Energy News in Southeast Europe two issues per month 2010-V/

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1 Energy News in Southeast Europe two issues per month 2010-V/ About: In this issue: Main focus of Balkan Energy NEWS is energy related news from countries of South East Europe. Countries involved are: Albania, Bulgaria, Bosnia and Herzegovina, Croatia, Greece, FYR Macedonia, Montenegro, Romania, and Serbia. Besides all regional energy related news, we are giving you in each issue one market analysis and review of the tenders announced and held in this area. You will be also able to see review of relevant power exchanges. News are published to subscribers only as an.pdf edition, two times per month Balkan Energy NEWS consulting: BalkanEnergy NEWS Consulting Consulting, intellectual and assistance services related to energy business in South Eastern Europe Why Balkan Energy NEWS consulting? - More than six years in consulting business for SEE Energy Sector - More than five years leading info provider for energy business in SEE. For more information contact us on news@balkanenergy.com Disclaimer: All rights reserved by Balkan Energy Solutions Team. No part of this publication may be reproduced, redistributed, or in any other way copied as a whole or partially without written permission of Balkan Energy Solutions Team. This includes internal distribution. Balkan Energy Solutions Team does not warranty the accuracy of the published data contained in this document, although Balkan Energy Solutions Team did great efforts to collect the data from the respectable and accurate sources. Contact: Balkan Energy News office news@balkanenergy.com Subscriptions & info: news@balkanenergy.com May (1) 2010 edition of Balkan Energy NEWS, with limited data. You can request free trial / latest issue on news@balkanenergy.com Actual data Power sector operational and market data for the period of ATC auctions for Balkan region Forecasted weather conditions for the following period Analysis: Hydro generation in Montenegro (current status and announced/ongoing projects) News headlines Bosnia and Herzegovina: TPP Gacko back in service after annual overhaul EP BiH: hybrid filter in TPP Kakanj in trial operation Dongfang Electric Corporation won turnkey contract for construction of TPP Stanari EP BiH: construction of HPP Vranduk might start in October HPP Mostarsko Blato put in trial operation Tender for unit 7 in TPP Tuzla prolonged, government changed tender terms Energy minister: ERS will not be privatized Bulgaria: PM Borisov: Serbia to acquire 5 % stake in NPP Belene 21 MW wind farm in Shabla put in service Regulator again fined CEZ for delays in billing procedure SEWRC to complete audits in electricity distributors by July 1

2 Balkan Energy NEWS, e-journal Issue No: 2010-V/1 - issue covers period Issue No: 2007-III/1 Energy regulator: possible increase in natural gas and heating tariffs from July 1 EC rejected request for prolonging the environmental deadlines for five TPPs Hydropower project Gorna Arda to be restarted in two months Government to sell its stake in electricity distributor E.ON CEZ invested 8.8 million euros in electricity grid during January-April Real States to build 80 MW solar power plant Croatia: HEP and Plinacro to enter LNG project on Krk Island INA started new exploration drillings in Syria INA posted 18 million euros loss in Q1 HEP posted 21.3 million euros of profit in 2009 HEP announced end of heating season Competition regulator cancelled sale of Crobenz Former head of HEP arrested over damaging electricity sale contract, investigation could lead to former prime minister Serbia: EPS: Tender for modernization of CHPP Novi Sad enters final stage Memorandum of understanding for environmental protection in future thermal power project in Kovin Kolubara mine produced million tons of lignite in January-April Energy minister: final contract for modernization of TPP Kostolac B to be signed in July EPS urged government to speed up tenders for TPPs Kolubara B and Nikola Tesla B3 Tenders: (Electricity, Nuclear, Oil and gas, Wind) Greece PPC union strikes again Qatar to invest 5 billion EUR in Greece Macedonia ELEM to modernize 3 units in TPP Bitola Possibility for TPP Oslomej to become gas fired TPP KOSEP, Samsung and Inval to construct wind farms Montenegro: French Sechilienne Sidec only bidder in tender for Maoce coalmine Romania: Romgaz demands 5 % increase in natural gas storage tariffs Unit 1 in NPP Cernavoda undergoes annual maintenance EC Craiova to invest 115 million euros for environmental projects until 2012 EBRD and EC Turceni postponed negotiations on 150 million euros loan OMV Petrom posts 196 million euros of profit in Q1 Economy minister: potential construction of 400 MW power plant in Galati Romania, Georgia and Azerbaijan established joint natural gas company Transelectrica posted million euros profit in Q1 Transgaz posted 30 % increase in profit in Q1 2

