TALLINN, 14 NOVEMBER – Despite repair costs and additional investments in excess of €50 million, the Auvere Power Plant has been in standstill for a year and half due to exceptional circumstances during the five years and five months following its completion. The review by the National Audit Office found that it is not yet clear when the plant will reach its designed reliability, but Enefit Power, which operates the plant, estimates that at least another €10 million in investments is needed.
According to the original plan, the Auvere Power Plant was supposed to contribute to Estonia’s energy security and security of supply. “Unfortunately, the way things have gone, it’s now also news when the plant is operating and isn’t being repaired,” said Auditor General Janar Holm. “However, if the plant is not working, it cannot generate electricity at critical moments to ensure security of supply,” the Auditor General added.
The delivery of the plant was delayed by three years compared to the original deadline, but after the construction contractor delivered it on 31 July 2018, Eesti Energia has had to spend €24 million on the maintenance of the Auvere Power Plant and €29 million on investments until the end of 2023, which is €53 million in total. Due to emergency repairs, the plant has not been able to do what it was built to do for much of the time. Irrespective of all the delays and investments, it is clear that the necessary reliability has still not been achieved. According to the contractor’s calculations, it will cost at least another €10 million to achieve the 92% reliability designed for the plant. The costs of ongoing maintenance and repairs must also be taken into account.
According to Enefit Power, in the 5 years and 5 months following the delivery of the Auvere Power Plant, it has had 97 breakdowns and 531 days of downtime due to these breakdowns, which is almost 1.5 years in total. When we add the scheduled maintenance that took 193 days during the period in question, the plant has been out of operation for 724 days. The plant was out of operation 3.7 times more than originally planned.
Although the reliability was supposed to be 92% according to the design, the plant’s actual reliability has varied between 51% and 88% over the period from 2018 to 2023. The plant’s reliability was the highest in 2020, when it was in reserve for 87 days, i.e. did not generate power for the market due to low prices. As a plant in reserve is not operating, the risk of something breaking down is considerably smaller.
The defective technical solution of the external heat exchangers is the main reason why the extensive unscheduled standstills occurred. The problem was known, but after the plant was delivered, it was under a two-year warranty period, during which the construction contractor paid for emergency repairs, and Enefit Power could not make technical modifications to the plant – the technical components would otherwise have lost their warranty. The necessary parts were fully replaced by the end of 2023.
The construction contractor paid a total of €134 million in fines to Enefit Power for the Auvere Power Plant: €106 million for the delay in delivery of the plant and €28 million for failing to achieve reliability. Using the model, Enefit Power also calculates the loss of variable profit, according to which approximately €170 million was not earned in the last five years due to unscheduled repairs, the largest part of this in 2022 when energy prices were high. The amount of the fines received from the construction contractor does not exceed the amount of variable profit lost. Basically, if the plant had worked as planned, Eesti Energia would not have received fines from the construction contractor, but would probably still have earned more.
Auvere’s contribution to electricity generation will continue to require maintenance and investment. According to the calculations made by Enefit Power, no major investments should be necessary to keep the Auvere plant operational in addition to the €10 million that it plans to invest by the end of 2025. However, the plant will always need more investments, as the boilers and turbines need major repairs and parts replaced every 5 to 10 years also during normal operation.
Priit Simson
Communication Manager of the National Audit Office
+372 640 0777
+372 5615 0280
[email protected]
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http://www.riigikontroll.ee/
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Posted:
11/14/2024 11:00 AM
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Last Update:
11/14/2024 10:22 AM
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Last Review:
11/14/2024 10:22 AM