Professional Documents
Culture Documents
Project Design
GSE
September 2008
1 Project Objectives
Georgia’s power generation potential comes from both renewable sources of energy including hydro and
wind power and from thermal generating capacity. Its hydro-power potential is estimated at up to 80 billion
kWh p.a., of which up to 60 billion kWh may be economically attractive. The current system consists of
about 60 hydro power stations with a maximal output capability of 8–9.5 billion kWh p.a. (i.e. 15% of the
economically feasible potential) plus about 650 MW of thermal capacity at Gardabani, south-east of Tbilisi.
In addition the construction of two units (150-160 MW) of Combined Cycle Gas Turbine power plants is
envisaged. Thermal generation is mostly used in winter to balance low water availability, but it would also
be available for export in off-peak demand season (spring-summer).
There is a significant generation-load imbalance in the Georgian power system: two-thirds of Georgia’s
energy resource is located in the Northwest, while two thirds of the domestic demand is located in eastern
Georgia, and most of the potential export market is located in countries south of Georgia (e.g. Turkey, Iran
and Iraq, all of which experience rapid economic development and growth in electricity demand). Power
delivery to these markets requires a reliable high voltage transmission network. At present only one strong
line connects West and East Georgia, the 500 kV transmission line “Imereti” – “Kartli-II” – “Kartli-I”.
Hence, in case of any fault on this line, especially during autumn / winter, a large power deficit is incurred in
the East, including frequent total system blackouts. Apart from reducing domestic grid reliability, this also
limits existing and future power swap or export potential. In addition to being an exporter of electricity,
Georgia wishes to seize an opportunity for acting as a transit country, notably for electricity exports from
Azerbaijan to Turkey.
Specifically the project will extend the Georgian main 500kV system with addition of 2 new 500kV links
from Gardabani and Zestaponi to a new 500kV substation near the Turkish border at Akhalsikhe.
Akhalsikhe will be connected to the Turkish EHV grid at Borchka asynchronously using a Back-to-Back
HVDC link at Akhalsikhe and a 400kV overhead line. The line construction will be divided between the
Georgian side (~20km) and the Turkish side (~130km). The Turkish investment is estimated to be €45
million.
The project idea is the subject of a number of studies on the Georgian/Regional Transmission Systems:
‘Feasibility Study for the Georgia High Voltage Transmission Lines Project’ by Kuljian Corporation
(funded by USTDA)
‘Regional Power Transmission Extension Plan for Caucasus Countries’ by Fichtner (funded by KfW)
‘Potential export markets for Georgia electricity’ by ECON (commissioned by Ministry of Energy of
Georgia)
‘Power Transit Capability Analysis from Azerbaijan to Turkey’ by Georgian Centre for Transmission
System Planning1 sponsored by USAID/USEA
‘Electric power transit to Turkey from Russia/Armenia’ by GSE system group
The Kuljian Fichtner and ECON studies are reviewed in Annex 1, while the GSE/GTU work is considered
in Annex 6 – Load Flows and Dynamic Studies.
1
Cooperation between Georgian State Electrosystem (GSE) and Georgian Technical University (GTU)
A companion project to facilitate the transit element is the completion of a new 500kV connection between
Georgia and Azerbaijan. The line length for this connection is estimated at 230km – 3okm on the Georgian
side and 200km on the Azeri side. The investment costs are estimated as €12 million for Georgia and €80
million for Azerbaijan.
2 Project Scope
The project requires the building and commissioning of:
3.1 Financial
In addition to benefits to the project company, other entities in Georgia benefit; GSE will benefit from the
additional energy through its network and increased reliability of the main system reducing undelivered
energy and hydro generators and other Independent Power Producers (IPPs) will be provided with the
necessary infrastructure to export excess energy to Turkey.
The addition of the second route to the 500kV main system from Zestaponi to Gardabani will increase the
reliability of the power supply from west to east in Georgia. Undelivered energy due to 500kV faults (and
indeed some 220kV outages) will be reduced.
In 2007 the undelivered energy due to faults on the 500kV system (excluding the Imereti Line) was 1.2
GWh. At an outage cost per kWh suggested by Fichtner (EUR 0.4) this represents a loss to Georgia of EUR
480,000 per annum which will be avoided by the new project.
Moreover, the number of permanent faults on the 500kV system that impact on customer supply will be
reduced. The following tables illustrate this (based on an internationally accepted rate of 0.4 permanent
faults per 100 km years):
Tables 3-1 and 3-2 show that the addition of the new internal 500kV connections (which parallel the Kartli
500kV Lines between Zestaponi and Gardabani) will reduce, on average, the 500kV faults which directly
impact on customer supply from just under 2 faults each year to 1 fault every 2 years i.e. the Imereti line
fault rate.
Strengthening the connections between Georgia and Turkey will reduce the spinning reserve requirements
for both systems. This will allow the system operators to share spinning reserve thus reducing the need to
schedule expensive thermal generation on both sides.
Future development of medium/large hydro generation in Georgia will be dependent on the availability of
markets for the energy. The hydro projects currently at the development stage (Oni, Namakhvani and
Mtkvari cascades) will have the bulk of their energy available during the summer months, the period when
Georgia already has excess capacity. Therefore they will need access to external markets to be viable for
investors. This project will have capacity to provide access to the Turkish market for these new hydro
generators; thus improving the investment climate in the Georgian power sector.
Annex 7 shows the effect on losses expected on the Georgian transmission system by the introduction of the
2 new connections to Akhalsikhe. The average percent reduction in losses is 0.26%. Assuming a national
load of 9 TWh and average generation cost of €0.025 / kWh, the avoided cost of generation is €585,000 per
annum.
The cost estimate is based on experience of similar projects and excludes VAT and all other taxes and
duties.
5 Time Schedule
The estimated project schedule is shown in Annex 5 and can be summarised as follows:
Completion Date
Loan Approval Project Assessment Report 09/08
Agreement on Financing 10/08
Loan Approval 04/09
Loan Effective 06/09
Environmental Impact Prepare ToR 09/08
Assessment
Appoint Consultant 10/09
Deliver Report 04/09
Appoint Project Consultant Prepare ToR 09/08
Appoint Consultant 10/08
Appoint Contractor(s) Issue Specifications and 01/09
Tender Documents
Tenders Due 04/09
Award Contract 06/09
Transmission Lines Route Survey 09/09
Design and Tower Spotting 10/09
Manufacture 04/10
Foundation Works 09/10
Installation and Stringing 03/11
Commissioning 05/11
Substations Design 10/09
Manufacture 03/11
Delivery 08/11
Erection 10/11
Commissioning 02/12
Converter Station Design 12/09
Manufacture 04/11
Erection 03/12
Commissioning 06/12
HVDC Trial Period 09/12
Table 5-1: Proposed Time Schedule
The proposed schedule shows that the lines can be delivered in May 2011 and the substation works
(excluding the converter station) in February 2012. This means that the new station at Akhalsikhe and the
connections to Gardabani and Zestaponi can already contribute to the reliability of the main system in
Georgia in early 2012, reducing losses and undelivered energy. The converter station will be available
before the end of 2012 and therefore should be ready for the first new HPPs expected in late 2013, early
2014.
The loan approval and effectiveness date used in the schedule is taken to be the last of the 3 loans which is
dependant on the completion of the environmental impact assessment (EIA). The effectiveness date is
assumed to be 2 months following loan approval; to allow time for loan negotiation. This delay may also be
reduced if the loan details are agreed earlier.
However, the critical path in this schedule is the EIA and the delivery of the converter station. Note that loan
effectiveness is dependent on EIA completion and it is assumed that the main contract(s) will not be
awarded until all loans are effective.
6 Turkish Market Analysis
A detailed analysis of the Turkish Power market and the potential for export from Georgian to Turkey is
attached in Annex 2. The key conclusions of this analysis can be summarised as follows:
The Turkish electricity sector has been deregulated. A large part of the generation assets are in private hands
and there is a private wholesale market for electricity. Import and export of electricity to Turkey can be
undertaken both by TETAS, the state owned wholesale trader, and 25 private companies that currently hold
wholesale licences.
Demand for electricity is growing rapidly and total electricity generation required in 2016 is expected to be
321-378 TWh, with an annual increase of 12-26 TWh or 6-7.5%. The load profile shows both a winter and a
summer peak.
Turkey is struggling to meet the surge in demand in the period to 2012 despite a massive expansion of hydro
power generation, a scheduled ramp up of coal generation using domestic lignite and plans for the
construction of nuclear power facilities.
Increased load shedding is expected in Turkey in the period to 2012 unless the government is prepared to
take draconic actions by raising end user tariffs for electricity significantly.
The electricity prices in the private wholesale market in Turkey are among the highest in Europe. The
private wholesale price increased by 13% from April 2007-April 2008 to an average of 7.7 Euro c/kWh.
The main reason for the rapid increase in private wholesale prices is that the marginal producers in the
system, gas fed generation facilities, face higher gas purchasing prices. The average gas import price in
Turkey in 2008 is estimated to 223 Euro/tcm and is expected to increase in 2009.
Wholesale prices are expected to remain high in Turkey in the medium term unless oil/gas prices fall
significantly or a very substantial expansion of coal fired power generation using domestic lignite is
sanctioned.
Turkish policymakers are very interested in importing electricity from neighbouring countries including
Georgia. Imports through a 400 kV line to Borchka in Turkey, even if it is fully utilised, would match only
2-4% of total electricity demand in Turkey and would not have a material impact on wholesale prices.
