North Macedonian utility embraces solar at expense of coal

North Macedonia’s state-owned electric company Elektrani na Severna Makedonija (ESM) is planning to expand the generation capacity of the solar project it is building at its 125 MW TPP Oslomej coal plant near Kičevo, in the west of the country.

Originally tendered in April as a 10 MW solar facility, the project may be expanded to completely replace the lignite coal plant, the European Bank for Reconstruction and Development (EBRD) has announced.

The bank, which is backing the €8.7 million project with €5.9 million, said the utility is evaluating scenarios to fully replace the old power plant. ESM is planning to expand the PV field and could eventually reach 125 MW of solar capacity through a modular approach, according to the EBRD.

“This project of 10 MW is very important to us because it’s a nice unit – the first large scale plant,” announced the utility. “It can then be cloned and multiplied to fulfill our strategy further down the line. It’s a pilot project for the future and it’s a power plant all by itself.”

The EBRD said the Oslomej coal plant is being kept active at a minimum service level and is being used mainly as a reserve in case of problems elsewhere in the system.

Coal plants too costly and slow

The utility has planned for years to prolong the life of the 39-year-old coal plant by another 30 years, even though the associated lignite coal mine in Kičevo is almost depleted. In 2015, the utility conducted a feasibility study into modernizing the plant by using imported coal with higher calorific value. The study concluded such a move would cost €145 million and require a four-year construction timeframe. “According to the estimations, the production price of electricity after the eventual modernization of TPP [thermal power plant] Oslomej is estimated to be above €61/MWh,” the ESM said in a document about the feasibility study.

Thermal power plants account for 842 MW of North Macedonia’s total power generation capacity of 1.41 GW, with hydroelectricity and wind accounting for 553.6 MW and 36.8 MW, respectively.

Solar has a minimal share in the power mix with only 18 MW of installed distributed PV at the end of last year. The government, however, tendered two projects totaling 35 MW in June. This month economy minister Kreshnik Bektashi revealed 82 investors have submitted bids for construction of the two plants.