ELCEN won three lawsuits in court against Termoenergetica, a hot water and heat supplier in Bucharest, for debts of 535 million lei. Thus, ELCEN can at any time block the accounts of “Thermoenergetika”, which may lead to the insolvency of “Stolichna Meriya” company. Thermoenergetics owes a total of almost 800 million lei to ELCEN.

Sources from ELCEN contacted by HotNews.ro said that they will try to stretch the debts so as not to block the accounts, but the financial situation of the capital city hall is not rosy at all. More precisely, the subsidy approved and provided for in the budget of the capital city hall is 1 billion lei, and the required amount is almost 2 billion, in the context of the increase of about 27% of the price per gigacalorie a few days ago, recently approved by ANRE for ELCEN.

In a letter sent by Termoenergetica to the capital’s mayor’s office and general councils, the company draws attention to the fact that enforcement and entering bankruptcy will lead to problems with Bucharest’s heating supply in the middle of winter. Heat energy also needs intervention at the state level.

• “We want to draw attention to the extremely critical situation in which Compania Termoenergetica is in, there is a risk that in the next period enforcement proceedings will be initiated against the company and, as a result, it will enter a state of insolvency, jeopardizing the work of the public heating service of the Municipality of Bucharest in the middle of the cold season.
• We want to draw attention to the need for intervention at the governmental level in the context where PMB does not have the financial resources to support the operation of the Centralized Heating System of Bucharest in the winter season of 2022-2023, in order to avoid the negative consequences of the impossibility of providing a heating agent during this winter”, – it says a letter sent by Termoenergetica to the capital’s mayor’s office and general councilors, obtained by HotNews.ro.

More specifically, ELCEN has taken legal action to collect from Termoenergetica debts of 535 million lei related to consumption in March-May 2022 and obtained payment orders, which are executive documents.

The representatives of Termoenergetica say that they have accumulated a debt to ELCEN of about 800 million lei due to the fact that the capital city hall did not pay subsidies and losses in the network, that is, hot water leaked underground.

In a letter sent by Termoenergetica to the municipality, it is stated that these debts consist of:

• about 140 million lei of subsidy arrears for April-September 2022;
• subscribed and unpaid social capital of 36 million lei;
• network losses in the period 2020-2022 – 553 million lei (for 2020 – 128 million lei, 2021 – 240 million lei, and the rest is estimated for 2022). The energy balances for 2020 and 2021 have been approved, so the losses are recognized, but there is no decision of the General Council by which the PMB actually recognizes the payment of these losses.

In addition, Termoenergetica representatives say that the subsidy of about 1 billion lei approved for 2022 is not enough, since the need is about 1.47 billion lei, and after the increase in the price per gigacalorie recently approved by ANRE by about 27%, the need would amount to about 1.9 billion lei so that the price for the population does not increase.

• “During the meeting of the General Council of the Municipality of Bucharest on 03/07/2022, the PMB budget for 2022 was approved, where the amount of 987,882.00 thousand lei and a tariff lower than the budget level in 2021 and is significantly lower than the requirements for 2022, taking into account the new tariffs applied by the company and the price increase for thermal energy produced by operators in the ANRE regulatory zone, respectively the amount of 1,470,000 lei, including the VAT rate. (…)
• At the same time, we draw your attention to the fact that the financial condition of the company will deteriorate in the next period in the context in which, starting from 01.11.2022, NARE, by its Regulation No. 1899, 1917 and 1924 of 21.10.2022, changed the prices of the purchase of thermal energy from the suppliers: ELCEN, Cet Griviţa SRL and Vest Energo SA and will lead to a significant increase in the total price of heat energy supply.
• A direct consequence of ANRE’s decisions to increase tariffs for the purchase of thermal energy from the producer is an increase in the compensatory component that PMB must support from the budget of this institution in conditions where even the current level of subsidy is not uniform. that PMB to be able to defend it. The impact of the tariff increase as a result of ANRE decisions is the main one in the budget of PMB before the competition in the amount of 1,920,000 thousand lei, PMB is not able to financially support this level of compensation for the price difference”, the letter also states.

According to Termoenergetica’s financial forecasts, the estimated cash flow deficit at the end of December 2022 totals 1,096,000 lei.

Mayor General Nikushor Dan has been asking the government for 1 billion lei for thermal power since the beginning of the year, but has not received anything yet. The City Hall also did not receive an increase in debt to borrow from the market to solve the problem.

The retail price will not increase

Nikushor Dan also said on Friday that there will be no increase in household prices this winter.

“Regarding the price at which the company ELCEN, the main supplier of thermal energy, supplies “Termoenergetitsa”, here is the final answer of ANRE, the tariff has been increased. In the coming days, Termoenergetica will calculate how much production plus transport plus distribution costs, this amount will be between 1100 and 1150 lei per gigacalorie, and ANRE will confirm it. It is important that for the population the price is the one that was set by the General Council in the spring, i.e. 350, and it will not be increased this winter,” Nikushor Dan explained on Friday.