As long as Turkey allows for imports, Georgian HPPs will be competitive in the Turkish market because of
the very low marginal costs of operating HPPs.
Turkish policymakers want private sector wholesale traders to import the electricity from Georgia and
Azerbaijan and rules out TETAS providing any long term power purchase agreements at fixed prices to
exporters of electricity.
Credible private sector companies in Turkey are interested in acting as import agents for electricity from
Georgia.
Georgian hydropower projects will most likely be able to fully utilise the transmission line to Turkey for at
least 6 months of the year in the period from April to September.
These conclusions show that there is a significant market in Turkey (in the short, medium and longer-term)
for Georgian power and at attractive prices. There are some risks associated with selling to this market,
notably:
Gas/Oil prices fall significantly – this is unlikely in the current world climate
A move away from the deregulated environment to government control and sector subsidies – very unlikely
due to Turkey’s EU aspirations
Cheaper imports from SE Europe – it is unlikely that any EU based gas or coal generation could compete
with Georgian hydro generation
Turkish economic collapse – this would only delay the export opportunities but not eliminate them
7 Georgian Hydro Development
A detailed description of potential Georgian HPP development is attached in Annex 3. The key conclusions
are summarised below:
Georgia has one of the largest untapped hydro resources in Europe. The technical/economic potential is
estimated to up to 60 TWh of which approximately 8 TWh, or less than 15% of the potential, has been
developed.
In 2007, hydro generation constituted approximately 78% of total electricity in the system, thermal
generation 17% and imports approximately 5%, while about 8% of the generated electricity was exported,
primarily in the summer months, when the generation capability is at its peak due to the seasonal patterns of
the river flows in Georgia. Figure 7-1 below shows the existing annual generation pattern.
900
800
700 Import
600
500
400
Hydro generation
300
200
100
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Georgia exported approximately 625 GWh of electricity in 2007, much of it on the basis of swap contracts
with neighboring countries where excess summer generation was traded against winter generation. The net
export totaled 192 GWh.
A comparison of the wholesale electricity price in Georgia and Turkey illustrates the difference in power
purchase costs. While the average wholesale tariff for privately produced electricity in Turkey was 8.3.Euro
c/kWh in the period August 2007 to July 2008 and 9.3 Euro c/kWh in July 2008, the average price in the
same period in Georgia was 2.7 Euro c/kWh. Figure 7-2 below illustrates the differences over the year.
Figure 7-2: Wholesale prices electricity in Turkey and Georgia, March 2007–July 2008
10
Turkey private 8
Wholesale price Euro c/kWh
wholesale tariff
7
5
Georgia balancing tariff
ESCO
4
0
Septem Octobe Novem Decem Januar Februa
March April May June July August March April May June July
ber r ber ber y ry
Turkey 5,45 6,17 5,77 6,50 7,26 6,82 6,11 6,01 7,41 7,69 9,09 9,01 8,25 7,74 8,32 8,03 9,33
Georgia 2,38 2,52 1,72 1,74 0,89 1,74 2,85 3,64 3,72 4,04 3,75 3,85 2,90 1,19 1,53 1,53 1,15
The Georgian economy has been growing rapidly in recent years without a noticeable increase in the
demand for generated electricity. In 2007, when the economy grew by 12.4%, demand for electricity
generation increased by about 3%. Sluggish electricity demand was largely due to rapid energy efficiency
improvements in the sector as the transmission and distribution losses have come down significantly. Figure
7-3 below shows the assumed demand forecast for Georgia 2008-16 (GWh).
Figure 7-3:
Assumed load growth 3 % p.a
2007 (actual) 8438
2008 8691
2009 8952
2010 9220
2011 9497
2012 9782
2013 10075
2014 10378
2015 10689
2016 11010
There are several large green field sites that the Georgian government has been promoting to private sector
investors. These include the Namakhvani cascade, where a full feasibility study has been commissioned, and
the Oni and Mtkvari cascades. The government is also reviewing the opportunity of developing the Upper
Rioni river cascade between the Oni and Namakhvani cascade. The total annual generation from these sites
is estimated at 5.7 TWh, almost doubling the total hydropower generation in Georgia.
All sites are expected to be developed with relatively small reservoirs, which, combined with the seasonal
patterns of water flows, would imply that most of the generation takes place in the summer months when the
prices in Georgia are at their lowest and when the country already is a net exporter of electricity.
The figure below shows the estimated annual generation profile of large HPP projects in Georgia.
Figure 7.4: Additional generation capacity and demand growth Georgia 2016
1200,0
Rehabilitation of existing HPPs
Upper Rioni Cascade
Oni Cascade
600,0
400,0
200,0
0,0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
The levelised unit costs for new HPPs in Georgia (shown in Figure 7-5 below compared with other
technologies) indicate how competitive these new HPPs can be in the Turkish market: The hydropower
plants in Georgia have levelised costs (including grid connection costs) that are half that of nuclear, coal and
gas-based alternatives, given the high fuel prices prevailing in mid 2008. In the calculations we have
assumed a hydro power facility life time of 30 years. Given the high oil/gas and coal prices prevailing in
2008, the HPPs are clearly the least cost generation option.
As oil/gas-based units will be the marginal producer in the Turkish/Georgian system, thus setting the price
in the Turkish system after full deregulation of the wholesale market, they would determine the profit
margin of the greenfield HPPs: The 20-year equity-related IRRs of the projects are estimated at 20-24%,
which should make the sites very attractive for private investors.
Figure 7-5: Levelised Unit Costs for new Georgian HPP versus alternate technologies
90
80
60
Eu ro/MWh discounted at 11,4%
50
40
30
20
10
0
CCGT CCGT
Namakhv Mktvari Coal 55 Wind Coal 150
Oni HPP* 200 400 Nuclear
ani HPP* HPP* USD/t onshore USD/t
USD/tcm USD/tcm
Fuel 0,0 0,0 0,0 29,5 15,0 0,0 58,9 4,7 41,0
O&M 2,5 2,5 2,5 2,9 5,9 6,7 2,9 7,9 5,9
Investment 31,9 33,7 37,4 10,3 35,6 64,2 10,2 64,4 35,5
Figure 7-6 outlines the approximate electricity available for exports from the four HPP sites in an average
year, as well the carrying capacity of the line and the net capacity that would be available.
Available capacity in the line 730 730 730 730 730 730 730 730 730 730 730 730
Demand for capacity 2016 6,7 7,2 9,7 771 1003 847 842 644 448 15,9 4,6 12,2
Exportable power 6,7 7,2 9,7 730,0 730,0 730,0 730,0 644,1 447,5 15,9 4,6 12,2
It is realistic to assume that most, if not all of the large hydropower projects in Georgia will be (re-) financed
through revenues from exports to Turkey provided that the Turkish wholesale buyers of electricity are
prepared to pay 5.7–8.3 Euro c/kWh for Georgian electricity, with a start of delivery in 2013-14. If oil and
gas prices remain above 80 USD/bbl in the medium run, it is realistic to assume that such contracts can be
secured in Turkey at least at the lower end of the price range.
The construction of the transmission line to Turkey could help release up to Euro 1.3 billion of investment
into large green field hydro sites in Georgia and also facilitate the development of a range of smaller sites.
Because of the DSI taxation in Turkey on newly constructed hydropower plants, Georgian green field sites
enjoy a significant cost advantage compared with comparable Turkish sites. The cost advantage for the Oni
HPP compared with a similar site in Turkey could be as high as 20–30%, even when accounting for the cost
of transmitting the electricity from Georgia to Turkey.
Without the transmission link with Turkey, there would be limited interest in the development of
hydropower resources in Georgia unless domestic tariffs were to rise significantly or the prices in other
neighboring countries like Russia, which already is connected to Georgia with a high voltage transmission
line, would increase considerably.
Given the time it takes to develop the different hydropower projects in Georgia (3–5 years), it is likely that
Georgia will only be able to provide significant amounts of electricity for export to Turkey in the period
beyond 2013.
The prospect of having the access to a transmission outlet to Turkey will be crucial for the development of
the hydropower potential in Georgia. A potential developer of one of the larger HPP sites in Georgia will
most likely require a long-term guarantee of available transmission capacity to Turkey, preferably at a fixed
price, before making investments in the development of the site.
8 Base Case Analysis
The base-scenario for assessing the financial and economic viability of the transmission project under
consideration rests on two key assumptions:
The Turkish electricity market will be capable of absorbing up to 1,000 MW that can be channelled through
the new transmission link with Georgia.
The main source of electricity imported by Turkey will be hydropower sites developed in Georgia.
The first assumption takes account of the fact that recent projections prepared by TEIAS and EMRA suggest
that by 2012 there will be a shortfall of electricity supply from existing, committed and planned generation
facilities of the order of at least 25,000 GWh. This deficit will have to me met by new fast-track generation
projects and imports. Given the expected imbalance between demand and supply, there is little doubt that the
Turkish market could easily absorb additional supplies from or through Georgia, provided that such imports
are cost-competitive. If the current prevailing wholesale electricity prices are taken as a benchmark, then
Turkish import demand would be perfectly elastic at about 70 – 80 Euro/MWh for supplies even in excess of
the transmission link’s maximum carrying capacity of 1,000 MW.
The second assumption is based on available evidence suggesting that Georgia’s hydroelectric resources are
a lower-cost alternative to thermal generation plants fuelled with gas or coal (Annex 3, Table 3.6).
Developing the hydropower resources appears to be a profitable undertaking, particularly if a large part of
the energy could be sold in the Turkish market. Thus, establishing the transmission link with Turkey is a
necessary condition for rendering investments in Georgia’s hydroelectric sites attractive. International
tendering of the first sites is scheduled for October 2008, and the Georgian Ministry of Energy and its
advisors are confident that sufficient bidders willing to develop the sites will line up.
