioned in Belene, Bulgaria will have 45 percent of its energy demand produced by nuclear energy.  And until 2020, Bulgaria will have 16 percent of renewable power sources.  In this way, we are going to reach 60 percent of clean sources of energy in Bulgaria, which is a great challenge for our country, for our people as well because the price of energy which our citizens are going to pay will be doubled.  And this is not due to the construction of the Belene Power Plant, but this is due to this 16 percent of renewable power sources. 

Our government is supporting the investors in these renewable sources right now.  Only for comparison, I will say that the price of energy obtained by wind plants is two-and-a-half times greater than the other price.  The solar energy costs 10 times more than the other energy.  And produced energy for the consumers is four time more expensive.  Totally, when we reach these 16 percent of renewables, these will increase up to 80 percent the price of energy, but there is no other way for Bulgaria and we have to pay for being able to produce clean energy and having at the same time enough – sufficient energy supplies to develop our economy. 

This is how we are trying to solve these issues in our country.  And we have a great share of understanding on behalf of our government and our state.  And this is crucial, especially regarding the renewable power sources because all the prices which I have mentioned are according to the law and they are being regulated by our energy regulatory commission.

And I would also like to add that the most cheaper energy in our country results to be the nuclear energy.  Bulgaria has not enough water resources.  This is why we are not having a lot of water power plants.  The water in Bulgaria is mainly used for regulation of these systems, not for power production.  A very small percent is used for power production. 

The only long term planning possibility for Bulgaria remains the nuclear sector. 

This is what I can say around this issue.  I hope the other colleagues will add to my words how they are resolving these issues. 

(Note:  Mr. Alis’ remarks are delivered via translator.)

HALIL ALIS:  Thank you very much.  I’d like to express my gratitude and thanks on the occasion of being in Bucharest and participating in this meeting along with the other participants. 

As you know, not only the Black Sea, but Turkey has coasts to the Aegean Sea and the Mediterranean.  Therefore, Turkey has got relationship with its neighbors in many respects, including the Black Seas countries and other neighbors as well.  Therefore, we attribute utmost importance to the cooperation in the field of energy, not only with our Black Sea neighbors, but also all our neighbors.  And as the manager of the Turkish transmission company, I can say that with almost all our neighbors we have got active and non-active transmission lines available with all our neighbors.  And we have joint energy transmission lines with our neighbors on the north, Georgia, on the east, Iran, and in south Iraq and Syria, and on the western borders we have got transmission lines with Greece and Bulgaria. 

And we have the feasibility studies going on concerning the project with Romania that we are in right now, a submarine, an underwater transmission line project from Constanta, Romania, and to Istanbul, which will be 400 kilometers long.  And if the feasibility studies prove the project to be feasible, we are going to be able to realize probably the longest underwater transmission line in the world. 

The reason why I started with this long introduction to my speech is that.  Prior to the economy crisis in the year 2008, Turkey had an ongoing demand, a consistent demand each year around 8 percent, 8.5 percent, which also translates as each year Turkey, in order to meet the increasing demand, Turkey needed 3,000 or 4,000 megawatts new base load power plants, which also requires a $4 to $5 billion financing in order to meet the costs of these projects.  And we can make estimates that it is even very difficult for those rich countries to meet such high costs for projects on an annual basis. 

I’d like to state something that I stated when we were working with my friend and with my colleague Mr. Baicusi before the start of this session, that we need – we require, not need, we require as countries to cooperate.  All countries need to cooperate in the field of energy production, energy industry. 

In this respect, I’d like to briefly touch upon some legislative changes that Turkey has enacted in other to facilitate the corporation in this chapter in this respect.  Turkey has transformed its legislation in accordance with the requirements of the EU as of the year 2001 and Turkey has rapidly made these amendments and changes in its legislation in order to harmonize with the EU. 

First of all, we have divided and we have separated the mechanisms of production, transmission, and consumption.  And in the year 2003, we started the virtual implementation of the market system and as of year 2006, we started the actual implementation of the market system in Turkey.  But I have to confess here that it is a very complicated process for the private sector companies to construct new power plants in order to meet the requirements of Turkey, which is around 3,500 megawatts to 4,000 megawatts.  And this is a very complicated process for them to initiate these projects.  And in order to meet this demand, in addition to the renewable energy resources incentives, we started some incentives in order to support the construction of these base load centrals – power plants.

