EAC Makes Progress On Vassilikos Power Plant Reconstruction

The Electricity Authority of Cyprus (EAC) has the reconstruction of the Vassilikos power generation facility well under way and one unit of the five-unit station is due to be back on line in July, Stelios Stylianou, EAC General Manager told MEES in a recent interview. The Vassilikos plant, situated on the island’s south coast and its main power generation source, was destroyed last July by an accidental explosion emanating from a nearby naval base. The blast wrecked all five generation units, which had a total generation capacity of 793mw, plus administration buildings and auxiliary facilities. It killed 13 servicemen and firemen and left the EAC scrambling to restore electricity supplies throughout the Greek-Cypriot side of the island.

With demand for electricity expected to rise sharply as the island’s population turns to air conditioning for relief from the summer heat, the rush to bring generation capacity back into operation is on. EAC is providing some electricity from the older facilities at Dhekelia and Moni and it has recently renewed contracts under the instructions of the Cyprus Energy Regulatory Authority (CERA) for the rental of power generation units brought to the island last year when the emergency began. New contracts and extra capacity has been acquired as insurance against any power outage that might occur – especially in view of the fact that Cyprus will in July of this year take on the task of serving as president country of the EU.

“We’re making progress,” Mr Stylianou told MEES. “We’re busy with the repair of unit five and we hope to have it back in operation in July,” he said. Two gas turbines installed at the unit will add 150mw to the system, each turbine capable of producing 70mw. A steam turbine will add another 75mw. “By the end of July there will be nearly 220mw additional capacity and that will be the whole of unit five,” he said. Work on a turbine with a 75mw capacity in unit four has started and it, too, could be back in operation in July as well. The second turbine will come back in August and the entire unit is due to be working by October-November of this year. Unit three, a conventional oil-fired generator with 130mw capacity, should be running by the end of 2012 and by summer 2013, units one and two will be restored, meaning that that entire facility will be at its pre-explosion capacity. “We have numerous projects going on at this time. We have awarded 50 or 60 contracts and we are trying to deal directly with manufacturers rather than contractors,” Mr Stylianou said.

The Vassilikos plant currently burns heavy fuel oil. Natural gas was discovered in Cyprus’ offshore Block 12 in December and talks are under way between the government and US firm Noble Energy, operator in Block 12, to bring the gas onshore through a pipeline. 2015 is the target date set for gas delivery – in some form – at Vassilikos, which is also the selected site as the island’s energy center. Much depends on the cost of getting Block 12 gas to Vassilikos, and while that is a major concern for the island’s energy officials, MEES soundings suggest there is a consensus among them for Cyprus to rely on its own natural gas resource. According to Mr Stylianou, EAC will take measures now, during the course of repairs, to convert units one and two, which are oil-fired, to gas-fired status. “We’ve decided to do the conversion now, rather than to take them out of service again at some point in the future,” he said. “Once that is complete, then that will bring Vassilikos back as we knew it before July of last year.”

The total cost of repairing the facility will amount to €230mn – barring costs incurred outside insurance coverage. “This is a lot less than the original estimated cost of repairs that came to €600-700mn,” Mr Stylianou said. “We have managed to organize the entire project so as to minimize the costs. Ever since the explosion, we have had the constant presence of evaluators and cost estimators from insurance companies on site and there is a continuous, ongoing discussion with them. They have the full details of every contract that is awarded – what work is involved and what the cost will be.” There are specialists and workers from across the EU working on the Vassilikos repairs, he said. “They are working side-by-side with EAC. We follow their progress and we give them all the support they need – for the purpose of minimizing costs and to also gain expertise.”

The electricity supply crisis and cost of repairs has hiked electricity prices in Cyprus. The government has agreed to bear the cost of the temporary rental of power generation units, but the cost of the fuel needed to run the generators is being borne by consumers through a 6.96% tax on the electricity bill that will probably last until the end of this year. That tax will be lifted once all the generation costs have been recovered by EAC.

© Copyright MEES 2012.