Supposing that the bidding process proves successful and there will be no major obstacles to developing the
sites, the first new hydropower plants would come on stream by 2014 - 15. The candidate sites are Oni (272
MW), Namakhvani (450 MW), Mtkvari (196 MW) and Upper Rioni (350 MW). The exportable output of
these plants will depend on the future domestic load to be met and the available additional supplies from
(rehabilitated) existing hydroelectric facilities and thermal plants.
As regards domestic electricity demand, it is assumed that the monthly loads will uniformly grow at 3% a
year. Figure 1, Annex 4, shows the resulting potential for electricity exports in the period 2013 - 16, subject
to the carrying capacity of the new transmission link with Turkey ( 730 GWh/month). According to this
forecast, the annual electricity exports to Turkey would rise from 839 GWh in 2013, when the transmission
line is expected to come on stream, to 4102 GWh in 2015, when the new hydropower plants are fully
operational, and drop to 4,058 GWh in 2016 (because of the additional domestic load to be met). For the
period beyond 2016, it is assumed that additional hydropower plants will meet the growth in domestic load
so that the Georgian hydropower exports to Turkey remain at 4,001 GWh/year. No consideration is given to
potential electricity supply from neighbouring countries that could be transmitted via Georgia to Turkey
whenever the line is not fully loaded by Georgian exports and domestic energy flows (i.e., in the periods
January - March and August - December).
The main assumptions concerning the costs of the project are summarized in Table 2, Annex 4. With respect
to project finance it is assumed that total basic project costs will be financed with debt, while interest during
construction (IDC) would be covered by equity to be raised by the project company. It should be
emphasized that since the loan mix and the financing terms have not yet been determined, the figures used
are illustrative in nature and, thus, do not reflect the arrangements that the potential lenders may offer.
Regarding the project revenues it is assumed that a uniform transmission/wheeling charge will apply to
recoup the project’s costs, including those of the HVDC link with Turkey. Two options are considered:
A charge based on costs, including depreciation of capitalized project costs, taxes, interest and other
allowable expenses, as approved by the regulator (accounting-cost-based tariff schedule)
A tariff set at 10 EUR/MWh during the first 9 years of operation and at 5 EUR/MWh thereafter (front-
loaded tariff schedule)
The downside of a tariff based on accounting costs is that it may call for a very high transmission charge
when the line is poorly utilized. In fact, this problem arises under the base-case scenario since it expects a
low loading of the line in the first year of operation. On the other hand, cost-based tariffs have the advantage
that they militate against cash-flow problems caused by debt service obligations (unless loan repayments
exceed depreciation). A frontloaded tariff schedule also helps coping with the high burden of debt service
during the early years; it avoids tariff spikes, but tends to generate a higher return on capital than is
necessary to recover lifetime average costs.
While the project might apply for and receive carbon credits, no such extra-revenues are considered under
the base-case scenario.
The project’s weighted average capital costs (WACC) are used to compute levelised unit costs (LUC), i.e.,
the project’s lifetime average costs (EUR per MWh transmitted). Clearly, if the annual transmission tariff is
based on accounting costs, the project’s internal rate of return (IRR) will be close to the WACC. Likewise,
the IRR will exceed the project’s WACC if the imputed lifetime average tariff is greater than LUC.
Cost Overruns
Assuming that the total EUR-loan amount is fixed at the level of estimated basic costs (EUR 220 million),
any cost overruns would have to be met with additional equity contributions (disregarding the option that the
project company resorts to the local capital market).
If the basic costs turned out 20% higher than estimated, the LUC would rise to 7.00 EUR/MWh and the
project would still break even with the front-loaded tariff schedule (IRR = 7.00% > 6.28 = WACC).
However, the project company would experience a liquidity problem in the first year of operation that could
be avoided with a cost-based tariff regime yielding average tariff revenues of 7.92 EUR/MWh and an IRR of
8.80%.
If there were a 30%-increase in basic costs, the LUC would rise to 7.71 EUR/MWh. Moreover, with the
front-loaded tariff schedule, the project would not be financially viable (IRR = 5.88% < WACC = 6.71%).
Financial viability could be achieved with a cost-based tariff schedule generating average tariff revenues of
9.25 EUR/MWh and an IRR of 9.90%.
In summary it can be argued that cost overruns of up to 30% could be absorbed through higher transmission
charges without posing a severe threat to the profitability of hydropower exports.
Delays in Hydropower Development
As is shown in the above table, a delay in hydropower development of up to 3 years would not jeopardize
the project’s financial viability under the assumed front-loaded tariff schedule, but it would saddle the
project company with severe liquidity problems in the early years of operation. A cost-based tariff regime
could ease the cash-flow problems, yet would come at the expense of a rather high transmission charges
prior to the (delayed) commissioning of the hydropower plants.
If there were a considerable delay in commissioning new hydropower plants there is also the option to
bridge the gap through thermal generation in Georgia and/or power purchases from neighbouring countries,
provided these alternative sources of supply are competitive in the Turkish market.
Line Congestion
Line congestion poses no problem for the project’s economics in the winter period since in this period the
base-case scenario assumes little line usage by power exports anyway. In the summer period, however,
scarce transmission capacity would have to be allocated to power exports because guaranteed access to the
export transmission capacity is essential to hydropower development in the first place.
No Hydropower Development
Cost-effectiveness is necessary for hydropower development; so the prospective sites will not be developed
if the costs of doing so prove excessive. All the evidence suggests that these new hydros will be profitable;
nevertheless, the risk that the sites will not live up to economic expectations cannot be eliminated. Likewise,
it is possible that economically viable hydropower sites will not be developed due to perceived
political/sovereign risks. A complete insurance against such risks is not available.
However, with and without Georgian hydropower exports to Turkey there should be opportunities for power
flows from neighboring countries to Turkey that the transmission link in Georgia could facilitate. Based on
its natural gas reserves, Azerbaijan is in the position to build new gas-based power plants with an exportable
surplus of at least 3,500 GWh/year from 2015 onwards. So the potential electricity exports from Azerbaijan
to Turkey could almost match the expected hydropower exports from Georgia. Needless to say, whether or
not Azerbaijan will exercise this option is subject to the hard-to-predict future price differentials between the
Turkish/Azeri gas and electricity markets (Azerbaijan has the choice between exporting gas or gas-based
electricity). The same caveat applies to the potential for surplus power exports from Armenia, which will
strongly depend on the availability and cost of gas imports from Iran and/or Russia. In any case, although
the potential for regional power trade through the Georgian transmission link is no insurance against the risk
of ending up with an underutilized line, it provides some comfort for the project.
Carbon Credits
Since there is no approved methodology in place that would allow the trading of the CO2-emission
reductions rendered feasible by the line, it is difficult to predict if the project will qualify for carbon credits.
It is worth noting, though, that revenues from emission trading would significantly improve the project’s
financial outlook. Based on a baseline differential of 269 kg of CO2 per MWh exported from Georgia to
Turkey (annual average of 1.06 million tons of avoided CO2), and assuming that the price for emission
reductions is 5 EUR/t, the present value of the revenues from carbon credits under the base-case scenario
would amount to EUR 70.3 million; at 10 EUR/t, the discounted revenues would be worth EUR 140.6
million, equivalent to 64% of the project’s estimated costs.
Arguably, the expected line utilization as per the base case scenario is on the conservative side (about 44%
on an annual basis). It goes without saying that additional load flows during the winter period would
improve the profitability of the project. For instance, with additional 500 GWh/year exported to Turkey, the
LUC would drop from 5.07 EUR/MWh to 4.42 EUR/MWh, and under a frontloaded tariff schedule the IRR
would increase to 11.68%, without posing liquidity problems.
Since the output of the hydropower plants is stochastic, the annual energy available for exports to Turkey
may deviate from the expected value, thus affecting the levelised unit transmission costs (other things being
equal). To illustrate the point it is assumed that the present value of energy exportable to Turkey would be
normally distributed with a coefficient of variation of 15%. The figure below shows the resulting cumulative
probability/frequency distribution of the LUC based on 1,500 iterations. The graph suggests, for instance,
that there is a 71% chance for the LUC to be below 5.50 EUR/MWh. Likewise, the probability that the LUC
is 7.50 EUR/MWh or higher is less than 2%.
120,00%
100,00%
80,00%
60,00%
40,00%
20,00%
0,00%
3,51 4,17 4,83 5,49 6,14 6,80 7,46 8,12 8,78 9,44 10,10
EUR/MWh
10 Institutional Arrangements
The institutional arrangements within Georgia for development and operation of the project are still under
review by the Government of Georgia. The preferred arrangement will be communicated during the lenders’
appraisal mission.
Annex 1
1 Other Reports
1.1 General
The project idea is the subject of a number of studies on the Georgian/Regional Transmission System:
‘Feasibility Study for the Georgia High Voltage Transmission Lines Project’ by Kuljian Corporation
(funded by USTDA)
‘Regional Power Transmission Extension Plan for Caucasus Countries’ by Fichtner (funded by KfW)
‘Potential export markets for Georgia electricity’ by ECON (commissioned by Ministry of Energy of
Georgia)
‘Power Transit Capability Analysis from Azerbaijan to Turkey’ by Georgian Centre for Transmission
System Planning2 sponsored by USAID/USEA
‘Electric power transit to Turkey from Russia/Armenia’ by GSE system group
The Kuljian Fichtner and ECON studies are reviewed in the following sections, while the GSE/GTU work is
considered in Annex 6 – Load Flows and Dynamic Studies.
