place of investment Slovakia - City of Nová Dubnica
installed capacity (kw/mw) 2 x 7 MWth (two biomass firing boilers)
2 MWth container turnkey boiler unit
project cost (gross, in euro) EUR 3 670 000
érintett terület Municipality of Nová Dubnica
number of users of generated energy 3 500 dwelling-units
type of energy resource replaced Natural gas
start of operation First boiler: end of 2004
Second boiler: December 2005
financial sources EU Structural Funds: EUR 656 209
Bank loan: EUR 3 119 550
ownership structure Joint-stock Company (majority share is owned by private sector - Datatherm Ltd. Justsen Energiteknik A/S, minority share is owned by Nová Dubnica municipality)
investor TERMONOVA a. s. (Joint-stock company), Nová Dubnica
contractor Datatherm Ltd. (s. r. o.), Žilina
THE PROJECT

The main reason to start this project was the need to reconstruct obsolete heating systems and heat exchanger stations in towns to decrease energy intensity and to achieve higher energy efficiency of heating systems. As the prices of natural gas have been gradually increasing during the past years another principle was to fulfil the technology shift without further price rises for final consumers.

On the basis of expert analyses the management of the Datatherm Ltd. finally decided to switch the fuel base in the central heating system from natural gas to wood chips. After the replacement of the boilers the natural gas supply to the central heat source dropped very quickly (1 770 000 m3 of natural gas in 2005 and estimation for 2006 is 120 000 m3 only). 21 600 tons of wood-chips were used in 2005.

The heat supply for most of the residents of Nová Dubnica city (3 500 dwellings) is provided by Termonova district heating company which is responsible for production, distribution and sale of heat. Average annual heat production is 220 000 GJ, the overall heated surface is approx. 280 000 m2 (172 000 m2 for dwelling-houses). Duration of authorization process:

  • negotiations with the local branch of International Finance Corporation (IFC) regarding the bank guarantee and procurement of bank loan from Dexia Bank Slovakia took up to 2 years,
  • the issue of building permission took 4 months,
  • the final decree related to final building approval has been issued 1.5 year later (this final phase included test operation).

TECHNOLOGY

Previous natural gas-firing boilers with installed output of 11.2 MWth have been substituted by two wooden chip-firing boilers (from Danish company Justsen Energiteknik) with installed capacity of 2 x 7 MWth and one container turnkey unit (2 MWth), which is located outside the building with a central heat source. Two hot-water natural gas firing boilers type HBK 8 ZP with installed capacity 5.6 MWth are also part of a central heating source and will be used in case there is a need to recharge peak output associated with a sudden fall of temperature or in the case that biomass-firing boilers are out of order because of cleaning or malfunction.

In order to ensure a smooth supply and storage of fuel, a storage house has been built and a wood-chipping machine installed as well. General contractor of overall investment was DATATHERM Ltd., Žilina- the official supplier of Danish biomass boilers JUSTSEN for Czech and Slovak Republic.

The lifetime of the installed technology amounts to approx. 20 years.

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ECONOMIC ASPECTS

The TERMONOVA Joint-stock company as the official investor decided to use a bank loan for the investment. Because of the loan guarantee needed, the management started negotiations with the local branch of International Finance Corporation (IFC) - a member of World Bank Group. Subsequently, the company applied for support through a special programme of the IFC called CEEF - Commercialising Energy Efficiency Finance. They were successful and Termonova obtained the first bank guarantee in Slovakia (50% of the loan amount) by means of IFC / CEEF. The bank loan was provided by Dexia Bank Slovakia. The loan of more than three million EUR from Dexia Bank Slovakia is yet to be paid back. The estimated pay back period is 4-5 years.

The project was partially supported by the EU Structural Funds as well. The approved grant from the Operational Programme Environmental Infrastructure (Measurement 2.2. - Improvement and development of infrastructure for climate protection) has a total amount of 24 999 596,96 SKK (656 209 £, as at
August 2, 2006).

The inhabitants of Nova Dubnica have gained the benefit of fixed heat prices. The heat prices in Nová Dubnica have been increased only by 3.2% in the period 2003-2006, which is in contrast with higher heat price jumps in other municipalities of Slovakia. In 2006 the inhabitants of Nova Dubnica are paying one of the lowest heat prices in Slovakia.

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SOCIAL EFFECTS

Termonova district-heating company is a medium-sized employer within the Nová Dubnica municipality. The inhabitants of the municipality as well as local private companies supplied with the heat from district heating gained the economic benefit in the form of reduced heat prices. There were 3 new jobs directly created in Termonova company and 15-20 jobs secondary (fuel suppliers) due to this project.

The Ministry of Economy of the Slovak Republic awarded this project the prize of “Best project in energetics 2006”. Information sessions for the representatives of municipalities, other district heating companies, administrators of the estates and representatives of the association of flat owners were held in April and May 2005, with the aim of apprising them with this pilot municipal project.

All the activities of Termonova company are in line with the “Concept of Nová Dubnica city development in the field of heat energetics” that was developed by the regional branch of the Slovak Energy Agency in September 2005.

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ENVIROMENTAL EFFECTS

Wood chips that are being burned in the power plant, are mainly made from wood residue. It means that no quality timber is used for the generation of wood, only wood waste is utilised. The quality of wood fuel is rigorously monitored, mainly by verifying the moisture content. Therefore, the workstation for the weighting of fuel supplies, equipped with special devices designed to monitor the moisture of the wood chips, has been developed inside the complex. Particles with potential negative environmental impact (PM particles) are reduced by a separator installed in the system.

Biomass firing has favourable impacts on the environment, the biggest being considerable abatement of CO2. There was 11 147 tons of CO2 released from central heat source in Nová Dubnica to the atmosphere in 2005. The location of the central heat source has a great significance as well. The source is located outside of residential zones and has good diffusion conditions.

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DIFFICULTIES, PROBLEMS

No serious problems have been noted during project implementation.

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FOLLOW UP

Termonova's efforts are aimed towards energy self-sufficiency and the creation of an energy sustainable community. First of all, they plan to secure the sustainable and safe supply of fuel - in 2006 they plan to have 50-60% of wood chips from Centre Biomasa (a flexible specialised organizational unit of “Lesy SR - state-owned enterprise” for wood chip supply) and the rest should be secured by their own production. In 2007 it should be only 30% from Centre Biomasa and from 2008 on, the entire biomass supply is supposed to be secured by their own production. Another step is to procure a large-sized wood-chipping machine and start with the cultivation of energy crops. The final stage should be the implementation of the cogeneration unit based on Organic Rankin Cycle (ORC).

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FURTHER INFORMATION

TERMONOVA a. s. (Rt.)
Sady Cyrila a Metoda 21/14
018 51 Nová Dubnica
Slovakia

Tel: +421 42 44 40 809 / -810
Fax: +421 42 44 32 221
E-mail: termonova@termonova.sk
Web: www.termonova.sk

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Examples to Follow - Successful and Sustainable Energy Investments in the Central-Eastern and South-Eastern European Region - Energia Klub
2008