3 Balkan Energy NEWS publication Energy news for SEE countries Power market data per country (consumption/generation/export) Electricity exchange trading data (HUPX, OPCOM, EEX, BSP) Market analysis Auctions for allocation of Available Transmission Capacities (ATC) Energy tenders NEWS: Our articles cover everything what can be important for producers, consumers traders and investors: ongoing projects for electricity generation, announced projects for electricity generation, changes in legislation, privatizations, hot topics, announcements for tenders, tender results, renewable energy, investments in transmission and distribution grid, electricity generation, consumption, export info, actualities related to natural gas and oil sectors, in fields of production and exploration of hydrocarbons and pipeline projects. DATA: Our publication gives you overview of all important data on electricity generation, consumption, export, for both hourly and daily values, which is also delivered to subscribers in excel file (including tables and graphs). Electricity trading data, for day ahead and futures on important European power exchanges (HUPX, OPCOM, EEX, BSP) is also published, with annual comparisons and differences. Monthly auctions for allocation of Available Transmission Capacity (ATC) for relevant borders are also included. ANALYSES: What makes us different from other news providers? Beside all important energy related news, in each edition we are publishing one market analysis, on various topics. List of already published editions (with analyses) can be found on our website (issues from 2006, 2007 and 2008 are free for download, as well as sample issues from recent years). TRADITION: Since 2005, we have published 210 editions of Balkan Energy NEWS publication. Balkan Energy NEWS service exists for over 10 years, and during that period, we earned trust of major European utilities, generators, energy traders and investment banks Annual company subscription EUR Two editions each month - 24 editions per subscription!

4 Country Reports on Energy Business For our We are more than a news service campaign, we prepared several Country Reports on Energy Business in South Eastern Europe. At the moment we have available up-to-date country reports for Bulgaria, Romania, Slovenia, Croatia, Bosnia and Herzegovina, Montenegro, Serbia and FYR Macedonia. For each country, our reports give description and data on: Overview of the electricity market, Consumption, production and export characteristics Actualities hot topics Key market players, Legislation and electricity market opening Electricity prices and tariffs, Potentials for investments in power generation, Privatizations in power industry Current state of RES sector 40% discount on April 2014 update of Country Reports (290 EUR instead of 490 EUR) Price of individual reports is 290 EUR per country, and they are updated every three months. For each ordered report, you will receive updates during one year period, free of charge. For ordering all of the reports together, additional discount can be applied. Subscribers of Balkan Energy NEWS publication are entitled to additional discounts on Country Reports orders. Country Report on Energy Business in Bosnia and Herzegovina 67 pages Country Report on Energy Business in Bulgaria 72 pages Country Report on Energy Business in Croatia 61 pages Country Report on Energy Business in Macedonia 51 pages Country Report on Energy Business in Montenegro 59 pages Country Report on Energy Business in Romania 72 pages Country Report on Energy Business in Serbia 80 pages (free to download) Country Report on Energy Business in Slovenia 42 pages If you wish to order Country Reports on Energy Business or have any questions, contact us on: news@balkanenergy.com Tel:

5 Balkan Energy NEWS, e-journal Issue No: 2010-V/1 - issue covers period Issue No: 2007-III/1 Power exchanges data: Bosnia and Herzegovina: Electricity production in last 15 days (MWh) Average: Bosnia and Herzegovina: Electricity consumption in last 15 days (MWh) Average: Bosnia and Herzegovina: Electricity expots in last 15 days (MWh) Average: Bosnia and Herzegovina: Average hourly export in last 15 days Bosnia and Herzegovina: Average consumption and production in last 15 days 800 MWh MWh Production Consumption Hour Hour 5