Losses of 37% in 2021

According to the energy balance published by the city hall, the district heating system in Bucharest had a heat loss of about 37% in 2021. This means that of the approximately 4.7 million gigacalories purchased by the Thermal Power Company in 2021, approximately 1.7 million were lost. At an average price of 300 lei/gcal, including VAT, this means a loss of about 500 million lei.

The main cause of thermal energy losses in the first circuit is the age of the pipes that make up the network (65% of them are older than 25 years), the main consequence is the large number of breakdowns that occur – 1813 repairs in the network. the first circuit in 2021) and damage to classical pipe insulation, the document says.

Other recorded reasons are network oversizing compared to current consumption, as well as lack of systematization of the network.

“Losses in the secondary networks of thermal power plants increase to the permissible level for such systems under the given operating conditions. Thermal energy losses in the secondary network increased from 11.22% to 11.98%, and the amount of heating agent released for heating and domestic hot water decreased by 12.77%. The main cause of thermal energy losses is the age of the pipes that make up the secondary network (almost 50% of them are older than 25 years), the main consequence is the large number of breakdowns that occur – 1,804 breakdowns were repaired on the secondary network. contour in 2021) and damage to the classic insulation of pipes located exclusively underground,” the message says.

To reduce energy losses, it is recommended to start a program of reconstruction of primary heat networks with their replacement with pre-insulated pipes equipped with an automatic loss detection system.

It can be estimated that rebuilding the entire transport system will be a project that will last at least 20 years and cost at least 1 billion euros. Calculations show that resizing and replacing approx. 80% of the total volume of transport pipelines is more than 20 years old, if we take into account the actual costs of the heating agent due to the reduction of the maximum hourly demand for thermal energy,” the document states.

Another 400 million euros will be needed to restore the distribution system.

In 2020, the district heating system in Bucharest had a heat loss of 36.63%. Technological losses in the primary network amounted to 28.91%, in the secondary network – 11.39%. For comparison, in 2017 the losses amounted to only 28.61%.

210 km of heating networks will be exchanged for European money

General Mayor Nikushor Dan signed contracts for the design and implementation of the modernization of 210 km of the heating network with European funds, the investment cost is about 260 million euros, of which 200 million euros are non-refundable funds. Work will begin next spring.

The works were divided into 5 lots, approximately 40 km long each, and all 5 associations that won the tender belong to Romanian builders:

• Lot 1 – Magistrala II SUD – Association SC ELSACO ELECTRONIC SRL (Manager) – SC SICOR SRL (Associate) – SC ENERGOMONTAJ SA (Associate)
• Lot 2 – Magistrala II – III Grozăvești – Association SC ELSACO ELECTRONIC SRL (Manager) – SC SICOR SRL (Associate) – SC ENERGOMONTAJ SA (Associate)
• Lot 3 – Magistrala V Grozăvești – Asociea CONSTRUCTII ERBAțU SA (Manager) – CONSIX CONSTRUCțII SRL (Associate)
• Lot 4 – Magistrala Progresu – Berceni – Asociea CONSTRUCTII ERBAțU SA (Manager) – CONSIX CONSTRUCTII SRL (Associate Partner)
• Lot 5 – Magistrale II Sud, II-III Grozăvești, V Grozăvești, Progresu – Berceni, II West, I-II-III West – SC ENERGOMONTAJ SA Association (Manager) – SC ELSACO ELECTRONIC SRL (Associate) – SICOR SRL (Associate) – IPCT INSTALAțII SRL (associate employee)

The municipality is unable to complete the project by the end of 2023, the only solution not to lose money is to implement the next budget in stages.

How many subscribers are served by the centralized heating system in Bucharest?

According to available data, Termoenergetica supplies thermal energy for 10,032 owner/tenant associations of 8,091 residential buildings, for 74 dormitories and 313 houses/houses, representing approximately 1,170,000 inhabitants. Of the total technical energy supplied by Thermoenergy, population consumption is 92.21%.

Installations of a centralized heating system in Bucharest consist of:

• 45 district power plants and one district thermal power plant;
• primary heat networks – 423.27 km of track / 851.84 km of pipeline;
• technical points – PT (646 pcs.) and thermal modules – MT (308 pcs.);
• secondary heat networks – 702.89 km route/2. 763 km of heat pipes and 49.58 km of track / 198.34 km of distribution pipes connected to CT;

Termoenergetica is the administrator of the largest heating system in Romania.

From the point of view of the age of the heating network pipes, the situation is as follows:

• of the 851.84 km of pipes in the primary hot water transport network, more than 65% are over 25 years old, 10% are between 20 and 25 years old, 11% are between 10 and 20 years old, and only about 14% are less than 10 years old.
• of the 2,763 km of pipes in the secondary network, more than 45% are over 25 years old, 14.4% are between 20 and 25 years old, 23% are between 10 and 20 years old, and about 17% are less than 10 years old.

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