For example, for the wind farms, government is providing the investors with a 15 years of purchase guarantee at the set price of 5.5 eurocents per watt.  But I will also have to make the confession that the price of electricity in the spot market in Turkey is higher than this 5.5 eurocents a month.  And for the next parliamentarian year, which is about to start, we have some legislative proposals which are on the agenda of the parliament, regarding not only the wind, but also solar and geothermal energy resources, which are again renewable energy resources. 

But as one of the managers of the system, I have to also make another confession which is that it’s not possible for us to meet the increasing demand with renewable energy resources.  Of course it’s not possible to meet a demand which is increasing 8 percent each year with renewable energy resources.  And therefore, with the push of the technical staff, we pushed the politicians; we pushed the parliament to enact a law which also provided the thermal power plants with a guarantee of 15 years of purchase with the condition that the power plant has a capacity of 1,000 megawatts.  And of course, they need to use the local resources of coal – local coal resources. 

And also another incentive it’s for nuclear power plants and they are provided with a 15 years of purchase guarantee. 

And since we have colleagues from Bulgaria and Romania in this august hall, I’d like to share you with some of the projects that you’re in that most of you may know of, which is connecting the Turkish electric power system to the UCTE system of Europe, the integration of the Turkish system into the UCTE.  And the process which was initiated by the offer of our neighbor, Greece, these all must finish in near future.  And with transmission lines, two to Bulgaria and one to Greece, which was licensed by the authorities of the UCTE, it’s possible to have a transmission around 1,000 to 1,500 megawatts. 

I kindly request the participants – just I assume that all the participants know the geography of Turkey and I’d like to request you that just close your eyes and think about the transmission probabilities of Turkey. 

Generally, the energy resources are on the east of Turkey in countries like Georgia, Iran, or Egypt, the countries which are on the eastern part of Turkey.  And when we have a look at the consumption side, the consumption side is on the west of Turkey, which is the European countries in general.  And we expect that as we see Turkey as a bridge of energy between these two pillars, the European countries need to see Turkey as a bridge and we expect them.  We want them to do so.  And our policies are needed to be established on the principle of win and win.  And I think it’s necessary for the European countries and for the eastern countries who possess the resources of energy need to use the opportunities that the geographical situation is providing them with. 

And with these ideas and with these feelings in mind, I wholeheartedly thank the Romanian government, which is kind of hosting us here.  And I would like to also thank you for your attention.  And I would like to inform you that I’ll be available for questions if you have any. 

ADRIAN BAICUSI:  Thank you very much.  Before I introduce my the other two colleagues, I want to give my special considerations to Mr. Manchev and to Mr. Halil, which we are good, close friends.  And to introduce myself, my name is Adrian Baicusi and I’m the head of Transelectrica.  I’m the CEO of Transelectrica. 

Before I will give my speech, I would like to introduce two of my colleagues which right now they are generating around 50 percent from the Romanian energy.  I’ll start with Mr. Budulan, who is our general manager of Nuclearelectrica and of course Mr. David, who is the general manager, president, CEO of Hidroelectrica.  And I understood with Mr. Budulan is the head of the nuclear power plant of Cernavoda, Mr. Bucur. 

Mr. Budulan, please be so kind.

(Note:  Mr. Budulan’s remarks are delivered via translator.)

POMPILIU BUDULAN:  I’m honored to be here today and to have been given the opportunity to talk to you about several issues concerning electricity in Romania.  I can only take advantage of the fact that my colleagues, my fore speakers have used their native languages, and I should do the same. 

As my colleagues here are experts in the field of transportation and hydro energy, I should only contain my presentation to the field of nuclear energy.  I shall split my time allowed with my colleague who operates groups one and two. 

Romanians are friendly and welcoming of the idea of nuclear energy.  And that is why Hidroelectrica will continue to further develop by constructing two new groups of 720 megawatts. 

In March, this year, we have established a company named Energonuclear, holding 51 percent participation, the Romanian part, which actually is Nuclearelectrica, while the other 49 percent are held by five investors. 

Currently, we are in the pre-project phase of 18 months, a period during which we have to analyze and know the costs of the investment, the project integrator, while the period of actual construction will take 77 months. 

Nuclearelectrica, our company, currently produces 17 percent of the necessary consumption of Romania.  With the two new groups, we are bound to reach a percentage of 28 to 30 percent. 

This morning, one of the speakers said that by developing nuclear groups, we are proving our socialist mentality, a wrong mentality.  I cannot agree.  Nuclear energy is an important source of energy and most importantly a cheap one.  And therefore, we can only be blind and deaf to such comments and continue building the two groups. 