6 Balkan Energy NEWS, e-journal Issue No: 2010-V/1 - issue covers period Issue No: 2007-III/1 Romania: Electricity consumption in last 15 days (MWh) Average: Romania: Electricity net export in last 15 days (MWh) Average: Romania: Average hourly net export in last 15 days Romania: Average consumption in last 15 days MWh MWh Montenegro: Electricity export in last 15 days (MWh) Average:

7 Balkan Energy NEWS, e-journal Issue No: 2010-V/1 - issue covers period Issue No: 2007-III/1 Montenegro: Electricity exports in last 15 days per border (MWh) Montenegro - Albania Montenegro - BiH Montenegro - Serbia Total Montenegro: Average Hourly exports in last 15 days MWh Hour Greece: Electricity consumption in last 15 days (MWh) Average: Greece: System Marginal Prices in last 15 days Average: Greece: Electricity prices, HTSO Greece: Average hourly consumption in last 15 days EUR/MWh MWh minimal price average price maximal price Hour 7

8 Balkan Energy NEWS, e-journal Issue No: 2010-V/1 - issue covers period Issue No: 2007-III/1 Opcom, Romania: Traded energy in last 15 days (MWh) Average: Opcom, Romania: Prices in last 15 days (EUR/MWh) Average: Opcom, Romania: Prices and quantities in last 15 days (EUR/MWh) Base Price Base Quantity Day Price Day Quantity Night Price Night Quatity OPCOM, Romania - Traded energy 70 OPCOM, Romania - Prices MWh EUR/MWh minimal price average price maximal price OPCOM, Romania - Prices EUR/MWh Day Energy (06-22h) Base energy (00-24h) Night energy (22-06h) Night Day Base 8

9 Balkan Energy NEWS, e-journal Issue No: 2010-V/1 - issue covers period Issue No: 2007-III/1 Mepso, Macedonia: Production and consumption (MWh) Hydro generation Thermal generation Total production Import Total consumption in FYROM Consumption and production in last 15 days Macedonia MWh Total production Total consumption Forecasted weather conditions for the following period Date Albania Tirana Bosnia and Herzegovina Sarajevo Bulgaria Sofia Croatia Zagreb Greece Athens Macedonia Skopje Montenegro Podgorica Romania Bucharest Serbia Belgrade T: 8-18 W: NW 3 R: 3 T: 4-14 R: 20 T: 9-14 W: W 4 R: 8 T: W: W 3 R: 2 T: W: W 5 T: 8-19 R: 3 T: R: 6 T: 6-11 W: SW 7 R: 3 T: 8-13 W: NW 6 R: T: 6-17 W: NW 5 T: 3-12 W: NW 5 R; 1 T: 9-12 W: NW 5 R: 2 T: 7-21 T: W: W 3 T: 6-16 R: 1 T: W: N 5 R: 1 T: 8-18 W: W 4 R: 1 T: 7-13 W: NW 5 R: T: 7-19 T: 4-12 T: 9-15 R: 2 T: 8-14 W: W 2 R: 1 T: W: NE 3 R: 1 T: 9-19 T: W: N 4 T: 8-14 W: W 3 R: 1 T: 7-13 R: T: 9-21 W: NW 3 T: 4-12 W: NW 3 R: 3 T: W: NE 2 R: 1 T: W: N 2 R: 3 T: W: NW 2 T: 9-19 W: NW 2 R: 1 T: W: NW 3 R: 3 T: 8-17 W: NW 1 R: 1 T: W: NW 2 R: T: W: NW 2 R: 1 T: 8-15 W: NE 2 R: 4 T: W: NE 2 R: 3 T: W: N 2 R: 6 T: W: S 4 T: 9-19 W: N 1 R: 3 T: W: NE 1 R: 3 T: W: NW 1 R: 4 T: W: NW T: W: N 1 R: 10 T: W: NE 1 R: 4 T: W: NW 1 R: 2 T: W: N 2 T: W: S 3 R: 2 T: W: NW 1 R: 3 T: W: NE 1 R: 7 T: W: SW 2 T: W: NW 2 R: T: W: NW 2 R: 13 T: 9-19 W: NW 3 R: 5 T: W: NW 1 R: 4 T: W: NW 3 T: W: SW 4 R: 6 T: W: NW 1 R: 2 T: W: W 3 R: 17 T: W: W 2 R: 1 T: W: W T: W: NW 3 R: 6 T: 9-22 R: 4 T: W: NW 3 R: 10 T: W: NW 3 R: 8 T: W: W 4 R: 1 T: W: NW 3 R: 4 T: R: 6 T: W: NW 3 R: 9 T: W: W 3 R: T: R: 3 T: 8-26 T: R: 1 T: W: NE 2 R: 2 T: T: 9-26 W: NW 3 T: W: NW 3 R: 4 T: 8-25 W: NW 5 R: 4 T: May Averages Temp: Rain: 140 Rain days: - Temp: /3 Rain: 82 Rain days: 11 Temp: Rain: 73 Rain days: 14 Temp: Rain: 79 Rain days: 13 Temp: Rain: 23 Rain days: 6 Temp: Rain: 60 Rain days: 11 Temp: Rain: 89 Rain days: 9 Temp: Rain: 70 Rain days: 6 Temp: Rain: 71 Rain days: 14 T: Temperature in celsius degrees W: Wind speed in km/h, S South, W West, N North, E East and variables; - - no wind; L-V - Light and variable R: Rain in mm S: Snow in mm 9