The project was the subject of a feasibility study by the Kuljian Corporation (funded by USTDA) which was
completed in December 2007. This study concluded that the project “can reasonably be implemented into
the existing MoE EHV network” and that “Given the ability to secure the requisite load case commitments
contractually, and a reasonable level of capita cost control, the Project can be viewed as economically and
financially viable.”
2
Cooperation between Georgian State Electrosystem (GSE) and Georgian Technical University (GTU)
The assumptions for the financial analysis include:
US$ Million
Gardabani – Akhalsikhe 500kV Overhead Line 93.2
Zestaponi – Akhalsikhe 500kV Overhead Line 31.5
Akhalsikhe – Turkish Border 400kV Overhead Line 17.5
Akhalsikhe 500kV Substation 20.0
Akhalsikhe 400kV Substation 8.5
Akhalsikhe 500/400kV, 600MW, back to back HVDC 100.0
Converter Station
Extension of Gardabani 500kV Substation 3.0
Reorganization/ Extension of Zestaponi 500kV Substation 9.0
Contingency 10% 28.3
Total 311.0
Table 1-1: Kuljian Cost Estimates
Annuity tariffs were then calculated as the minimum tariffs that the project would need to charge its future
customers over years in order to have the “required return” (15% IRR) and thus to be break-even. For each
scenario 2 variations were analysed:
The results of the Kuljian cash flow analysis is summarised in Table 3-2:
Scenario 1A Scenario 1B
Annuity Tariff ($/MWh) 8.58 5.42
Table 1-2: Kuljian tariff calculation
In this report the Internal Rate of Return (IRR) of a project is assumed to be the discount rate for Net Present
Value of project cash flows equal to zero (NPV = 0) for 100% equity financing. For this reason the Kuljian
tariff calculation for Scenario 1B is assumed to be for ‘break-even’ cash flow i.e. project NPV zero with a
reduced IRR. Thus for IRR = 15% the required tariff is 8.58 $ / MWh for all cases in the Kuljian model.
The Kuljian study included a preliminary Environmental Impact Assessment for the proposed project which
concluded that:
“Overall, there does not appear to be major constraints from environmental impact considerations for the
feasibility of the proposed transmission lines and Akhalsikhe substation project implementation.”
Although the assessment did not identify particular areas of concern it is still recommended that a detailed
EIA study be carried out before work on the project begins. The assessment methodology is stated as being
in accordance with Georgian Ministry of Environment Guidelines (though they do not address methodology
for EIA) and World Bank/EDRB EIA protocols. Headings considered include:
Physical Impacts
land use,
water quality
air quality
flora
fauna
Socio-economic Impacts
traffic
noise
public health (EMF)
housing and utilities
cultural heritage / archaeology
Some preliminary findings are presented which suggest a low impact project where any potential concerns
can be relatively-easily mitigated against.
A plan for a comprehensive EIA is presented in addition to a translation of the Georgian environmental
regulations.
In November 2007 Fichtner issued a final report “Regional Power Transmission Extension Plan for
Caucasus Countries (RTEP)”. This report reviewed 2 new international connections between Georgia and
Armenia (Project 1) and Georgia and Turkey (Project 2). The report concluded that by implementing the
projects Georgia would profit from and share in the development momentum gained by the neighbouring
economies of Turkey, Iran, Azerbaijan and Russia. Other benefits expected from the projects included:
enhancement of power supply quality as a key factor for attracting foreign investments in industry
enhancement of power system operating practice to the standards set by UCTE, thus creating prospects for
inter-regional energy exchanges
creating the physical prerequisites and organisational basis for further steps toward a competitive regional
energy market
creation of regional energy/electricity hub in Georgia
The time horizon assumed in the RTEP report for both projects is commissioning by 2015.
For Project 2 (Turkish Connection) the study reviewed 6 options for the physical connection between the
grids. Each option was technically evaluated using weighted multi-criterion analysis considering the
following criteria:
Criterion Weighting
Maximum Export Capacity 20%
Investment Costs 25%
Reliability of Turkish Export Path 10%
Construction Lead Time 5%
Expandability of RTEP 15%
Reliability of National Supply 10%
Flexibility of Trading Scenarios 15%
Table 1-3: Fichtner Technical Decision Criteria
The cost estimates for the options ranged from EUR 72 Million (Option 1) to EUR 331 Million (Option 5).
Although Option 5 is the most expensive the analysis showed it to be the optimal solution from a technical
point of view. This is due to the significant improvements in reliability of power supply, both for export and
internal purposes.
1.3.3 Scope
Note that this option is similar to the current project proposal except for the additional connection Enguri –
Akhalsikhe.
The project is deemed feasible if it provides an investor with adequate return at a given tariff. This tariff
must be at least as high as the financial levelised unit costs (LUC) – calculated as annualised project costs
per kWh transmitted. Cash flow is then used to ensure adequate liquidity over the lifetime of 30 years.
For the purposes of cost allocation the project is divided into backbone components (the connections from
Gardabani, Zestaponi and Enguri to Akhalsikhe) for domestic and export power and export only components
(the HVDC plant and 400kV line to Borchka). Three scenarios are considered for cost allocation:
S1 S2 S3
Total Dom Exp Dom Exp
Annualised Project Cost (€M) 33.6 21.5 12.1 13.5 20.2
TWh 1.685 0.87 0.815 0.87 0.815
LUC (€cent/kWh) 2.0 2.48 1.48 1.55 2.48
Table 1-4: Fichtner LUC Calculation
The subsequent cash flow analysis showed that at tariffs equal to the LUC calculated above, IRR (7.4% -
7.8%) and ROE after tax (6.2% - 6.7%) values are not in line with what private investors would expect and
therefore the study suggests tariff increases to 2.15 cents for domestic energy and 3.44 cents for export to
make the project feasible – Scenario 4 in the report. In this case the IRR is 11% and ROE after tax is 10.7%.
The economic analysis concentrates on the main benefits described in the study:
Calculations are done to value avoided outages (reduction in undelivered energy), technical loss reduction
and trading benefits. For outage and loss reduction the study calculated the following benefits:
Note that the economic cost of power outages of EUR 0.4 per kWh is based on a USAID study – ‘Energy
Balance of the Power Sector of Georgia’, August 2006.
The trading benefits to the Georgian economy are calculated with the following assumptions:
The ECON studies were commissioned by the Georgian Ministry of Energy to analyse the potential trading
markets for electricity in the Caucuses region. The first report resulted from a general review of the
electricity sectors in Armenia, Azerbaijan, Iran, Russia and Turkey and provided preliminary conclusions on
the feasibility of exports to these markets from new hydro generation in Georgia. The second report is a
more detailed analysis of the Turkish and Azerbaijan sectors and discusses the possibility of transit from
Azerbaijan to Turkey in addition to export of new Georgian hydro. The reports’ conclusions can be
summarised as follows:
Russia: While it may have seasonal needs in the region, its medium/long term goal is to export to Turkey
and other countries. Therefore it is not regarded as a serious export market for Georgian hydro. However, if
Russia wishes to export to Turkey then transit through Georgia is an attractive route.
Armenia: Not regarded as a serious export market for Georgian hydro due to overcapacity, cheap gas prices
and plans for a replacement nuclear plant. As in the Russian case though, this overcapacity could be
exported to Turkey via Georgia.
Iran: Potentially a summer market for Georgian power transmitted through Armenia in the medium to long
term. With planned additions to the Armenian grid this will be possible.
Azerbaijan: A power sector in transition; generation capacity is growing while demand is falling due to
increased (and more realistic) tariffs and improved metering leading to increased collections. It is therefore
expected that Azerbaijan would have spare capacity which could be exported but the analysis is complicated
by the future uses of Azeri gas resources - local heating / local generation / export potential, and the
opportunity costs of not exporting gas at world market rates.
Turkey: Demand has been growing at 6-7% and the increased load shedding is expected up to 2012 as the
system struggles to meet the demand. Wholesale prices were average 11.6 USc/kWh in April 2008. The
wholesale price is expected to remain high unless gas/oil prices reduce significantly and/or a substantial
expansion of lignite plants is approved. Turkish authorities have expressed interest in a connection to
Georgia (to add to new EHV connections under construction to Bulgaria/UCTE). Contracts could be
negotiated with the state entity Tetas or private wholesale companies operating in the sector.
1.5 Comments
The Kuljian and Fichtner studies considered only Georgia’s export potential in their load flows and financial
assessments. Indeed both considered the availability of Khudoni and Namakhvani as part of the assessment.
The ECON reports concentrate on the potential markets for transit through and export from the Georgian
system.
From a technical point of view Kuljian considered only one technical solution, whereas Fichtner considered
and evaluated various technical solutions for Georgia’s connection to Turkey at Akhalsikhe. The result of
the Fichtner analysis (the optimum solution) is Option 5 which is the current project plus an additional
connection between Akhalsikhe and Enguri. As will be seen in Annex 6, this additional connection, while
being desirable for reliability reasons, is not necessary without the additional generation which would be
provided by Khudoni.
A comparison of other parameters in the current and previous studies is shown in Table 3-7 below:
The transfer capacity of the Turkish Link is evaluated differently in the reports. Kuljian assumed that the
link would handle its line capacity at a load factor of 55% in summer and 90% in winter, with 95%
availability. It is not clear from the report what this means but assuming the following:
Fichtner calculated an export potential based on current plus new build hydropower. The Fichtner study is
based on analysed power flows without transit. Fichtner also has higher Capex due to the additional line
from Akhalsikhe to Enguri.
