Energising development

General Electric is betting on further development of Romania’s co generation plants, says Cristian Colteanu, president and CEO of GE for Romania, Bulgaria and the Republic of Moldova Interview by Ana Maria Nitoi

May 2010 - From the Print Edition

US giant General Electric (GE) is betting on the development of Romania’s cogeneration plants, following an EU ruling encouraging the simultaneous production of heat and electricity.
At the end of last year European Commission allowed Romania to grant four billion Euro in state aid between 2010 and 2013 to companies interested in developing cogeneration projects.
For industrial consumers, this can be the best solution for reducing energy bills, according to Cristian Colteanu, president and CEO of GE for Romania, Bulgaria and the Republic of Moldova.
This could also benefit households. Currently Romanian homes are mostly heated by wasteful Communist-era thermo power plants. These factories are typically administered by local authorities, who have few chances of investing in their rehabilitation.
At present GE Energy is providing Vest Energo, a generator of district heating for Bucharest, with the technology necessary to build a 14 MW cogeneration gas engine plant.
The project will be powered by four of GE’s Jenbacher ‘Type 6’ gas engines. GE will also install and offer a long-term service to Vest Energo.
GE Energy also closed in 2009 a deal for the 400 million Euro project developed with Greece-based Metka to construct Petrom’s new combined cycle power plant in Brazi, near Ploiesti.
Romania’s energy infrastructure needs massive funds to improve energy efficiency and reduce pollution. About 70 per cent of the power-generating capacity in Romania is now beyond its design life.
“Modernisation and rehabilitation projects should be a top priority as well as investments in new capacities,” says Colteanu. “There are also EU funds available, but joint efforts are further needed to capitalise on them.”
There is private interest in investing in the revamping of district heating plants coordinated by municipalities, but Colteanu believes the best solution is to promote public-private partnerships (PPPs).
“Poland, Hungary and Germany have already registered success stories of implementing PPPs that we should learn from,” says Colteanu. “These countries have a stable and clear legal framework regarding PPPs, based on equal rights and a risk-sharing principle, which Romania does not have.”
In addition, he says the excessive bureaucracy and the lack of secondary legislation for specific sectors - such as renewable energy - and the absence of a help desk for private investors, limit collaboration between public and private sectors.
Elsewhere in the energy field, GE in Romania offers power generation and energy delivery technologies in coal, oil, natural gas, nuclear energy, as well as with renewable resources such as water, wind, solar and alternative fuels.
In nuclear power, GE was involved in the construction of Romania’s first two nuclear reactors at Cernavoda in Constanta county, for which it supplied turbo-generator units.
Since then, GE has been engaged in maintenance and repair services for the plant and last January extended its maintenance contract with an eight-year agreement worth about 90 million Euro.
Now GE is showing interest in supplying steam turbo-generators and providing maintenance and service for the third and fourth nuclear reactors for Cernavoda, for which a tendering for a construction company is due to launch this year.
In wind energy, General Electric has positioned itself as a major equipment supplier for some of the most expensive energy projects. This includes the delivery of 240 2.5 MW wind turbines for one of the largest wind parks in Europe - the 1.1 billion Euro Fantanale-Cogealac park under development by Czech Republic’s CEZ in Constanta county.
GE will further target renewable energy development projects. “Unlike last year, when the Romanian energy market saw many delays in ongoing projects, especially those in wind energy, initiated by private investors who struggled to find the necessary financial resources, I expect this year many of these projects to proceed based on either Government grants or EU funding co-finance,” says Colteanu.
He believes offshore wind projects should be a key part of the Government’s plans in meeting its commitments to cut greenhouse gases, as well as ensuring the continuity of energy supply over the next decade as nuclear and coal-fired stations reach the end of their lifespan.
“The Black Sea coast offers a high potential for the development of [offshore projects] and private investors are carefully evaluating the opportunity,” says Colteanu. However local legislation has some gaps and should be reviewed to provide a clear and stable framework for those committed to develop offshore wind projects in Romania.