10 Tables with result of Allocated Aailable Transfer Capacities (AATC) in Balkan region for May 2010 NOS BIH - Bosnia & Herzegovina June Border+Direction TTC TRM NTC AAC ATC Validity period: IMPORT Croatia > BIH Montenegro > BIH Serbia > BIH EXPORT BIH > Croatia BIH > Montenegro BIH > Serbia MAVIR - Hungary June Border+Direction TTC TRM NTC AAC ATC Validity period: Romania > Hungary Serbia > Hungary Hungary > Romania Hungary > Serbia IMPORT EXPORT *Romanian border - auction for 100% of ATC, held by Transelectrica MEPSO - Macedonia June Border+Direction TTC TRM NTC AAC ATC Validity period: IMPORT Serbia > Macedonia Bulgaria > Macedonia Greece > Macedonia EXPORT Macedonia > Serbia Macedonia > Bulgaria Macedonia > Greece TSO EPCG - Montenegro June Border+Direction TTC TRM NTC AAC ATC Validity period: IMPORT Albania > Montenegro BIH > Montenegro Serbia > Montenegro Montenegro > Albania EXPORT Montenegro > BIH Montenegro > Serbia Transelectrica - Romania June Border+Direction TTC TRM NTC AAC ATC Validity period: IMPORT Bulgaria > Romania Serbia > Romania Hungary > Romania Ucraine > Romania EXPORT Romania > Bulgaria Romania > Serbia Romania > Hungary Romania > Ucraine *Bulgarian border - auction for 100% of ATC, held by ESO-EAD **Hungarian border - auction for 100% of ATC, held by Transelectrica ***Ukrainian border - auction for 100% of ATC EMS - Serbia June Border+Direction TTC TRM NTC AAC ATC Validity period: IMPORT Albania > Serbia BiH > Serbia Bulgaria > Serbia Croatia > Serbia Hungary > Serbia Serbia > Montenegro Macedonia > Serbia Romania > Serbia EXPORT Serbia > Albania Serbia > BiH Serbia > Bulgaria Serbia > Croatia Serbia > Hungary Serbia > Montenegro Serbia > Macedonia Serbia > Romania * - No information available 10