The transfer capacities in this report are based on load flow studies performed in house by GSE, both for
export and transit. The 400kV line will be designed to accommodate the maximum transfer capability
calculated (up to 1000MW).
Both Fichtner and Kuljian calculated the Levelised Unit Cost (LUC) required to deliver a stated return on
the investment for the shareholder – using internal rate of return (IRR). The results are summarised in Table
3-8.
Kuljian Kuljian Fichtner Fichtner Comment
1A 2A
Capex (€M) 242 242 303 303
The calculated ratio Income/Finance is an attempt to compare the 2 valuations of the project.
The Fichtner analysis is based on low export volumes and delivers a less than satisfactory IRR. Higher
tariffs would be required to deliver IRR greater than 10% at these energy values.
This section of the report will provide an overview of the organisation of the Turkish market, and review
current and projected supply and demand for electricity, as well as the expected prices in the wholesale
electricity market.
2.1 Sector Organization
The Turkish electricity sector is in large part deregulated. In 2001, the government enacted the Electricity
Market Law that ushered in structural reforms in the electricity sector. The law separated TEAS, the state-
owned generation- and Transmission Company, into three state-owned companies responsible for
Generation, run by Turkish Electricity Generation Company (EUAS)
Transmission, run by Turkish Electricity Transmission Company (TEIAS)
Wholesale, run by Turkish Electricity Trading and Contracting Company (TETAS).
While the responsibility for electricity transmission will remain with TEIAS (monopoly), the private sector
is envisaged to play a larger role in generation, trading and distribution of electricity.
The new Electricity Market Law also initiated the establishment of the Energy Market Regulatory Authority
(EMRA) in 2001. The main tasks of EMRA are to monitor the power sector, natural gas and petroleum
markets, including issuing licenses, setting tariffs and ensuring competition by eliminating vertically
integrated state monopolies and allowing participation of the private sector in Turkey’s energy sector. The
Ministry of Energy and Natural Resources is responsible for overall policy in the sector.
Figure 2.1: Structure of Turkish Electricity Sector
The Turkish electricity sector is currently in a stage of transition towards a fully deregulated market. EUAS
still own approximately 40% of the generation capacity in Turkey. As part of the deregulation plans for the
sector, it is envisaged that no private sector company will control more than 20% of total generation
capacity3. EUAS’s thermal and small hydro assets have been separated into portfolio companies and will be
privatized. EUAS will only retain the large hydro power plants in Turkey in its portfolio.
The wholesale market for electricity is partly deregulated. The price for electricity provided by EUAS is
regulated and tends to be low, as most of its asset base is depreciated hydro assets with low marginal cost.
There is a competitive market for privately generated electricity where TEIAS organizes an auction for
hourly generation capacity for the following day. The EUAS’s regulated cost and the hourly competitively
tendered privately provided electricity is averaged and makes up the electricity price that TEIAS uses for on
sale to TEDAS and the private distribution company. The wholesale market for electricity is expected to be
fully deregulated by 2012, although the date for full deregulation has been extended several times in recent
years.
Much of the electricity generation takes place in the Eastern part of the country while the consumption is in
the West and South. Transmission of electricity in Turkey is controlled by TEIAS. The transmission grid in
Turkey is extensive and has low losses (around 3%), despite long transmission lines. It is possible for private
sector companies to build new transmission capacity. The transmission tariff for usage of such a tariff will
be regulated by EMRA. A maximum of 50% of the capacity in the line will be reserved for the company that
builds the transmission line until the cost of financing the line has been recovered.
The distribution sector is in the process of being privatized. TEDAS, the state owned distribution company,
has been separated into 20 regional companies. A private distribution company operates one distribution
region in Turkey. The tender for the privatisation of state-owned distribution companies is expected to take
place before 2010.
Companies with an annual consumption in excess of 3 GWh are allowed to freely choose their supplier of
electricity.
3
Please see Electricity Market Law Turkey Law Section 2, article 2
2.3 Generation Mix
Turkey has limited domestic energy resources and has become increasingly dependent on imports to fuel its
rapidly growing demand for electricity. The most significant domestic energy resources, which are currently
proposed for development, are hydropower and low quality lignite coal.
The development of the fuel mix in Turkey from 1971 to date is illustrated in the graph below. Most of the
generation expansion from 1990 onwards has come through a rapid growth in gas-based generation using
imported gas, mainly from Russia. The private sector has driven the expansion of gas-based generation,
which is characterized by low capital and high fuel costs compared with other generation technologies.
Figure 2.1: Fuel Mix Development in Electricity Generation, 1970–2005
TEIAS has also made projections for the energy mix for electricity generation in Turkey to 2016. The
projections include existing generation, projects under construction and projects that have received
government approval for development.
As can be observed in figure 2.3, the Turkish electricity market is experiencing an increasing mismatch as
supply has struggled to keep up with surging demand. The situation is expected to deteriorate further in the
coming years, resulting in increased load shedding.
350
Demand (scenario 1)
Annual generation TWh in Turkey
300
Demand (scenario 2)
Other
250
Hydro
200
150
Gas
100
Oil
50
Coal
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
3 Source: TEIAS
Most of the gas used to generate electricity in Turkey comes from Russia and is piped across the Black Sea,
with Azerbaijan and Iran being other suppliers. The increase in gas-based generation has exposed the
Turkish private wholesale electricity market heavily to a sharp increase in oil and gas prices. The average
gas price in Turkey in 2008 is expected to be 223 Euro/tcm, giving a generation cost from gas fired power
stations of 5–9 Euro c/kWh depending on the thermal efficiency of the plants (29–56%). Given the growing
security of supply concerns that increased gas based generation creates among Turkish policymakers and the
significant importation of inflation through the increasing price for gas, the government in Turkey is
interested in slowing the growth in the use of gas as feedstock for power production.
An expansion of the utilisation of hydropower resources is seen as one way of reducing the exposure to gas.
A significant hydropower expansion is underway in Turkey. Between 2006 and 2008, the Turkish
Hydropower Planning Agency (DSI) auctioned, to the private sector, the rights to develop a total of more
than 7,500 MW of new hydro capacity with expected annual generation in excess of 27 TWh. Since not all
of the sites will be developed, TEIAS estimates total hydropower generation in Turkey to be 67 TWh in
2013. Turkey will then have utilized the most economically feasible half of its potential. It is also worth
noting that because of climate change, generation of electricity from existing HPPs in Turkey is expected to
decline by 10% by 2020, especially affecting the HPP sites in South Eastern Turkey4.
The generation licenses for new hydropower facilities are tendered for by DSI. Qualified private sector
companies bid on the highest water usage tax they are willing to pay to DSI per kWh generated. The DSI tax
fluctuates significantly depending on how attractive the hydropower site is for developers.
The tenders have attracted significant interest. Twenty one companies participated in the tender for the 240
MW Cizre Baraji HPP site in January 2008 which attracted a bid of 3.7 Euro c/kWh from Aydınlı Enerji -
the winning company. Econ estimates that this project needs a levelized tariff of at least 6.7 Euro c/kWh to
offer a reasonable return for investors. The 19 MW Catak HPP in the Rize region in Turkey fetched an all
time high DSI tax charge of approximately 4,1 Euro c/kWh in a tender in May 2008. The DSI tax is
expected to increase further if the oil and gas prices continue to increase on world markets.
The government of Turkey is, therefore, taking out most of the expected difference in the cost between the
cost of generating electricity from HPPs and the long run marginal cost in the electricity system, through
heavy taxation of HPP plants.
4
See Europe’s hydropower potential today and in the future: Bernhard Lehner etc 2001
Table 2.2: DSI Tax Charge Greenfield HPP Developments, 2006–2008
Project name Installed capacity MW Annual production GWh Load factor % DSI tax Euro c/kWh
Cizre Barajı ve HPP 240 1 208 57,5 % 3,68
Dereköy-Demirkapı HPP 105 366 39,8 % 3,43
Çamlıca HPP 110 376 39,0 % 3,37
Alara Enerji Grubu HPP 187 622 37,9 % 3,06
Narlı HPP 130 402 35,3 % 2,78
Kayraktepe HPP 290 768 30,2 % 2,50
Aksu-Anakol HPP 120 344 32,7 % 2,49
Kavşakbendi HPP 140 652 53,2 % 2,34
Ç etin Bar. Ve HPP 350 1 237 40,3 % 1,91
Arkun HPP 222 790 40,6 % 1,68
Silvan Barajı ve HPP 160 681 48,6 % 1,36
Silopi Enerji Grubu HPP 140 356 29,1 % 0,82
Alkumru Bar.HPP 222 812 41,8 % 0,55
Sami Soydam Bar.HPP 175 515 33,6 % 0,42
Ayvalı (Çoruh) HPP 125 409 37,4 % 0,28
Kemah Bar ve HPP 135 494 41,8 % 0,04
Dilektaşı Bar.HPP 125 328 30,0 % 0,04
Karakurt HPP 110 342 35,5 % 0,02
Average 171 595 39,1 % 1,71
Source: Econ calculations based on information from DSI using a Turkish Lira/Euro exchange rate of 0.5431
Due to the rapid increase in the price of oil and gas, coal generation based on domestic lignite and imported
hard coal has become more attractive. But with the prices of Australian hard coal, following the prices of oil
and gas upwards and approaching 100 Euro/tonne in June 2008, an increase of 50% from 20075, generation
cost of new coal fired generation based on imported coal is approaching 6-8 Euro c/kWh. As a rule of
thumb, an increase of hard coal prices of 25 Euro/tonne will increase generation cost for coal fired power
plants by approximately 1 Euro c/kWh.