I should add that Romania intends to build a new nuclear plant relying on third generation technology somewhere in the center of the country.  You all know probably that the two groups operate on CANDU 6 technology.  The other two groups shall operate on the same technology basis. 

As I promised to share my time with the operative director of the groups, to tell you just how well we managed to operate them and what is the position worldwide that we are holding and about the degree of attention that we allocate to security, to energy security. 

Thank you very much. 

IONEL BUCUR:  Good afternoon, ladies and gentlemen.  I won’t speak too much, just five minutes.  We’re in a situation when we have uranium resources in Romania and we use these resources.  We fabricate in our company the nuclear fuel for Cernavoda Nuclear Power Plant and we also produce heavy water, which is a product necessary for this technology in Romania.  And I think the capacity for heavy water could cover many other needs, including for our neighbors. 

We opened the nuclear power plant based on a very, very important principle: safety first and production after.  From this point of view, there are 39 reactors similar like we have in Cernavoda, Unit 1 and 2, and our performance indicators, which are indicators used everywhere in the world sits Unit 2 on the first place and Unit 1 of the sixth place. 

In the meantime, we develop a lot of activities in Cernavoda for the benefit of the community and to cultivate the relationship with the local community to accept our activity in Cernavoda.  We are looking very friendly to the environment and I think Cernavoda is one of the industries in Romania which has an environment license approved by bill of government.  And I think we have the capacity from the point of view people with an expertise which we can share with other countries which would like to get this technology.  And I’m referring basically to our friends from Turkey.  But I’ve heard they intended to build a CANDU and I don’t know what’s the decision today of the government, but we’d be glad to share our experience with your specialists.  Thank you very much. 

MR. BAICUSI:  Thank you very much, too, Mr. Budulan, Mr. Bucur may give the floor to Mr. David. 

MIHAI DAVID:  Thank you very much.  Good evening ladies and gentlemen.  I am very honored to be here and to have all colleagues from Turkey and Bulgaria here.  And I would like to welcome you here as I’m representing a small Romanian company having on direction 6,500 installed, around 16 terawatts a year, based on a normal hydrological year, this one not being one of the good ones.  And I am really glad to find out that Turkey, which normally have to be one of our main partners in the electricity business, is committed also on the line of erecting the important project of the submarine cable that we’d like to build. 

Of course, if our national company, Transelectrica, will appeal for the companies in the field to invest nearby for this important project, Hidroelectrica will be one of the investors there and we confirm the interest of our company in taking over an important package out of this transfer line. 

We’re also honored that thinking to the enormous power you mentioned before that Turkey is needing, up to 4,000 megawatts, this line being a quarter of the power, we’ll be able to help and supply the most developed economy in this area of the world.  And we really recognize Turkey like the European tiger economy as economies all over the world are always saying. 

We, on our side, have ambitions, plan to develop the installed capacity based on the hydrological power of the capability of Romania and we are having an aggressive investment plan for the years to come, looking to complete our 48 percent grade of utility of our possibilities and increase it in the next 10 years up to 62 percent. 

So we hope to be able to meet the market expectation and we believe in the next years more than 2,000 megawatts capacity in hydropower plants, part of them being, of course, on storage plants, hydropower plants, and the rest will be on the rivers where we still have capacity to use. 

Romanian intends – let’s say, a young player in the European Community and in energy market in this area – intends to prepare itself for the challenges in front of our economy for the period to come and to establish a real base for the companies to work right here, being able to deliver energy at a reliable price and the price to give the investors the possibilities to decide that they can move capacities, production capacities here, having one of the most important component of their cost at the right level. 

Also, in this way, Hidroelectrica is committed to secure a more important part of the Romanian consumption and also be leader for the economies around Romania.  Thus, we are very happy to find out that you’re also going this way and connecting Turkey to Greece and hoping that will not take too long up to the moment to have the submarine cable, then we’ll be able to form a very, very strong triangle, including Bulgaria on this line that will allow the economies on this part of Europe to make the jump they need to be taken much more serious from the Western side. 

I do hope that all of us together, we will be able to support the economical development which our part here, the Balkans are needing for the year to come and to close a bit the gap that is separating us from the Western World. 

I would not like to enter in details about which will be the main projects that we are looking for, but I don’t like to cross my word before telling you that we are seriously looking and we hope to meet at governmental level our friends from Bulgaria and to reopen the discussion on the third Danube hydropower plant. 

