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The emerging promise of southeast Europe

Europe's third wave of countries to enter big time wind development is expected to come from the east. Thousands of megawatts are planned for the Balkans, a region now referred to as Southeast Europe. Two countries in particular are set to emerge as the trail blazers

While the combined wind power capacity operating in Southeast Europe is no more than about 50 MW, project construction in the region is slated to take off big time over the next few years. While Bulgaria leads the pack at present, with 32 MW installed by the end of 2006, it is Croatia that is set to become the region's leading light in the near term, with Romania competing for that accolade on a more distant horizon.

Croatia is reporting 1500 MW of wind projects at an advanced stage of preparation and several thousand megawatts more under consideration, compared with Bulgaria's project pipeline of around 360 MW either building or approved. The figure being banded about for Romania is EUR 1 billion worth of wind projects at various stages of development. Meanwhile, at least 160 MW is planned for Bosnia-Herzegovina and 150 MW in Albania, while in Serbia, some pilot projects could get off the ground in the foreseeable future.

Croatia's leadership claim was given a boost with the installation of Southeast Europe's largest wind plant last year, the 11.2 MW Trtar-Krtolin wind farm near Sibenik, developed by EnerSys Hrvatska, the Croatian subsidiary of German company EnerSys. The facility brought the country's cumulative capacity to 17 MW from two wind farms. Developers are now waiting for government to pass legislation to back its goal for 5.8% of national electricity to come from renewables in 2010, up from 1% today.

With a new law expected this year, several of these projects are liable to get underway within the next 12 months, with Croatia's energy institute forecasting that cumulative wind capacity will reach 400 MW by 2010. The new law is widely expected to set a minimum percentage obligation on utilities to source electricity from renewable energy sources and implement a pricing system of fixed-rate standard offer contracts.

So far, the focus of most wind development in Croatia has been on Dalmatia on the coast, especially in the Split-Dalmatia district, where 24 locations have been reserved for projects. Local developer Adria Wind plans to double its capacity on the island of Pag, adding to the seven turbines making up its 6 MW Ravne 1 project completed in 2005. It plans to finish work on Ravne 2 this year, installing another seven units. In addition, it is also planning an 80 MW wind plant at Rudine in the municipality of Slano (Dubrovnik-Neretva district), a plant at Svilaja near Vrlika in partnership with Jura Energija, and plants near Bruvno and Lotric in the municipality of Gracac and Orljak near Obrovac. Meanwhile, EnerSys Hrvatska has started construction work on its 9.9 MW Orlice project east of Sibenik and hopes to start on its EUR 35 million, 34 MW Ponikve wind farm on the Peljesec.

In the Split-Dalmatia district, a company called SEM 1986, owned by local businessman Juroslav Buljubasic, expects to complete work on a EUR 12 million, 12 MW project in the Kostanja area, while in July Kastel International is looking to start construction work on an 80 MW wind plant on Golo Brdo near Benkovac. Due for completion in 2011, Kastel's project is being built in four 20 MW phases. Similarly, Censur Zrmanja, in partnership with Austria's CE Energy Holding, is investing EUR 53 million in a 59 MW project to be built in five stages in the area between Jasenice and Krusevo. Other Croatian projects mooted for development are worth a combined total of around EUR 200 million in investment and include four plants being developed by German firm BEVAG and another by Croatia's Dalekovod.

Romania capital grants

While many developers are awaiting new legislation in Croatia before moving ahead, those targeting Romania now have a financial basis for proceeding. With just 3 MW installed by the end of 2006 -- just 1.3 MW went up last year -- the hope is for 2007 to be the year wind development in the country finally gets going.

With a target for renewable energy to supply 22% of its electricity by 2010, the government recently approved its renewable energy support plan. This provides funding to local authorities to offer capital grants covering 30% of the cost of renewable energy projects, cuts sales tax on equipment to 9.5% and exempts project operators from environmental taxes for five to ten years.

The government estimates that as much as 14,000 MW of wind capacity could be built in Romania and has identified key areas with strong wind potential, including the Black Sea coastline, Moldavia and the Dobrogea plateau. More realistically, the Romanian Wind Energy Association suggests cumulative wind capacity will hit 300 MW by 2010 and 1700 MW by 2020. The EUR 1 billion of investment plans under consideration include one offshore development.

One of the most ambitious projects has been put forward by Italian company Energia & Servizi. It is considering investing EUR 800 million in a regional development plan that would see wind farms built in nine villages in Botosani County in north-eastern Romania. Spanish firm Detea Group has allocated EUR 100 million to build three Romanian wind projects, although its locations are yet to be decided.

On a smaller scale, a group of Romanian businessmen is planning a 10 MW plant in Clisura Dunarii in the municipality of Caras Severin. Meanwhile, Swiss-Romanian consortium EOS is working on an offshore wind farm at the Black Sea Constanta Port enclosure. Although the final size of the project is still to be decided, it is slated to use wind turbines supplied by GE Energy.

Bulgaria

First experience with wind power in Bulgaria has been gained in the past year or so with a rash of installations of single turbines. Many of the models have not been on the market for years, suggesting they are second hand machines removed from sites in northern Europe and now being given a new lease of life. Government programs in for replacement of old turbines with new have encouraged a thriving business in trade of second hand machines in countries like Denmark, the Netherlands and more recently Germany.