Domestic lignite is the least cost expansion alterative for Turkey, provided that no price is set on carbon
emissions. Turkey has reserves of at least 8.1 bn. tonne of mostly low quality lignite. 80% of remaining
reserves have a calorific value of less than 2,500 kcal/kg6. Using domestically produced lignite for power
generation will mitigate the increasing security of energy supply concerns for Turkish policymakers and
lower the cost of generating electricity.
The Turkish government intends to expand lignite production significantly in the coming years. A total of
5,000 MW of new domestic lignite generation capacity is planned. This could produce as much as 38 TWh
of electricity annually, an increase of approximately 20%7. In order for lignite to substitute for gas based
generation in any meaningful way, Turkey needs to build at least 10,000 MW in new capacity by 2016 in
addition to the 5,000 MW currently planned8.
The lignite generation expansion will take place despite strong local opposition to the construction of new
plants, EU accession requirements which sets strict requirements on emissions from the power sector and
possible post Kyoto CO2 emissions reduction commitments. A significant lignite coal generation expansion
could be seen as a last resort option for an energy system squeezed between rapidly rising energy costs and
growing energy security concerns.
A significant expansion of lignite production could replace gas as base load production in Turkey and reduce
base load generation cost. However, domestic lignite prices have tended to move up with the price of
imported coal and gas and the cost advantage of domestically produced lignite is uncertain in the medium
and long run.
In addition to hydro and domestic coal, the government in Turkey intends to rely on nuclear energy to meet
the future energy demand. A tender was published in the spring of 2008 to construct a 3,000–5,000 MW
nuclear power plant9 with several other power plants at the planning stage. A 4,000 MW nuclear power plant
could produce as much as 30 TWh annually. However, it may take as much as 10 years from tender close to
the nuclear power plant can be commissioned and the cost of nuclear energy may be approximately 5-7 Euro
c/kWh on a levelized basis depending on the cost of capital.
In summary, the rapid increase in demand for electricity in Turkey is expected to be met a combination of
tapping domestic hydro resources to meet peak demand, and expanding domestic lignite and nuclear
5
Please see Global Coal RB index for details www.globalcoal.com
6
Please see Resources, quality and economic importance of solid fossil fuels in Turkey 2004
http://popups.ulg.ac.be/Geol/docannexe.php?id=1468
7
Assuming a thermal efficiency of 40%.
8
This observation is shared by Hayati Cetin the head of project approval department in the Ministry of Energy and Minerals in
Turkey in email correspondence with Econ 17/6 2008.
9
See http://www.tetas.gov.tr/nukleer/eng/nklr.htm for details.
production to meet base load demand. Additional natural gas generation may also be expected if gas prices
reduce or as a short term solution to the growing deficit.
However, provided that electricity can be produced at a competitive price, there should be room for
significant imports of electricity to Turkey.
The import of electricity on the proposed link from Georgia would constitute 1–3% of the total electricity
consumed in Turkey in 2013 and would therefore not be expected to have a material impact on prices in
Turkey.
Figure 2.4 below represents a best-case schedule for new lignite and nuclear electricity generation capacity
in Turkey. If the demand growth does not moderate, Turkey is likely to become more reliant on gas fired
power stations and/or load shedding to balance supply and demand in the period to 2016.
Figure 2.4: Electricity Balance with Confirmed Projects and Imports in 2016
9,00
8,00
Average private wholesale prices
7,00
in Turkey Euro c/kWh
6,00
5,00
4,00
3,00
2,00
1,00
0,00
7
m 7
7
07
au 7
se 7
07
no 7
07
08
m 8
8
m 8
8
08
8
de 7
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.0
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0
0
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g.
p.
s.
n.
b.
n.
v.
ai
ai
ar
ar
ju
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ok
ap
ap
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10
One example is the projected 2000 MW Belene nuclear reactor project in Bulgaria. The project is projected to cost
approximately 5 bn. Euro or approximately 0,33 Euro/kWh generated (Financial Times 23 June 2008)
Name of company Annual turnover Contact details
Enerjisa Elektrik (fully 9,9 bn. Euro (Sabanci 2007) www.sabanci.com
owned by Sabanci Group
Zorlu Electric Enerjisi 3,5 bn. Euro (2005) www.zorlu.com.tr
Ak Enerji 112 m Euro (Ak Enerji 2006) www.akenerji.com.tr
Econ met with several energy companies in Ankara in May 2008 that indicated an interest in acting as
wholesale traders for electricity imported from Georgia. However it is uncertain to what extent these
companies are willing to provide long term power purchasing contracts to sellers of electricity from Georgia.
This has to be negotiated individually by the developer of projects in Georgia/Azerbaijan and the private
wholesale traders.
EMRA has issued regulations for import and export of electricity to Turkey12. The regulations specify the
conditions that need to be fulfilled in order for an entity to engage in import/export of electricity. The
criteria include:
Ability to operate the national electricity system in a parallel with the counterpart system
Ability to operate a generation facility or a unit of a generation facility in the country in parallel to the
importing system
Operation in islanded mode
Ability to establish asynchronous parallel (DC) connection.
The regulation also stipulates that information be submitted about the source, duration and quantity of
electricity that will be imported.
Applications for import/export of electricity will be reviewed by the Ministry of Energy and Natural
Resources, and the opinion will be taken from TEIAS regarding the transmission capacity on the Turkish
side of the border. If the opinion is positive, the application will be posted on the website to the Ministry of
Energy and Natural Resources.
In an interview with Econ in Ankara in May 2008, Mr. Kemal Yildir, Assistant General Manager in TEIAS
confirmed that there is capacity to receive approximately 1000 MW in Borchka in Turkey but that it would
be difficult to increase the export volume beyond 1000 MW without constructing additional transmission
capacity from Borchka to Central and Western Turkey.
TEIAS will undertake a competitive tender to price the usage of the capacity if there are more companies
that want to utilize the capacity in an interconnection transmission line than there is capacity in the line.
EMRA rules states that companies that want to utilize the capacity in the line need to get an approval from
the Ministry of Energy in Georgia. In other words, the Georgian Ministry of Energy can to a large extent
determine the electricity tariff for export of electricity to Borchka from the Georgian grid. If the Ministry of
Energy in Georgia does not approve export of more than 1000 MW (the assumed capacity in the line) there
will be no tender on the Turkish side and therefore a regulated transmission tariff.
2.6 Feasibility of Electricity Imports from Georgia
Turkey is expected to experience significant shortages in its power sector in the medium term. The Ministry
of Energy and Minerals in Turkey indicated a strong interest in imports of electricity from neighboring
countries, including Georgia to help make up the shortfall.
Approximately 1,000 MW of available transmission capacity is available from Borchka in Turkey to
transport imported electricity South and East in Turkey. In other words, it will most likely at this stage only
justify one 400/500 kV line from Georgia to Turkey in the short/medium run without expanding the
transmission capacity on the Turkish side from Borchka.
The prices in the Turkish private wholesale market are high at present and are expected to remain high as
long as oil/gas prices stay above 80 USD/barrel as shortages persist.
The Ministry of Energy and Minerals in Turkey wants the Turkish private sector to act as wholesale traders
for import of electricity from Georgia and will not provide any long term power purchase agreement (PPA)
through state owned TETAS. It is uncertain to what extent the private sector is willing to provide long term
PPAs as the electricity wholesale market in Turkey is in transition and operates as a spot market at present.
12
http://www.emra.gov.tr/english/regulations/electric/import/import.doc
Because of the very heavy taxation on new HPP sites for development (up to 3,7 Euro c/kWh in DSI water
usage tax alone), the most prospective large scale Georgian HPP sites have a significant cost advantage
compared with Turkish HPP sites.
Georgia has one of the largest untapped hydro resources in Europe. The technical/economic potential is
estimated to up to 60 TWh of which approximately 8 TWh, or less than 15% of the potential, has been
developed. But the country has struggled to attract private sector capital to develop the resources. There are
several reasons for this, but the principal reason is that the tariff levels in Georgia and neighbouring
countries, that are connected with Georgia with significant transmission capacity, (Azerbaijan, Russia), have
been too low to support new investments.
900
800
700 Import
600
500
400
Hydro generation
300
200
100
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: ESCO
Georgia exported approximately 625 GWh of electricity in 2007 according to ESCO, much of it on swap
contracts with neighboring countries where excess summer generation was swapped with winter generation.
The net export was 192 GWh.
Figure 3.3: Wholesale prices electricity in Turkey and Georgia, March 2007–July 2008
10
Tu rkey p rivate 8
Wholesale price Euro c/kWh
w holesale tariff
7
5
Georgia b alan cing tariff
ESC O
4
0
Sep te m Octob e Nove m Decem Janua r Feb rua
March Apr il May Jun e Ju ly Au gust Mar ch April May June July
ber r b er ber y ry
Tur key 5 ,45 6,17 5,77 6,50 7,26 6,82 6,11 6,0 1 7,41 7,69 9,09 9,01 8,2 5 7,74 8 ,32 8,03 9,33
Geor gia 2 ,38 2,52 1,72 1,74 0,89 1,74 2,85 3,6 4 3,72 4,04 3,75 3,85 2,9 0 1,19 1 ,53 1,53 1,15
800
600
200
0
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
Monthly demand 2007 786 707 753 671 563 524 565 576 544 578 695 851
Monthly demand 2016 1025 923 982 876 735 683 737 751 710 754 906 1110
600,0
400,0
200,0
0,0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: Econ Poyry calculations based on Gross Energy and ESCO numbers
Of the four cascades assessed, the Oni cascade provides most winter generation followed by the
Namakhvani cascade downstream on the Rioni River. In addition, the following observations can be made:
Namakhvani has a quite weak firm generation (90% guaranteed generation) of 55%, compared with
79% for Oni HPP. This will make the project more difficult to finance. This firm generation of the
Namakhvani cascade is likely to increase if the Oni HPP is developed with a reservoir that will
improve the regularity of the water flows downstream on the Rioni River.