We’re having also on our schedule the first important pump storage hydropower plant in Romania.  And we are looking to prepare a second project we have on the pipeline and also to complete the ones for the new hydropower plant we have already started and we have under construction. 

So tough ambitions, important region, big demand in energy, and hope to cope with these expectations from the clients first of all. 

Thank you very much for the opportunity.  I am opened to the questions. 

MR. BAICUSI:  Thank you, Mr. David.  Before I will give you the floor to raise the questions or the issues, I would like to say a few words regarding how we are seeing right now the Romanian geography in terms of energy, especially on the grid.  And let’s not think about what we face today or we faced all the year from the beginning and probably until the end of the year – recession, credit crunch, so on. 

I hope next year on this time, we forget about this bad year because everywhere in the region there is recession.  But let’s forget about this and let’s look a little how is this area, how is this region, how is today and how probably will be tomorrow. 

If I’m thinking about five years ago, on the Romanian market – and not speaking especially about production, which was not so much changes, but speaking about the other part of the energy – I can see it was a lot of development.  And for sure in the next five years we will see more development in terms of changes in the regions because every day we are feeling that we are more and more connected with our colleagues from Central and Western Europe.  And I think the major trend will be in the next year – (audio break) – colleagues of us from Hungary, from Bulgaria, from Serbia in order to start to change our way of auctioning the capacity over the borders. 

We already signed an agreement with our colleagues from MAVIR, to start from 1st of January, 2010, a coordinated auction capacity allocation.  They’re doing daily auction tendering and we’ll going to do yearly and monthly.  The other year, we’re going to change. 

Already last week, colleagues of mine met the colleagues from Bulgaria.  They had the similar discussions and we are very closed to sign the same with them, a position paper, an agreement from 1st of January to start with them too. 

Mid of next month, our colleagues from Serbia will visit us and we are sure that they would like to have a similar.  And what is very interesting, our colleagues from Ukraine right now it’s calling us and said, hey, what are you doing there?  You are not alone in this part of Europe – which is proving us that something is happening in the region. 

More or less we have right now another interesting and ambitious plan with our colleagues from Hungary and from Austria to coupling the market.  In this case, we’ll open Romanian market to a corridor up to the Central Europe, to Germany.  And for this we said we think this more and more integration will change our lives in the next couple of years. 

The next trend which we are facing is the demand for new interconnections.  Last year, we opened a new interconnection with Hungary.  This year, we are in advanced negotiations with our colleagues from Serbia to open a new interconnection.  You already heard about this interconnection, challenging interconnections with our colleagues from Turkey.  You have to imagine this will be one of the longest interconnections in the world, 400 kilometers of undersea cable. 

Probably we’re going the same to increase the interconnections with our colleagues from Moldova.  We already have a plan, Balti-Suceava, an interconnection line.  And we already have demands from our friends from Russia and Ukraine to open a new interconnection on Isaccea.  As I said, this is another trend we’re going to face in the future. 

Another interesting trend and especially it’s related with our adequacy of the system, the safety of the system, will be renewable.  It’s very nice to have renewable, but believe me, in terms of our grid operators, this is a headache, because a renewable, especially wind I’m speaking, is not a constant energy generation.  And we have somehow to secure the system. 

Regarding the renewable, I want to tell you that in these days, if I’m counting statistically, we have an 18,000 megawatts demand, 18,000.  You have to think that the peak consumptions, the peak is 9,600 megawatts.  It’s double than the normal peak consumptions.  Okay, we don’t think all these 18,000 megawatts they are clearly realistic figures.  But we know that 3,000 megawatts are very realistic. 

You already heard of this 600 megawatts of CEZ in Dobrogea, and there are other projects which are coming.  I cannot disclose at this moment, but they are over 500 megawatts, at least another two. 

Regarding this renewable, right now the government, through some normative legislation pieces, they would encourage this renewable.  We give green certificates, depending of what kind of energy, renewable energy:  two for wind, four for solar, one I think is very – one for the hydro.  And this sits already on the exchange of the energy it’s already a trade.

In terms of – another – the last trend which I’m seeing, which will force, especially some of our colleagues from the other energy production will be the CO2, this will be a very expensive investment which we have to face in the next couple of years. 

Coming back to investments for Transelectrica, we are in the process of modernization of the grid.  We have 77 substations and believe me, not even half are modernized, which should require from us a lot of focusing in the next 10 years in the investment. 

