Balance of power

State electricity grid company Transelectrica must upgrade its power lines for a decade when massive new energy plans come to market, especially in Romania’s energy rich Dobrogea region. General manager Adrian Baicusi talks to Ana Maria Nitoi

April 2010 - From the Print Edition

Romania’s southeastern zone of Dobrogea is set to become a powerhouse of electricity with a combination of gas, coal, nuclear and wind power plants building up the coastal region in the next five years - and Romania’s power grid company Transelectrica must be prepared to channel the power to home and abroad.
“The southern region of the country, namely Dobrogea, is expected to generate four times more power in the next ten years than at present, and that electricity needs to be evacuated,” says Adrian Baicusi, general manager of Transelectrica.
Several new gas and coal-fired power plant projects as well as Europe’s largest onshore wind park developed by big power companies are estimated to have an installed power capacity of about 4,000 MW in this region and its surroundings.
In Constanta county, two nuclear reactors with an installed power capacity of about 1,500 MW are planned to be built by 2015 in the country’s existing power station Cernavoda, by project company EnergoNuclear, formed from Romania’s nuclear power company Nuclearelectrica (51 per cent), with minority stakes from France’s GDF Suez, Italy’s Enel, Spain’s Iberdrola, India’s ArcelorMittal, Czech Republic’s CEZ and Germany’s RWE.

Turkish connection

To channel part of this new power abroad, the most interesting investment project for Transelectrica is the long-planned installation of an undersea electrical cable to link Romania to Turkey. This allows the country to export its excess electricity to Turkey, which has high consumption and a power deficit.
On the table for the last decade, the deal has seen delays because of the large investment required - it costs about five million Euro to install one kilometre of cable and the entire project is worth 0.5 billion Euro. Last year Vattenfall Power Consulting started to develop a feasibility study on the project and the results are expected this autumn.
“Several private companies have expressed their interest to participate in the installation of this cable,” says Baicusi, “and the project company will most probably be designed under a public-private partnership (PPP) [between Transelectrica, Turkey’s national power grid company Teias and private firms], but we will make decisions with our Turkish partners, only after we have the results of the feasibility study.”
The company is considering a similar type of PPP arrangement to that of the construction company for Cernavoda Reactors 3 and 4 - EnergoNuclear. Transelectrica and Teias will recover their outlay by selling power transport capacity, while the private companies will see their return on investment by buying and selling electricity.
Once the project company is legally established and operational and financing is secured, the project is estimated to be completed in two-and-a-half years.

Exports down

Romania’s exports of electricity decreased in 2009 to 4.3 per cent of the domestic supply compared to 2008, when they stood at 6.85 per cent. Local producers are currently operating at a comparatively lower capacity than in 2008. The fall in consumption was felt in the entire region, especially due to the reduction in manufacture.
Among its border states, Romania has the largest number of interconnection lines with Bulgaria, but its southern neighbour can generate enough electricity for its domestic consumption and export - so needs little power from Romania. However Baicusi says studies show that Romania can become a considerable electricity exporter in the next ten years, even if domestic consumption drops and some existing power producers close down.
“Whether Romania will play a leading role in the regional power market depends on the capacity of our producers to generate electricity and on the completion of announced projects - as well as the competitive price of electricity,” he says.
The country has been aspiring for many years to become a regional electricity hub in southeast Europe by establishing in Bucharest a regional electricity trading platform. It has not yet happened, but Baicusi remains optimistic. “In just a few years we will be referring to a single synchronised electricity market in this region - a common market,” he says.
Transelectrica makes annual investments of between 100 and 125 million Euro and is now working on installing interconnection lines with all its neighbours, especially Serbia, Bulgaria and Hungary - which are part of the Union for the Coordination of Transmission of Electricity (UCTE), and also with the Republic of Moldova and Ukraine - whose national grids are not yet synchronised with the EU.
Transelectrica is also investing in creating a 400 KV lines ring inside Romania which assists the domestic transport of electricity. Now the company is working on enforcing the grid in western Romania, close to the Irongate hydro power station [Portile de Fier] near Drobeta-Turnu Severin - a region increasingly attractive for developing wind parks.
The company has another major project to create a 400 KV ring around Bucharest because the capital is Romania’s largest electricity consumer. “But we are in some delay at present because we are still waiting for Enel, this region’s power distributor, to offer to contribute to this investment plan,” says Baicusi.

Wind futures

Now most grid connection contracts for wind power projects have been signed for Dobrogea and Moldavia. About 2,227 MW in wind parks are set to be installed in the following years.
Only developers of projects larger than ten MW can ask for direct connection to the national grid, while most wind parks will be connected to the local electricity distributor.
Firms that wish to connect their wind parks to Transelectrica’s grid have to make supplementary investments in building their own substation. “In 2009 fewer wind power developers have asked for grid permission, but those projects that did are considerably larger - with capacities of more than 100 MW,” says Baicusi.

WHO IS ADRIAN BAICUSI?

The 44-year-old manager joined Transelectrica in January 2009 after heading German construction company Depenbrock Bau in Romania for less then a year.
But his most defining professional experience was earned during the five years between 2003 and 2008 as general manager of Siemens Romania, a company with business interests from transport, automation and control to IT&C, power and medical.
Previously Baicusi was employed by petrol retailer OMV - where he worked as financial director in Romania.
His other work experience includes teaching financial analysis at the Academy of Economic Studies, Bucharest and finance director with media giant Media Pro.
After obtaining an Executive MBA from Harvard Business School in 1995, he took on the position of director with Romania’s Agency for Reorganisation in the Ministry of Reforms for two years. Here he was involved in the proposed restructuring of large local companies, such as national airline Tarom. “I was an expert in central administration and the restructuring of the economy in the private sector,” he adds. Baicusi also has a specialisation in mergers and acquisitions at Western Michigan University, USA and another in public company restructuring from UK’s Adam Smith Institute.