Anchored in the bay of Vlora for 9 months, the two power-generating ships have not turned on their generators for a single day, and they haven’t even passed the testing phase. The process, which was supposed to be completed in May, has been delayed once again. Additionally, they are currently not connected to the electricity transmission network. However, despite having “generators turned off” for 9 months, the authorities will still pay Exelerate-Renco $68 million for rent and operation, even if they don’t turn them on for a single day.
Esmeralda Topi
The Albanian Power Corporation (KESH) has still not put the two floating power plants into operation.
The vessels “Tiger 1” and “Tiger 3” anchored on the shores of Vlora in September last year, but there is still no set date for their utilization.
The main purpose of bringing the two ships to the shores of the Ionian Sea was to meet the country’s energy needs in the context of a global energy crisis.
However, despite more than nine months since their anchoring in the Triport of Vlora, the two floating power plants have not been put into operation, nor have they been tested as promised.
At the beginning of the year, KESH stated to Faktoje that they planned a testing phase for the assets at the end of February, but our verifications showed that the process was postponed to May.
“According to the contracting party, the testing-commissioning phase is expected to be completed in May 2023,” KESH stated in an official response to Faktoje.
Further verifications indicate that the deadline has been violated for the third time.
“Testing for commissioning purposes is proposed to be carried out, according to the systems, starting from the second week of June, beginning with the connection to the transmission network,” KESH stated in an official response to Faktoje, emphasizing that the company “Excelerate and Renco” is currently in the testing phase prior to commissioning.
Once again, KESH has not provided any reasons for the continuous delays in the testing-commissioning process of the thermal assets but has only given a new deadline.
Meanwhile, experts in the field say that the production from these vessels no longer makes sense.
“I don’t believe they will be put into operation for a very simple reason, because electricity prices on the exchange market have dropped, and it is naturally cheaper to buy energy during the summer on the exchange than to produce it from the ships. Because the energy on the exchange fluctuates from 60 euros to 90 euros per megawatt, and there is no interest because the production from these two power plants doubles depending on the fuel. So, I don’t think they will be put into operation soon, while it remains to be seen what will happen,” argues Azmer Duleviç, an energy expert, for Faktoje.
The testing-commissioning process is crucial as its completion paves the way for payments that KESH has to make to the Exelerate-Renco consortium. The two-year contract stipulates a payment of $63,000 per day for the rent and operation of the assets.
The contract stipulates that the Albanian Power Corporation will pay $68 million, even if the two vessels named “Tiger 1” and “Tiger 3” are not put into operation for a single day. This is the bill for rent and operation.
The American company Excelerate Energy will receive $45 million for the two-year rent, and the Renco firm will receive $22.5 million for providing the operation service.
Three months for the production license.
Although they were taken urgently at the peak of the crisis, every process related to the assets has been accompanied by delays and missed deadlines. Even the licensing process for the two vessels for energy production by the Regulatory Authority took three months.
While it was promised that the two vessels would be operational at the beginning of this year, the Energy Regulatory Authority had not granted KESH the license for this activity.
The licensing procedure, which started on December 28, 2022, was completed at the end of March of this year.
On March 27, the board of the Energy Regulatory Entity decided to grant a license to KESH for the activity of electricity production from the floating power plant installed in the Bay of Vlora for a period of 2 years, starting after the assets are operational and have passed the testing-commissioning phase.
“ERE grants a license for the activity of electricity production for up to 30 years, but since the power purchase agreement for electricity production from the thermal power plants Tigër 1 and Tigër 3 has been signed for a period of 2 (two) years, starting from the date of commissioning of the facilities, that is, when the assets become operational, ERE will be conditioned by this period in determining the validity of the license,” argues the decision of the Regulatory Entity Board.
The $100 million oil bill that will ‘ignite’ the thermal power plants.
Securing the fuel to operate the floating power plants in the Bay of Vlora is another unresolved issue, as KESH has not been able to obtain it to start production.
At the beginning of March 2023, the Albanian Power Corporation initiated the procedure for expressing interest in the supply of fuel for electricity production from the two floating power plants. Following this procedure, KESH planned for the next step to be the opening of the tender in May, a deadline that was not met.
“After determining the contractual conditions for fuel storage near the Vlora Triport, the procedure for supplying Heavy Fuel Oil (HFO) will be initiated immediately,” says KESH in an official response to Faktoje regarding the tender opening for the first fuel supply, without providing a specific deadline.
However, according to the Public Procurement Agency’s forecast registration, the procedure for “Procurement of HFO fuel for temporary thermal power generation asset” has not been cancelled.
Source: Public Procurement Agency
Documents from the Public Procurement Agency indicate that the tender’s funding limit is 10 billion and 267 million lekë, equivalent to more than 100 million dollars. However, it remains to be se
en when the procedure will be opened, as KESH states it will be done in accordance with the Albanian Public Procurement Law. The only officially open tender by KESH related to thermal assets is the one for the storage and loading-unloading of oil to be used by the installed vessels in Vlora.
Source: Public Procurement Agency
The tender, which will be conducted through a negotiated procedure without prior publication, was announced on May 19 and sets a funding limit of 1.26 billion lekë or approximately 12 million dollars. The estimated development