Beside of this, we have to invest in the new lines.  You have to imagine – we told this renewable, the new two groups of power plus gas and coal on Danube, new power plants.  We have in the next five years to discharge in the system another 6,000 megawatts. 

Right now we start already the projects to double the one lineup evacuations from Dobrogea.  We’re going to start this project with the submarine cable.  Probably tomorrow, we’ll speak with our colleagues from Bulgaria in order to active this 400 kV interconnections from Dobrogea to Varna.  We have to find a solution; otherwise, we’ll be stuck with 6,000 megawatts in the next five years in Dobrogea, which you have to imagine there is a lot of money there. 

Other investments which for us is priority is to finish this 400 kV ring of Romania.  We are  going already from 220 kV, to 400, between Resita and Timisoara.  We’ll going to build a new line which will close the north ring, the part north of the ring in Gadalin-Suceava.  And we have another project – this is for Bucharest because you know so many problems we have with the Bucharest distribution of electricity.  We have to finish our 400 kV ring in order to help Enel to solve the problem in Bucharest. 

If I’m counting this – this is around ante-2017, close to 2 billion euros investment, which has to be financed, has to be developed, has to be built, and so on. 

As I said, there is a lot of changes and I want to stress again.  I think in the next five years we’ll see a lot, a completely different landscape. 

Thank you very much and please feel free to raise questions or to raise issues.

Q:  Mr. Chairman, I want to add the European opinion.  Basically, we have very big problems in all of country.  According to my idea, we have to solve this problem.  One of alternatives – we can integrate our policy, for example, interconnection and et cetera.  Other solution is the management of the demand side because we cannot increase production side.

MR. ALIS:  Right now our market works on the principle of pool, but this is not what we were imagining.  It was planned in the near future, but it has been postponed.  We are planning to.  And the market system which is organized for the countries like Romania and Bulgaria and many other countries is designed by Nord Pool is the suitable one which we have been planning to implement and which we started to implement in Turkey.  And Nord Pool is our consultant as well. 

But we had a problem of supply security in the year 2006.  Therefore, we started – all these three companies started to putting their energy production into a pool, rather than an energy exchange system, and we were implementing the principle of merit order for this energy pool, but we are trying to work on to switch the system into the energy exchange system. 

MR. BAICUSI:  Thank you very much.  Other question, please. 

Q:  Hi, I have a question for Mr. Mihai David.  You were mentioning that Hidroelectrica has now several projects in the pipeline and I know that one of them is Tarnita-Lapustesti.  And I was wondering whether you can give us a little bit more details about this project.  I know that you have submitted the documentation to obtain the environmental permit, acord de mediu, but any other information, details?  Thank you. 

MR. DAVID:  So this is the first pump storage hydropower plant that we intend to build in Romania.  We speak about 1,000 megawatt, four groups.  We are ready with the feasibility study.  We are seeking to have all the permits now.  In parallel, we’ve launched a bid for a consultant to prepare the business plan for the case as we intend to go in the market.  We will seek partners for the investment.  And we are also having discussions with several possible contractors for this and preparing with the project to launch the bid. 

We hope we’ll be able to put the bid on the market within the first part of next year. 

And on the other hand, we are having a second project on the preparation, in the pipeline, also for a pump storage unit, also around 1,000 megawatts, which we’ll be able to put on the market at the end of next year. 

Q:  Is that intended to be in a similar structure with Energonuclear or no? 

MR. DAVID:  No, we are really opened.  That’s because we say now that we are with the bid on the market to hire a consultant to go for the best practice.  And based on this experience, we’ll know how to go on with the second one.  But it is in our intention, as originally study – the final part of the original study was seven options to build such pump storage hydropower plants, we intend to build at least three in the years to come. 

Q:  Thank you very much. 

MR. BAICUSI:  Thank you very much, too.  Questions, please. 

MR. MANCHEV:  I would like to point out that we have heard a lot of future projects in the years to come.  I would like to say that they will cover more than one lifetime of a person, but the money is absent.  This current crisis which we suffer is shifting all the projects far from four to five years further.  And it is a fact that we need to relate our systems, to bound our systems.  And these systems should work as one system, but not only technically, also commercially because starting from 1st January, 2014, Bulgaria, Romania, and Greece will have to increase dramatically the price of energy because we will have to pay for the emissions. 