11 Balkan Energy NEWS, e-journal Issue No: 2010-V/1 - issue covers period Issue No: 2007-III/1 - TTC (Total Transfer Capacity) - TRM (Transmission Reliability Margin) - NTC (Net Transfer Capacity) values in previous tables, represents commonly correlated values, given per each border and per each direction on the respective border. (Please note that some of TSOs on their web sites publish only one-half of the NTC value, i.e. their own part of NTC, and therefore NTC data can be different) - AAC (Already Allocated Capacity) value represents part of transmission capacity allocated earlier by TSO in which table this value appears. - ATC (Available Transfer Capacities) value represents amount of transmission capacity, which will be offered by the TSO in which table this value appears to the interested market participants through allocation procedure: usually by pro-rata or explicit auctions method. (Please note that some of TSOs on their web sites within their ATC value publish ATC part of the neighboring TSO, and therefore ATC data can be different Analysis: Hydro generation in Montenegro (current status and announced/ongoing projects) Hydro potential of Montenegro Montenegro has favorable conditions for hydro power utilization due to large amounts of rainfall and large vertical drops although rivers mostly have a small quantity of flow. Montenegro has GWh/year of already utilized hydro potential, what is 18% of the estimated GWh/year. Since 1982 till today, no new power plants have been made. In the mean time, total consumption since 1980 till today has increased for around 3 times, due to industrial consumption and increase of the use of electrical energy for cooling and heating. Country s electricity generation system is very much dependable of hydrological situation since Montenegro has only one Thermal Power Plant (Pljevlja). Danube water-level in cm for last 30 days (in cm) Characteristic water stages (in cm) River Possible output (MW) Possible generation GWh/year Realized GWh/year Moraca Zeta Piva Tara Lim Cehotina Ibar Rest Total Technically possible and realized potential of main rivers of Montenegro Large Hydro Power Plants Existing hydro power plants HPP Piva HPP Piva is a storage HPP, and it was introduced into the system in It is a peak HPP, with one of the highest dams in Europe. Installed capacity is 360 MVA (3x120 MVA), output 300 MW while annual production is around 750 GWh. relevant for: HPP Portile de Fier I, 1167 MW, Romania HPP Portile de Fier II, 270 MW, Romania HPP Djerdap I, 1058 MW, Serbia HPP Djerdap II, 270 MW Serbia (source: Republic Hydrometeorological Service of Serbia) In the last 30 years, HPP Piva has been operating under longterm contract between the Power utility of Montenegro (EPCG) and the Power utility of Serbia (EPS). HPP Piva produces mostly peak electrical energy and average annual production reaches 760 GWh. HPP is owned by EPCG but operated by EPS, and in return, EPS delivers 30 to 40 % of HPP s install capacity as the base load electricity to EPCG, depending on annual generation of HPP Piva. 11