The Upper Rioni HPP is located between the Oni cascade and the Namakhvani cascade and has been
costed by an international engineer. Developing this cascade requires that the whole upper Rioni river
be tunneled, so the environmental movement may object to such measures.
There are concerns about the seismic risks associated with the development of the Oni and
Namakhvani HPP. The sites are located in the most active seismic area in Georgia However, the
seismic risks are most likely to be contained by building a reinforced dam suited to withstand
earthquakes of magnitude 9 on the Richter scale
A developer has already been identified for parts of the Mtkvari cascade, which makes the rest of the
cascade less attractive for other investors to develop.
If all of the above large HPP projects are developed, Georgia will have a significant surplus of electricity in
the summer months. It will be impossible to realize any of the projects without most of the electricity being
exported to neighboring countries.
13
Please see http://esmap.org/news/featured.asp?id=56 for details.
been set at 30 years. Equipment prices in Romania have been used as a reference case. All costs have been
discounted at a rate of 11.4%. For gas and coal, two different fuel price scenarios have been used (for
assumptions, see Table 3.3).
Figure 3.6: Levelized Costs of Georgian HPPs and Alternative Generation Technologies
90
80
60
Euro/MWh discounted at 11,4%
50
40
30
20
10
0
CCGT CCGT
Namakhv Mktvari Coal 55 Wind Coal 150
Oni HPP* 200 400 Nuclear
ani HPP* HPP* USD/t onshore USD/t
USD/tcm USD/tcm
Fuel 0,0 0,0 0,0 29,5 15,0 0,0 58,9 4,7 41,0
O&M 2,5 2,5 2,5 2,9 5,9 6,7 2,9 7,9 5,9
Investment 31,9 33,7 37,4 10,3 35,6 64,2 10,2 64,4 35,5
Table 3.2: Generation Georgia and spare transmission capacity to Turkey 2016
2016 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Oni Cascade 81,8 74,3 85,9 146,4 202,5 182,7 183,1 186,4 126,7 104,7 89,5 86,2
Namakhvani Cascade 70,0 58,7 73,1 253,3 257,0 226,3 171,4 109,8 135,1 163,7 101,4 23,7
Mtkvari Cascade 29,1 27,2 33,9 138,2 188,7 112,9 58,1 29,8 23,3 27,0 29,3 29,5
Upper Rioni Cascade 85,2 71,4 88,9 308,3 312,8 275,3 208,5 133,7 164,4 199,2 123,4 28,8
Rehabilitation of exisiting HPPs 120,5 127,8 128,6 122,6 149,6 141,0 184,3 179,4 123,7 83,6 108,4 106,1
Export of electricity 2007 6,7 7,2 9,7 7,1 64,3 68,7 208,4 180,5 40,1 15,9 4,6 12,2
Load growth to 2016 3% p.a. 240 216 229 205 172 160 172 176 166 176 212 259
Available capacity in the line 730 730 730 730 730 730 730 730 730 730 730 730
Demand for capacity 2016 6,7 7,2 9,7 771 1003 847 842 644 448 15,9 4,6 12,2
Exportable power 6,7 7,2 9,7 730,0 730,0 730,0 730,0 644,1 447,5 15,9 4,6 12,2
The figures indicate that there would not be adequate capacity to transmit all the electricity generated from
the 4 green field sites in April, May, June and July of 2016. This issue would be resolved if the Mtkvari
cascade were not developed as it is a peaking plant with generation mainly in the spring and summer. With
Mtkvari HPP developed, the demand for capacity in the summer months in Georgia would be approximately
4.4 TWh and without Mtkvari approximately 3.8 TWh.
Georgia also has spare gas-fired electricity capacity and the country is still enjoying import prices of gas that
are approximately 50% below the gas prices in Turkey (an average price of approximately 111 versus 223
Euro/tcm). The open cycle gas turbines in Georgia have a thermal efficiency of 29–38% vs. 50% + for
newly installed combined cycle gas generators in Turkey. The new 110 MW open cycle turbine installed by
Energy Invest in Gardabani could be converted into a combined cycle unit, increasing the thermal efficiency
to approximately 50%. If the gas import price will remain significantly lower in Georgia than in Turkey, this
gas fired power station could provide electricity to Turkey at a cost-competitive price. A 150 MW combined
cycle plant could generate as much as 100 GWh per month. The big question is whether Georgia will
continue to enjoy its currently favorable gas import pricing regime from its neighbors Russia and
Azerbaijan. The other gas-fired power stations in Georgia have a low thermal efficiency (around 30%) and
are therefore unlikely produce electricity cost-competitively in the medium term.
14
Numbers taken from World Bank Energy Equipment Cost Survey July 2008. Please see
http://esmap.org/news/featured.asp?id=56 for details
15
Nuclear costs include Euro 233 million for decommissioning and Euro 0,7/MWh for waste disposal
16
Total capital expenditure, excluding financial cost
17
Lower heating value (LHV)
18
Million British Thermal Units (MBtu) is a common unit for natural gas. Euro 1,47 /MBtu for coal corresponds to Euro 37
/tonne. Nuclear fuel costs include uranium (Euro 20 /lbU), enrichment, conversion and fabrication. Fuel price is assumed to
escalate at 0.5% per annum.
Annex 4: Financial Analysis
2013 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Rehabilitation of exisiting HPPs 120,5 127,8 128,6 122,6 149,6 141,0 184,3 179,4 123,7 83,6 108,4 106,1
Export of electricity 2007 6,7 7,2 9,7 7,1 64,3 68,7 208,4 180,5 40,1 15,9 4,6 12,2
Load growth to 2013 3% p.a. 162,1 145,9 155,4 141,0 110,0 102,4 109,6 112,4 111,4 123,4 148,1 178,4
Available capacity in the line 730 730 730 730 730 730 730 730 730 730 730 730
Demand for capacity 2013 6,7 7,2 9,7 -11 104 107 283 247 52 15,9 4,6 12,2
Exportable power 6,7 7,2 9,7 -11,4 104,0 107,3 283,0 247,5 52,4 15,9 4,6 12,2
2014 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Oni Cascade 81,8 74,3 85,9 146,4 202,5 182,7 183,1 186,4 126,7 104,7 89,5 86,2
Namakhvani Cascade 70,0 58,7 73,1 253,3 257,0 226,3 171,4 109,8 135,1 163,7 101,4 23,7
Mtkvari Cascade 29,1 27,2 33,9 138,2 188,7 112,9 58,1 29,8 23,3 27,0 29,3 29,5
Rehabilitation of exisiting HPPs 120,5 127,8 128,6 122,6 149,6 141,0 184,3 179,4 123,7 83,6 108,4 106,1
Export of electricity 2007 6,7 7,2 9,7 7,1 64,3 68,7 208,4 180,5 40,1 15,9 4,6 12,2
Load growth to 2014 3% p.a. 192,0 172,8 184,1 167,0 130,3 121,3 129,8 133,2 131,9 146,2 175,5 211,3
Available capacity in the line 730 730 730 730 730 730 730 730 730 730 730 730
Demand for capacity 2014 6,7 7,2 9,7 501 732 610 675 553 317 15,9 4,6 12,2
Exportable power 6,7 7,2 9,7 500,6 730,0 610,3 675,3 552,7 317,0 15,9 4,6 12,2
2015 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Oni Cascade 81,8 74,3 85,9 146,4 202,5 182,7 183,1 186,4 126,7 104,7 89,5 86,2
Namakhvani Cascade 70,0 58,7 73,1 253,3 257,0 226,3 171,4 109,8 135,1 163,7 101,4 23,7
Mtkvari Cascade 29,1 27,2 33,9 138,2 188,7 112,9 58,1 29,8 23,3 27,0 29,3 29,5
Upper Rioni Cascade 85,2 71,4 88,9 308,3 312,8 275,3 208,5 133,7 164,4 199,2 123,4 28,8
Rehabilitation of exisiting HPPs 120,5 127,8 128,6 122,6 149,6 141,0 184,3 179,4 123,7 83,6 108,4 106,1