Seizing the public works opportunity

Romania is now the target for large amounts of cash from the European Union’s structural funds which GE believes the country should exploit to build up its infrastructure, although at the end of last year less than eight per cent of total EU funds available between 2007 and 2013 had been allocated by the Government and absorbed in the country.
“Never has our country been the beneficiary of a Marshall Plan - valued at around 20 billion Euro - money given by the European Union,” says Colteanu. “This is a historical moment. I don’t think we will ever again have such an opportunity for development and it is our duty to capitalise on it. There are still four more years left and the Government needs to play an essential role in accessing these funds, through an integrated approach and synergies and also by leveraging the expertise of the private sector.”
GE intends to play a role in maximising the capture of EU funding inflows and is interested in all infrastructure development projects. “We have often noticed there is a lack of balance between the local authorities’ expertise and the expertise of the business environment, which causes delays or creates additional difficulties in accessing the funds,” says Colteanu.
General Electric has been involved in educating local authorities and translating development priorities into eligible projects. “For us, working with municipalities is not based on doing homework properly and ‘one size fits all’, on the contrary, it requires joint efforts to create a place for the opportunity,” says the General Electric president.
A local example of cooperation in energy efficiency is more than 70 contracts between GE and municipalities for street-lighting rehabilitation, which target savings up to 30 per cent. GE has also been involved in district heating rehabilitation, waste water treatment and healthcare modernisation, which the company intends to further enhance as part of its strategy with municipalities.

Regional growth in downturn

Despite the economy’s downturn, GE Romania, Bulgaria and the Republic of Moldova has registered growth.
“This result is a big achievement, especially as it represents the third year in a row with revenue growth, since I took over the GE helm in this region,” says Colteanu, who coordinates 1,000 employees in three countries.
“We at GE think that when there is a change - and a crisis is a change - there is an opportunity. Change is part of progress. It’s also a way to assess ourselves against our own targets. If we are open and willing to learn and can act quickly with a vision for the future, we won’t only survive, but we will come out stronger. Performance in hard times is more valuable and the reward is even greater.”
For 2010, GE estimates a slight increase in revenues for Romania, Bulgaria and the Republic of Moldova.

Who is Cristian Colteanu?

A former Ambassador and secretary of state, 59 year-old Cristian Colteanu has been running General Electric’s operations in Romania, Bulgaria and the Republic of Moldova since September 2007. Prior to this he was Romania’s Ambassador for Italy, Malta and the Republic of San Marino.
Between 2000 and 2003 he was secretary of state in Romania’s Ministry of Foreign Affairs. But for 14 years before taking on this position, Colteanu worked as a business advisor and representative of Italy’s Ansaldo Group in Romania.
During the Communist period, Cristian Colteanu was employed as representative of Masinexport in the USA, working with the Commercial Department of the Romanian Embassy in New York, as general manager of the US office of the Masinexport Commercial Company in Bucharest. He was also chief-engineer for the Unirea Factory for Light Industry Components in Bucharest.
Colteanu graduated from the Polytechnic University of Bucharest. He is married and has one child.

Cutting across sectors

GE’s divisions in Romania also cut across sectors including property, finance, healthcare and aviation parts production.
Under Olympian Park brand, the group has opened a GE Real Estate large industrial logistics centre near Brasov and another two similar centres will open in Timisoara and Chiajna, near Bucharest.
GE Money, the group’s consumer finance division, is setting up a universal bank with Turkey-based Dogus Group, after last year the two obtained a license from Romania’s central bank (BNR). GE Money and Dogus Group are now shareholders in the local-based Garanti Bank.
GE Healthcare recently installed medical imaging technology Magnetic Resonance 3 Tesla in a local private medical diagnostics clinic, Signa+.
GE Aviation’s local manufacturing facility for aircraft engine parts, Unison Engine Components in Bucharest, will supply 50 per cent of the world volume of combustors for the CFM 56, CF 34-8C and CF 34-10 engines on both civil and military planes, manufactured by companies such as Bombardier and Airbus.