12 Currently, renewal and modernization project in HPP Piva is ongoing. HPP Perucica HPP Perucica is a storage HPP, and it was introduced into system in 1960, located in the municipality Niksic. It has 307 MW (5x38 MW + 2x58.5 MVA) of installed capacity, while annual production is around 950 GWh. There is a plan to construct an eight unit in HPP Perucica, which would have 50 MW output. By this, annual electricity production would be increased by 20 GWh. Planned hydro power plants HPP Komarnica HPP Komarnica will be located upstream from the existing HPP Piva. HPP would have an output of 168 MW and annual generation of 231 GWh. Cost of the construction would reach 200 million EUR and last for seven years. According to the Energy strategy until 2025 (adopted in 2007), HPP Komarnica should be built in Norwegian Statkraft, and companies from Austria and Italy expressed their interest for this HPP. In 2009, government of Montenegro officially revived the idea of this project. There are no environmental or other obstacles for realization of this project and therefore it is very attractive for investment. Also, there is no infrastructure near the location of this future HPP. In order to avoid flooding of populated Šavnik area, location for new HPP Komarnica is chosen 45km upstream from the existing HPP Piva, at the place known as Lonci. HPP Krusevo HPP Krusevo will be a lower reservoir of the existing HPP Piva and two HPPs would operate in cascade system. HPP Krusevo on Piva River would have power output of 130 MW and annual production of 322 GWh (peak energy). The cost of the project is estimated to 150 million EUR. HPP would be built 12 km downstream of HPP Piva dam, near the delta of rivers Piva and Tara. HPP Boka (Bileca Lake Project) The Bileca Lake is located on the border between Montenegro and Bosnia and Herzegovina, i.e. Republic of Srpska entity. According to Montenegro s data,, 42 % of the water inflows in Bileca Lake comes from Montenegro rivers, while 24 % of the Lake s capacity lies in Montenegro. The Bileca Lake is 18km long and it is 3 to 4km wide, depending on the season. EPCG and Elektrporivreda Republike Srpske (ERS) argued for the long time over the usage of the Lake. Montenegro demanded 0.7 to 0.8 TWh of electrical energy from the Bileca Lake hydropower system, as compensation. At this moment, water from the Lake is being used in downstream plants by power utilities of Republic of Srpska, Croatia and Bosnia and Herzegovina. The HPP Trebinje, HPP Dubrovnik and HPP Capljina, with an overall power output of 818 MW, process the water from Bileca Lake and produce annual amount of 2.7 TWh of electrical energy. ERS was not willing to deliver that amount electricity to EPCG, and EPCG decided to use its share of the lake. Montenegro s officials believe the best option for Bileca Lake would be the construction HPP Boka. Company Energoprojekt from Belgrade won a tender for Project for utilization of potential in Bileca Lake and proposed several models. The first model implied channeling the water from the Lake and construction of HPP Boka near the city of Risno. The power output of the plant should vary depending on the volume of the water collected. The maximum power output of the future HPP should be 345 MW and average electricity production should reach 1.8 TWh. The HPP should be of an underground type. Two other options envisaged construction of 60 MW (298 GWh) and 252 MW (1.3 TWh) HPP, respectively, but government selected the first option. Cost of the construction is estimated to 250 million EUR and construction should last for five years. Norwegian Statkraft expressed interest for this project HPPs on Moraca River Project for the construction of HPPs on Moraca River is 50 year old, and it will include construction of cascade multifunctional accumulation lakes on Moraca River. The project for construction of HPPs on Moraca River is part of a national energy strategy and includes construction of HPP Andrijevo (127 MW), Raslovici (37 MW), Milunovici (37 MW), and Zlatica (37 MW), where their overall annual production would reach 750 GWh. The HPP cascade should have power output of 238 MW, and it will be located near capital Podgorica. HPP Andrijevo will have a 150-meter dam, while the length of accumulation lake will be 14.5 km. Downstream from it will be HPP Raslovici, with 59-meter dam, while accumulation lake will be 8km long. Following, HPP Milunovici will have 62-meter dam and 7.5 km long accumulation lake. Finally, HPP Zlatica will have 62.5-meter dam and 8 km long accumulation lake. According to Energy strategy until 2025, in 2013, HPP Andrijevo and HPP Zlatica should be put in service, in 2014 HPP Raslovici, while in 2015 HPP Milunovici should be built. Construction of all four HPPs would last 6 years, and it would cost more than 500 million EUR. The future strategic partner will operate HPPs under 30-year build-operate-transfer (BOT) concession agreement. The concession agreement includes exploration, design, engineering, financing, construction, management, maintenance, revitalization and transfer of HPPs. According to spatial plans, some 800 hectares of agricultural and 400 hectares of other land will be flooded. Some 57 million EUR should be paid for expropriation of the land, and some 58 million EUR should be invested for construction of 130 km of new roads. Some 170 households should be reallocated and some 250 facilities should be dismantled. The construction of HPPs will require flooding of 19-kilometer long regional motorway. The new motorway should be built in period of four years, i.e. two years before HPPs should be put in service. 12