Export of electricity 2007 6,7 7,2 9,7 7,1 64,3 68,7 208,4 180,5 40,1 15,9 4,6 12,2
Load growth to 2015 3% p.a. 222,9 200,6 213,7 193,9 151,2 140,7 150,6 154,6 153,1 169,7 203,6 245,2
Available capacity in the line 730 730 730 730 730 730 730 730 730 730 730 730
Demand for capacity 2015 6,7 7,2 9,7 782 1024 866 863 665 460 15,9 4,6 12,2
Exportable power 6,7 7,2 9,7 730,0 730,0 730,0 730,0 665,0 460,2 15,9 4,6 12,2
2016 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Oni Cascade 81,8 74,3 85,9 146,4 202,5 182,7 183,1 186,4 126,7 104,7 89,5 86,2
Namakhvani Cascade 70,0 58,7 73,1 253,3 257,0 226,3 171,4 109,8 135,1 163,7 101,4 23,7
Mtkvari Cascade 29,1 27,2 33,9 138,2 188,7 112,9 58,1 29,8 23,3 27,0 29,3 29,5
Upper Rioni Cascade 85,2 71,4 88,9 308,3 312,8 275,3 208,5 133,7 164,4 199,2 123,4 28,8
Rehabilitation of exisiting HPPs 120,5 127,8 128,6 122,6 149,6 141,0 184,3 179,4 123,7 83,6 108,4 106,1
Export of electricity 2007 6,7 7,2 9,7 7,1 64,3 68,7 208,4 180,5 40,1 15,9 4,6 12,2
Load growth to 2016 3% p.a. 255 229 244 221 173 161 172 177 175 194 233 280
Available capacity in the line 730 730 730 730 730 730 730 730 730 730 730 730
Demand for capacity 2016 6,7 7,2 9,7 754 1002 846 842 643 438 15,9 4,6 12,2
Exportable power 6,7 7,2 9,7 730,0 730,0 730,0 730,0 643,0 438,4 15,9 4,6 12,2
Annex 5
Project Schedule
ID Task Name Duration Start Finish Predecessors
1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half
ID Task Name Duration Start Finish Predecessors1st Half Qtr 2 Qtr
2nd3HalfQtr 4 Qtr
1st 1HalfQtr 2 Qtr
2nd3HalfQtr 4 Qtr
1st 1HalfQtr 2 Qtr
2nd3HalfQtr 4
1 Black Sea Regional Transmission Project 1055 days Mon 01/09/08 Fri 14/09/12 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4
1 Black Sea Regional Transmission Project 1055 days Mon 01/09/08 Fri 14/09/12
2 Loan Approval 210 days Mon 01/09/08 Fri 19/06/09
2 Loan Approval 210 days Mon 01/09/08 Fri 19/06/09
3 Deliver Project Design Report 0 days Mon 01/09/08 Mon 01/09/08 01/09
3 Deliver Project Design Report 0 days Mon 01/09/08 Mon 01/09/08 01/09
4 Appraisal Mission 1 wk Mon 15/09/08 Fri 19/09/08 3FS+2 w ks
4 Appraisal Mission 1 wk Mon 15/09/08 Fri 19/09/08 3FS+2 w ks
5 Agreement on Financing 0 days Fri 17/10/08 Fri 17/10/08 4FS+1 mon 17/10
5 Agreement on Financing 0 days Fri 17/10/08 Fri 17/10/08 4FS+1 mon 17/10
6 Loan Approval 0 days Fri 24/04/09 Fri 24/04/09 5,13FF 24/04
6 Loan Approval 0 days Fri 24/04/09 Fri 24/04/09 5,13FF 24/04
7 Loan Effective 0 days Fri 19/06/09 Fri 19/06/09 6FS+2 mons 19/06
7 Loan Effective 0 days Fri 19/06/09 Fri 19/06/09 6FS+2 mons 19/06
8 EIA 170 days Mon 01/09/08 Fri 24/04/09
8 EIA 170 days Mon 01/09/08 Fri 24/04/09
9 Prepare ToR 0 w ks Mon 01/09/08 Mon 01/09/08 01/09
9 Prepare ToR 0 w ks Mon 01/09/08 Mon 01/09/08 01/09
10 Tender EIA Consultant 6 w ks Mon 01/09/08 Fri 10/10/08 9
10 Tender EIA Consultant 6 w ks Mon 01/09/08 Fri 10/10/08 9
11 Appoint EIA Consultant 0 days Fri 24/10/08 Fri 24/10/08 10FS+2 w ks 24/10
11 Appoint EIA Consultant 0 days Fri 24/10/08 Fri 24/10/08 10FS+2 w ks 24/10
12 Survey and Analysis 6 mons Mon 27/10/08 Fri 10/04/09 11
12 Survey and Analysis 6 mons Mon 27/10/08 Fri 10/04/09 11
13 EIA Report 2 w ks Mon 13/04/09 Fri 24/04/09 12
13 EIA Report 2 w ks Mon 13/04/09 Fri 24/04/09 12
14 Appoint Project Consultant 30 days Mon 01/09/08 Fri 10/10/08
14 Appoint Project Consultant 30 days Mon 01/09/08 Fri 10/10/08
15 Prepare ToR 0 days Mon 01/09/08 Mon 01/09/08 01/09
15 Prepare ToR 0 days Mon 01/09/08 Mon 01/09/08 01/09
16 Tender Consultant 4 w ks Mon 08/09/08 Fri 03/10/08 15FS+1 w k
16 Tender Consultant 4 w ks Mon 08/09/08 Fri 03/10/08 15FS+1 w k
17 Evaluate Tenders 1 wk Mon 06/10/08 Fri 10/10/08 16
17 Evaluate Tenders 1 wk Mon 06/10/08 Fri 10/10/08 16
18 Appoint Consultant 0 days Fri 10/10/08 Fri 10/10/08 17 10/10
18 Appoint Consultant 0 days Fri 10/10/08 Fri 10/10/08 17 10/10
19 Appoint Contractor(s) 170 days Mon 27/10/08 Fri 19/06/09
19 Appoint Contractor(s) 170 days Mon 27/10/08 Fri 19/06/09
20 Prepare Specifications and Tender Documents 3 mons Mon 27/10/08 Fri 16/01/09 18FS+2 w ks
20 Prepare Specifications and Tender Documents 3 mons Mon 27/10/08 Fri 16/01/09 18FS+2 w ks
21 Tenders Due 0 days Fri 10/04/09 Fri 10/04/09 20FS+3 mons 10/04
21 Tenders Due 0 days Fri 10/04/09 Fri 10/04/09 20FS+3 mons 10/04
22 Evaluate Tenders 2 mons Mon 13/04/09 Fri 05/06/09 21
22 Evaluate Tenders 2 mons Mon 13/04/09 Fri 05/06/09 21
23 Aw ard Contract(s) 0 days Fri 19/06/09 Fri 19/06/09 22,7 19/06
23 Aw ard Contract(s) 0 days Fri 19/06/09 Fri 19/06/09 22,7 19/06
24 Transmission Lines 500 days Mon 29/06/09 Fri 27/05/11
24 Transmission Lines 500 days Mon 29/06/09 Fri 27/05/11
25 Route Survey 3 mons Mon 29/06/09 Fri 18/09/09 23FS+1 w k
25 Route Survey 3 mons Mon 29/06/09 Fri 18/09/09 23FS+1 w k
26 Design and Tow er Spotting 4 mons Mon 29/06/09 Fri 16/10/09 23FS+1 w k
26 Design and Tow er Spotting 4 mons Mon 29/06/09 Fri 16/10/09 23FS+1 w k
27 Manufacture 6 mons Mon 19/10/09 Fri 02/04/10 26
27 Manufacture 6 mons Mon 19/10/09 Fri 02/04/10 26
28 Foundation Works 12 mons Mon 19/10/09 Fri 17/09/10 26
28 Foundation Works 12 mons Mon 19/10/09 Fri 17/09/10 26
29 Installation and Stringing 12 mons Mon 05/04/10 Fri 04/03/11 27
29 Installation and Stringing 12 mons Mon 05/04/10 Fri 04/03/11 27
30 Commissioning 3 mons Mon 07/03/11 Fri 27/05/11 29
30 Commissioning 3 mons Mon 07/03/11 Fri 27/05/11 29
31 Substations 680 days Mon 29/06/09 Fri 03/02/12
31 Substations 680 days Mon 29/06/09 Fri 03/02/12
32 Design 4 mons Mon 29/06/09 Fri 16/10/09 23FS+1 w k
32 Design 4 mons Mon 29/06/09 Fri 16/10/09 23FS+1 w k
33 Manufacture 18 mons Mon 19/10/09 Fri 04/03/11 32
33 Manufacture 18 mons Mon 19/10/09 Fri 04/03/11 32
34 Delivery 12 mons Mon 20/09/10 Fri 19/08/11 33SS+12 mons
34 Delivery 12 mons Mon 20/09/10 Fri 19/08/11 33SS+12 mons
35 Erection 13 mons Mon 18/10/10 Fri 14/10/11 34SS+1 mon
35 Erection 13 mons Mon 18/10/10 Fri 14/10/11 34SS+1 mon
36 Commissioning 4 mons Mon 17/10/11 Fri 03/02/12 35
36 Commissioning 4 mons Mon 17/10/11 Fri 03/02/12 35
37 Converter Station 840 days Mon 29/06/09 Fri 14/09/12
37 Converter Station 840 days Mon 29/06/09 Fri 14/09/12
38 Design 6 mons Mon 29/06/09 Fri 11/12/09 23FS+1 w k
38 Design 6 mons Mon 29/06/09 Fri 11/12/09 23FS+1 w k
39 Manufacture 18 mons Mon 14/12/09 Fri 29/04/11 38
39 Manufacture 18 mons Mon 14/12/09 Fri 29/04/11 38
40 Erection 12 mons Mon 02/05/11 Fri 30/03/12 39
40 Erection 12 mons Mon 02/05/11 Fri 30/03/12 39
41 Commissioning 3 mons Mon 02/04/12 Fri 22/06/12 40
41 Commissioning 3 mons Mon 02/04/12 Fri 22/06/12 40
42 Trial Period 3 mons Mon 25/06/12 Fri 14/09/12 41
42 Trial Period 3 mons Mon 25/06/12 Fri 14/09/12 41
43 In Service Date 0 days Fri 14/09/12 Fri 14/09/12 42
43 In Service Date 0 days Fri 14/09/12 Fri 14/09/12 42
Annex 7
System Losses