Turkey will be in not a pleasant position with higher prices, which is about 100 euros.  From the thermal power plants in Bulgaria, we are now having a price of 35 euros for buying from the national electrical company.  From 2014 at least 35 euros per ton will cost this carbon dioxide.  This means that at the border of the power plant, there will be a price of 70 euros in Bulgaria per ton.  Our operator needs 10 euros per ton to transport these emissions for – one megawatt. 

So the zero price in Bulgaria, the minimum possible price will be 80 euros and this if we assume that there is no inflation, which is impossible. 

All the projects which we have discussed here are for more than 100 billion euros, but there is no such money available.  Until 2025-2030, maybe we will realize all these projects.  Therefore, we need to think how to bound our systems up to 1st of January, 2014, in order not to make our citizens pay for this.  This is possible only if we mix all the energy resources and not having hydro-electrical selling for 30 euros and nuclear selling for 50 euros and the thermal plants selling for 100 euros, gas plants selling for 150 euros, we need a mixed price and we will have to integrate all these systems. 

This is the greatest challenge for our country.  We are all engineers.  We can build these plants, but we are aware about safety.  We need the understanding of our people.  And in this sense, I think that only nuclear will help us.  It can reduce the average price of this carbon offsetting.  The new power plants will cost at least 4 million euros per megawatt.  This is already happening in Bulgaria.  And it will happen in your country as well.  You are our neighbors.  And therefore the greatest challenge is to have the systems operating commercially bound together.  The technical part is clear.  That’s what I would like to add. 

MR. DAVID:  And we’re glad that Mr. Manchev has raised this issue because I had in mind coming here to raise it, but I thought to make more soft.  I’m really happy that this is coming from Bulgaria as we are seeking since years to put more energy on the Bulgarian and of course to Greece and to Turkey markets.  And up to now, we are clearly having a problem on the trading side. 

Giving us the news from Bulgaria, I can stay that we already start to work on this as our ministry has already taken a decision in the idea of mixing the energy sources.  So we are preparing to move to integrated companies, one of them using lignite, nuclear, and some water, the other one being based on hydro and coal and gas. 

As we are looking to our cost position, if you say that we’ll be able to sell on the 70 euros per megawatt base in Bulgaria, I feel happy because we are on the profit side.  Our calculations look a bit better.  So we’ll be happy to deliver whatever is needed. 

MR. DAVID:  No, no, no, no, no, no.  Speaking about 4 million per megawatt and following this trend, it might be for sure in the next years, that we will look for investments even with 5 million per megawatt. 

The most important thing is to keep the companies profitable as we shall have the source resource at the beginning to cover the set investments and also to give the confidence of the clients that we will be able to develop the system as we are planning. 

On our side, we thought from the beginning to create a base and to give the companies a chance to keep it on the profitability side, to be on the black figures.  So we’d like to build on this skeleton the new companies.  So we hope that we will be able in one year to cope with this idea and to be up and running with the mixed resources companies, hoping – and I can say by today only hoping – that we’ll match our target cost price, which is considerably lower than what you mentioned. 

Of course, we need investments, and what I’ve mentioned that we have in our plants is based on the resources already planned.  So what I told you about the pump storage hydropower plant in the development, we have already on the inside rivers, besides the third central on the Danube, which of course should be a discussion between the governments – and there we shall see which will be exactly the investors – are covered by the resources planned in the years to come out of the profitability of the company and of the help we get from the financial institutions we are negotiating with. 

I am clearly for an open trading area in this part of the world and I believe that once we’ll be able, with the help of our Bulgarian colleagues, to transfer the energy to Bulgaria, to Greece, and Turkey, and working together on this, we can speak about completely different production outputs also in Bulgaria, also in Romania.  Thank you very much. 

MR. BUCUR:  Thank you very much too.  To tell you frankly, Mr. Manchev said about let’s have the markets, bound markets.  Mr. Alis said let’s coordinate somehow our markets.  You speak about the trade area.  I am dreaming for a common market.  (Laughter.)  Yes?  This is the most simple way. 

To give you an example how much cost we can save – Bulgaria right now they need for a reserve in case of something in the system around 1,000 megawatts.  Romania needs only 700.  And each of our countries spends a lot of money and our grid operators in order to backup to have this reserve.  If we have a common market, we need only one, 1,000 and we can share the costs only to give –

(Cross talk.) 

MR. BUCUR (?):  But this is a dream which hopefully will come more fast than this common market, energy common market. 

MR. BAICUSI:  Okay, please, other issues or questions if you want to raise.  Thank you very much for this participation.  Let’s enjoy the evening, please.

Transcript by Federal News Service, Washington, D.C.

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