In 2006, Bulgaria saw 22 MW of wind capacity added, mainly in the north-east of the country. The turbine models turning up in Bulgaria read like a wind industry history book: Nordtank, Bonus, Micon, Turbowinds, and Nedwind, with some old Enercon machines among them and a healthy sprinkling of early Vestas' models, says Velizar Kiriakov of the country's Association of Producers of Ecological Energy (APEE). The rated capacities of the individual turbines range from 200 kW to 600 kW, with a small handful of exceptions. Installed capacity in the north now amounts to 20.79 MW and 11.3 MW in the south.

Bigger plans are now in the works and several foreign investors have teamed up with local firms to pursue projects. The Bulgarian government wants renewables to account for 12% of its power supply by 2012, up from 6% now. Of the 1445 MW of renewables plant envisaged to meet this goal, wind is forecast to account for just over 40%, equivalent to around 600 MW. With projects planned or currently under construction, Bulgaria should achieve half of its wind target within the next few years, assuming it can expand its small grid network in time. APEE expects installed capacity to reach at least 150-200 MW by 2010, 550-600 MW by 2015, and 750-800 MW by 2020.

American money

The biggest project in Bulgaria on which site work has begun is the 120 MW Kavarna wind farm being developed by Bulgarian-German company Geo Power. The project is owned by large American power company AES, which already has a formidable global footprint in traditional energy markets. It should be operational by mid 2008. Kavarna is a prime example for AES of wind development following in the footsteps of its traditional fossil fuel business. The company recently broke ground in Bulgaria on a $1.4 billion, 670 MW lignite-fired thermal plant.

Other projects under construction in Bulgaria are Ecosource Energy's 101.2 MW Murgash wind farm on the Stara Planina ridge in Central Bulgaria, which will see 44, 2.3 MW turbines installed over the next two years; the 60 MW Suvorovo project being developed by Eolica Bulgaria, a joint venture between Spain's Eólica Navarra and Bulgaria's Industrial Capital Holding, which should become operational this year; and the 33 MW Kaliakra wind farm, also due for completion this year, which is being developed by a joint venture comprising France's Societe Industrielle de l'Atlantique and Japan's Mitsubishi Heavy Industries. Meanwhile, German-Bulgarian firm Universum Energy has got approval to build a 64 MW wind farm at Cape Kaliakra near Kavarna.

Premium prices

Driving all the activity is a regulation requiring national power company NEK to buy electricity generated by renewables plant at preferential rates. Last year the price for wind power was raised 46% by Bulgaria's energy regulator, from BGN 0.12/kWh (EUR 0.061/kWh) to BGN 0.175/kWh (EUR 0.089/kWh) for wind farms that operate 2,250 hours a year and BGN 0.156/kWh (EUR 0.079/kWh) for wind farms that operate below that threshold. Moreover, an amendment to the energy act currently before parliament hopes to force NEK into 12 year power purchase agreements rather than the current 8-10 year contract term it must currently offer. An additional incentive for projects worth more than EUR 36 million is that they can receive "first class investor" status, entitling them to ownership deeds for land free of charge and state financing for construction of some infrastructure.

Bosnia-Herzegovina

Over the past year, several feasibility studies on the potential for wind development have been conducted in both the Serb Republic and the Muslim-Croat Federation, the two regions which make up post-war Bosnia-Herzegovina. Sites at Livno, Duvno, Mesihovina and Velika Vlajna in the Serb Republic have been identified as ideal locations for wind plant. According to a study by Spanish International Management Group on behalf of Bosnian power company Elektroprivreda HZ Herceg Bosne, several projects costing a combined total of EUR 128 million could be built in these areas by 2012, together producing 800 million kilowatt-hours a year.

The regional Bosnian authority is expected to start issuing the first concessions for wind power development sometime this year -- eight requests to build a combined capacity of 100 MW have already been submitted, including one from state power company Elektroprivreda Republike Srpske. In the Muslim-Croat Federation, Austria's Windkraft Simonsfeld is the only company to have submitted a request for a concession so far. It hopes to get approval for a EUR 65 million, 60 MW wind farm comprising 30 turbines.

Albania and Serbia

Italian firms seem to be staking the first claim to Albania. Italgest is investing EUR 180 million in a 150 MW wind farm south of Durazzo. Due to become operational in 2009, it will use 75, 2 MW turbines. Some of the power generated will be exported to Italy (Windpower Monthly, February 2007). Meanwhile, fellow Italian Veneto Distribuzione has teamed up with Albanian state energy company KESH to develop a range of renewable energy projects, including wind, although its plans are still in their infancy.

Meanwhile, Austrian firms are looking at Serbia. RE Energy, a Serbian-Austrian partnership, is installing 1 MW of wind this year at Beska, although the project is planned to eventually increase in size to 25 MW. Similarly, Austria's MTC is planning to install a wind turbine in Indjija, while Windrise is considering building a 20 turbine wind farm in Irig. Few other Serbian projects are in the pipeline. While the country's energy law grants privileged status to wind plant under 10 MW, potential investors need 26 different permits before projects can proceed. Moreover, while state power company Elektroprivreda Srbije is obliged to take power generated by wind plant, purchase prices have yet to be set.

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