Receivables that CGES has towards ECPG put at risk the liquidity of the company during the biggest investment cycle, thereby creating additional problems. Court proceedings are in progress, and CGES expects to collect these receivables and overcome the situation which our company did not provoke by any of its act, Bulatović said.
Ivan Bulatović, the Executive Director of Crnogorski elektroprenosni sistem (CGES), announced that over 40 million € will be invested in the grid in this year. “CGES planned to invest around 40 million € in the system in this year, of which 26 million € of loan funds to projects related to the interconnection with Italy, provided by favourable conditions from international banks”, Mr Bulatović said in an interview for Portal Analitika. He announced that the power exchange in Montenegro will be formed soon.
“Big activities are being conducted on the formation of the power exchange. Three energy undertakings, CGES, EPCG and COTEE, have been recognised as founders of this new company, with their openness towards all undertakings. The preparation of the founder's agreement and by-laws of the company is in progress in order to create conditions for its activation in full capacity“, Mr Bulatović stated.
ANALITIKA: Italian company Terna completed the laying down of the submarine cable. When the cable will be in function, i.e. when will flow the first kilowatts? What is the status of the project on the Montenegrin side regarding the construction of the overhead line?
BULATOVIĆ: The project of submarine interconnection with Italy is a very complex project which implies obligations of several parties. We are exchanging information and following the implementation of the project with our Italian partners, and accordingly it is expected that both the submarine cable and infrastructure constructed by the strategic partner Terna and CGES will be completed in the second half of 2018.
The fact that the part of the project implemented by CGES implies construction of the substation and overhead line, which spans across the entire territory of Montenegro along a 180 km long route, with over 650 overhead line towers and over 130 km of access roads, shows that this is a demanding project which, despite numerous challenges, is being implemented according to a satisfactory timetable.
Contractors on the field encounter usual problems for such type of projects, and they are related to inaccessible and demanding terrain in one part, as well as to the fact that on some locations works cannot be completed for several months due to unfavourable weather conditions.
In addition, the issue of ensuring real estate necessary for project implementation creates dissatisfaction with one part of the owners, where CGES is attempting to find a compromise in accordance with legal solutions and rulebooks regulating these issues.
ANALITIKA: Which are the benefits of this project?
BULATOVIĆ: In addition to the presented importance of the project to the general public, it is very important to keep in mind that by signing the Athens Memorandum and other acts, Montenegro decided to actively participate in creating conditions for the functioning of a free electricity market.
In such conditions of a unique European energy market, connecting with neighbours is imposed as a necessity. Benefits from project implementation are also the direct link with the electricity market in the EU, and increase in security of electricity supply of Montenegro and the region in extremely dry periods through opening of another border for cross-border electricity trade.
ANALITIKA: Montenegro also positions itself as an energy market of the region…
BULATOVIĆ: That is correct. Montenegro will positions itself as an electric power node in the region, thereby creating conditions for a complete openness of the electricity market, which should result in a higher competition.
Also, as a potential opportunity, it appears the increased interest in other connection points of our system with neighbours, thereby increasing the value of these interstate overhead lines, i.e. increasing revenues from their operation for the purposes of electricity transit.
ANALITIKA: May consumers expect lower electricity transmission tariffs?
BULATOVIĆ: Certainly. In this way, in final, it shall be reduced also electricity transmission tariffs paid by domestic consumers.
I would underline also that our internal grid will reinforce, thereby ensuring a more reliable electricity supply of tourist centres, and contributing also to bigger interest in constructing new sources.
ANALITIKA: When the company of power exchange will be formed in Montenegro? What steps have you taken in this regards?
BULATOVIĆ: Big activities are being conducted on the formation of the power exchange. Three energy undertakings, CGES, EPCG and COTEE, have been recognised as founders of this new company, with their openness towards all undertakings. By following the good European practice and examples from neighbouring countries, the Ministry of Economy, with the support of the aforementioned companies, initiated a series of activities in this field. The preparation of the founder's agreement and by-laws of the company is in progress in order to create conditions for its activation in full capacity.
ANALITIKA: What is the financial situation in CGES considering the unresolved debtor-creditor relationships with EPCG worth 15 million €? What is the status of the court proceedings since there are rumours that such debts puts at risk the financial situation in CGES?
BULATOVIĆ: Receivables that CGES has towards ECPG put at risk the liquidity of the company during the biggest investment cycle, thereby creating additional problems. Court proceedings are in progress, and CGES expects to collect these receivables and overcome the situation which our company did not provoke by any of its act.
Stable functioning of the electric power system requires that all undertakings act in accordance with legal regulations and rules defined by the Energy Regulatory Agency and, according to our strong belief, it requested building partner relationships between energy companies and resolving problems to the highest possible extent outside court instances.
ANALITIKA: How many investments have you planned in this year?
BULATOVIĆ: Also this year, despite low liquidity, CGES continued with a strong investment cycle. It has been planned to invest in this year around 40 million € in the system in this year, of which 26 million € of loan funds to projects related to the interconnection with Italy, provided by favourable conditions from international banks.
Last year we signed a Financing Agreement by which CGES received a grant from European funds in the amount of 25 million € that will be invested in this and following years in our system, without any expense for Montenegrin consumers, thereby relaxing the transmission tariff.
ANALITIKA: How did you cope with the bad weather that hit Montenegro at the beginning of the year?
BULATOVIĆ:
The bad weather that hit Montenegro in January is one of the things that warns us that we are powerless in front of the strength of the nature. However, by constantly investing in our system and maintaining operational readiness of facilities, we succeeded to ensure a safe and reliable supply of all transmission network consumers.
On the other hand, eleven towers of the coastal 110 kV overhead line from Budva to Bar fell on the ground due to wind intensity, combined with additional burden of ice and snow on conductors. Still, we managed to repair the consequences of the breakdown in a relatively short period and to restore the network in ordinary operational state.
ANALITIKA: How much it is difficult to rapidly develop the transmission system compared to circumstances, and to allow access to all users that want to connect (renewable sources, highway, tourist facilities)?
BULATOVIĆ: Pursuant to provisions of the Energy Law, CGES is obliged to develop and enhance the transmission system in order to provide a non-discriminatory access to all users that want to connect to the transmission system.
CGES puts important efforts in reconstruction of the existing facilities, and also builds new ones, in order to keep up with development directions of the State of Montenegro. Here it is primarily implied development of energetics in the part of constructing new substations and overhead lines, for the needs of development of the tourist industry in accordance with the highest standards.
Ture, it is a big challenge for us to implement complicated and demanding projects within relatively short deadlines because in addition to CGES teams, which we are trying to strengthen, we expect a strong support from state administrative capacities in the part of spatial planning, public procurements, property based relations, regulatory framework etc.
However, for now, and I believe in the future also, CGES copes with all challenges, and gives its maximum in the part of its competence and within its possibilities in order to achieve goals set by the Energy Development Strategy of Montenegro and Development Action Plan.
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