The two floating TECs that arrived ceremoniously last year in the bay of Vlora, to mitigate the effects of the energy crisis in Albania, have not been put into operation for a single day. The Albanian Electricity Corporation (KESH) has not yet received the production license from the Energy Regulatory Authority. KESH also lacks the amount of fuel raw material needed for the thermal asset to be put into operation. What is known for sure is the $68 million bill that KESH will pay for lease and operation, even if Tiger 1 and Tiger 3 never fire up their engines.
“We will continue during the month of January and during the month of February to put into production the two electricity producing ships that are already stationed at Triport.” – declared the Minister of Infrastructure and Energy Belinda Balluku in December 2022, while communicating the data on the energy situation in the country.
The ships named “Tiger 1” and “Tiger 3” were anchored off the coast of the Ionian Sea in September of last year, but there is still no date on their use.
The main purpose of the arrival of the two ships on the shores of the Ionian Sea was to fulfill the country’s need for energy, in the conditions of a global energy crisis. But even though it has been almost half a year since they were docked in the Triport of Vlora, the two floating power plants have not yet been put into operation, nor have they been tested as promised.
At the beginning of the year, the Albanian Electroenergy Corporation told Faktoje that it planned a testing phase for the two plants at the end of February, but verifications show that the testing of the vessels has been postponed by two months.
“On the part of the contractor, it is anticipated that the test-commission phase will be completed in May 2023.” – says KESH in an official response to Faktoje, but without giving any reason for the non-implementation of the test phase for the ships “Tiger 1” and “Tiger 3”.
No production license from ERE yet for the ships
The lack of a license for energy production from the Regulatory Body is one of the main problems that KESH must solve before starting the engines of the two ships. Last December, the board of the Energy Regulatory Entity started the vessel licensing procedure, but has not yet finalized it.
At the meeting of February 24, the board of ERE decided to postpone by 30 days the deadline for licensing the activity of electricity production from TEC, in the Bay of Vlora. At least until the end of March, the two ships anchored in the Triport of Vlora will not be able to be put into operation.
KESH has not yet secured the oil for the ships to operate
But delays in obtaining a production license are not the only obstacles to the commissioning of the two floating power generation vessels. KESH has not yet managed to provide the raw material needed for the temporary thermal asset to start production.
At the beginning of March 2023, the Albanian Elektroenergetike Corporation opened the procedure for expressions of interest for the supply of fuel for the production of electricity from the two ships.
“The temporary thermal generating plant consists of two floating generation plants with a total installed capacity of 110 MW and uses HFO fuel as the main fuel for power generation. The minimum quantity to be delivered under the contract will be 100,000 (one hundred thousand) tons of VLSFO per year with a multiple delivery of a maximum of 25,000 thousand tons of VLSFO, within intervals of 60-90 days.” says KESH in its announcement, specifying that the deadline for submitting the expression of interest is March 16th.
KESH clarifies that the selection of the hydrocarbon company that will supply the ships with the required oil will be based on a competitive proposal process based on the Albanian Public Procurement Law. The open procedure for expression of interest, on the other hand, aims to study and evaluate the market through interested parties.
“All final specifications on the product, quantities, price – formation and other specifications will be presented in the tender process that will be published after this call for Expression of Interest”, KESH estimates.
“We already have two generating units that are ready for production, but since the cascade is in optimal parameters today, it is not the moment to turn them on. But of course they will start to be used as soon as we need them.” – said Balluku as she took stock of the past year and this year’s objectives, justifying the non-commissioning of two floating energy production plants at the beginning of 2023.
Based on the data that we listed above, this statement also turns out to be untrue. The testing phase as well as putting them into full operation requires first the licensing from ERE and then the raw fuel from KESH.
“Apparently, the day these ships will be put into operation will be far away. But even if they will be put into full operation, the cost of producing energy through them is much higher than the price of energy at this moment in the stock market. So, the financial cost is cheaper if the energy is bought on the stock exchange than if it is produced by these two plants. And in the meantime, whether or not these ships produce anything, their daily cost is about $95,000 per day, for two years.” – says for Faktoje Azmer Dulevič, an energy expert.
The Albanian Electricity Corporation will pay 68 million dollars, even if the two ships named “Tiger 1” and “Tiger 3” will not be put into operation for a single day. This is the bill for rent and operation. 45 million dollars will be received by the American company Excelerate Energy for the two-year lease and 22.5 million dollars by Renco firm for providing the operation service.