13 According to analyses of International finance corporation (IFC), the cost of the project should reach 500 million EUR. According to official estimations (EPCG), the price of electricity produced in four cascade HPPs on Moraca River should be some 4 eurocents/kwh. According to analyses made by IFC and Poyry, original project should bring between 470 and 740 million EUR of benefits to Montenegro in period of 50 years. During the public debate in March 2010, opposition party PZP said that construction of four HPPs would be financial debacle for both concessionaire and the state, having in mind current electricity prices and construction of HPPs, considering sustainable development, cultural heritage and environmental impact, would be a total mistake. PZP is in favor of construction of HPP Krusevo, HPP Komarnica and the second unit in TPP Pljevlja. PZP argue that construction of these three power plants would be cheaper compared to HPPs on Moraca River (400 million EUR compared to 530 million EUR), while electricity production would be 2.7 times higher. Later, in April 2010, Minister of Environment and Spatial Planning said that the Ministry should reconsider the option for reducing the altitude of the HPP Andrijevo dam. According to some estimations, a lower dam would reduce the overall financial benefits of HPPs on Moraca River by 30 %. The Minister strongly denied claims that the project would harm natural environment and bring profit to foreign investors. Statkraft and EPCG had plans to establish joint venture for this project in 2007, but talks stalled. Statkraft has demanded from government of Montenegro to increase the concession period for usage of HPPs from 30 up to 99 years. Moraca River HPPs Tender In October , Ministry of Economic Development published public invitation for submitting the letter of interests in the project for construction of new large HPPs on Moraca River. The following companies expressed official interest for the project: Edison, Verbund, Statkraft, Zarubezhvodstroy (Russia), consortium UEF Hydro Wind Group (Great Britain), NTE, EVN AG, Voith Siemens Hydro Power Generation, RWE, Inter RAO UES, Stucky (Switzerland), consortium of Fortum Power and Heat Oy (Finland) and Hungarian Power Companies, Gama Enerji (Turkey), Enel, Porr, Energie Steiermark (Austria), Lanco (India), Ingra (Croatia), Aare-Tessin Ltd. for Electricity ( Switzerland), Lok Hang Group Inc (USA). Later, in February , Ministry of Economy of Montenegro published a prequalification tender for construction of HPPs on Moraca River. Potential bidder needed to provide evidence of investing 600 million EUR in several projects or evidence of investing 300 million EUR in one project. In addition, the potential bidders must have experience in construction of HPPs with power output between 150 and 500 MW, i.e. similar to those that will be built on Moraca River. In the end of April 2010, Ministry of Economy said that 5 bids were submitted for construction of HPPs on Moraca River. The bids were submitted by the consortium of A2A (Italy) and Power Utility of Montenegro (EPCG), Sihohydro Corporation (China), Enel (Italy), Strabag International Gmbh (Germany) and consortium led by Allgemeine Baugesellschaft A. Porr Aktiengesellschat (Austria). It is expected that the commission should select qualified bidders by the end of May, after which they will be invited to submit final bids and they will be allowed to purchase tender documentation. Environmental issues (Moraca River HPPs) The project for construction of 4 HPPs on Moraca River faced strong opposition from environmental and non-governmental organizations, opposition party, majority of local communities and the church. During 2007, when the project was included in Energy strategy until 2025, the representative of UN Development Program (UNDP) in Montenegro, warned that construction of HPPs on Moraca River would most likely affect natural environment of Skadar Lake and the delta of Ada Bojana. In mid February 2010, the government adopted draft spatial plans for confluence of Moraca River and draft environmental assessment of future accumulation lakes. On the other hand, local ecological organizations warned that a prequalification tender for the construction of HPPs on Moraca River was published before completion of public debate on the environmental impact of future HPPs, which was against the Concession law. During public debate in March 2010, Forum of NGOs (non-government organization) for sustainable development of Montenegro called the government to inform the public on possible risks of the project, including potential destruction of dams. NGOs claim that the future HPPs would lead to extinction of 20 endemic species. NGOs also demanded from the government to prolong public debate and prequalification procedure, and to implement the Concession law. Several NGOs said that HPPs should not be built in accordance to project documentation made 40 years ago. NGOs believe that these plans are obsolete and financially harmful. In the same time, local communities, which will be affected by construction of HPPs, expressed concerns regarding climate effect of the future HPPs. By construction of HPPs, large part of Kolasin municipality will be flooded. Citizens of Kolasin were also against the construction of HPPs on Moraca River due to possible flooding of ancient monastery of Moraca. Small Hydro Power Plants Locations of small HPPs in Montenegro are characterised by relatively low flows and high falls of water. Montenegro has a hydropower potential of approximately TWh/year in small water flows. According to Montenegro s laws, maximum output in small HPPs is 10 MW. All electricity produced in small HPPs should be purchased by EPCG at guaranteed price, which is calculated each July for the following 12 months. In July 2006, the price was set to 6.9 eurocents/kwh, and it remained unchanged. According to the Energy strategy until 2025, the overall power output in small HPPs should reach 80 MW, while the overall power production should reach 200 GWh per year or some