long lasting power Budapest Erőmű

LonG LaSTInG PoWER

Budapest Erőmű Zrt is a modern, professionally managed and socially responsible energy company that respects the environment and constantly increases its value by enhancing the efficiency of its core activities. The company wishes to maintain its leading market position in district heating and is preparing for the future by developing new business opportunities to take full benefit of the synergies with its new owner, the Czech EP Holding energy group. Edina Beale reports.

Energy company Budapest Erőmű Zrt has been supplying the Hungarian capital for over 100 years. Today it operates three cogeneration power plants to produce electricity and heat for district heating simultaneously. While the company is the leading district heating supplier in the capital, furnishing around 60 per cent of Budapest’s heat requirements, it has also acquired a 3 per cent share of the national electricity market.

The Újpest, Kelenföldi and Kispest plants use combined cycle production technology to provide heating energy and electricity within the same facility. This technology has been upgraded to increase efficiency and provide a substantially improved, environmentally friendly method of producing heat and electricity. Today Budapest Erőmű Zrt has a combined electricity production capacity of 406 MW and heat production capacity of 1182 MW. New directions

In 2001, Budapest Erőmű Zrt became a member of the wellknown European energy operator EDF, and was later required to develop a completely new trading structure due to Hungary’s accession to the EU. In 2008 the Hungarian state abrogated PPA type contracts with all power plants, including Budapest Erőmű Zrt, but the company has managed to overcome the challenges of the new trading environment and stabilised its operations in the newly transformed market.

In 2015 one of the leading central European energy groups, the Czech EP Holding, expanded in Hungary as part of its Europe-wide acquisition run. In July 2015, daughter company EP Energy sealed a deal with the Hungarian unit of EDF to buy a majority 95.6 per cent stake in Budapest Erőmű Zrt.

The new owner showed Budapest Erőmű Zrt a new strategic direction and it now concentrates on the most important business issues, explains Mr András Vinkovits, president and CEO of Budapest Erőmű Zrt: “Our new owner, EP Holding, has a dynamic development programme and they are currently the 6th or 7th biggest energy group producing electricity in Europe. Budapest Erőmű Zrt is opened for more freedom then before, and new directions in economic and professional development have been shown to us. Our aim within Budapest Erőmű Zrt now is to maintain a reliable and profitable operation in the long term, and our development programme is designed to achieve this plan.”

up to date technologies

Operations are continuously being evaluated in order to identify new solutions to improve the efficiency of the power plants. “Our power plants are continuously being developed and modernised with new

technologies. At the Kelenföld power plant we made a significant development to improve our gas turbines in 2011 and as a result we have increased our efficiency and reduced emissions,” says Mr Vinkovits. It was a significant investment with a value of more than HUF 10 billion in Kelenföld and the project was completed in 2012. In addition, the company also examined the other plants in Kispest and Újpest to see how it could reduce the price of district heating and how it could be more competitive in the field of electricity production. “At present our power plants meet all existing environmental regulations,” confirms Mr Vinkovits. “In 2016 new emission values were put in force, and our gas turbines still meet these; however we will need to update our furnaces until 2020/22 so they will adhere to the new specifications. In the future our task is to make our power plants available for good service and provide a reliable district heating supply in Hungary.”

Strong prospects

It has been a long-term objective for Budapest Erőmű Zrt to maintain a strong position in the constantly changing district heating market and to work with the direct supplier, Főtáv, to find out how it can bring more customers in to the market in both the traditional heating season as well as in the summer. “In the district heating market we cooperate closely with Főtáv to provide better conditions for newly joined customers,” confirms Mr Vinkovits. “Luckily, there are more and more people interested in district heating and new customers in residential areas have appeared on the market lately. For our existing customers we are continuously working to improve our production efficiencies so we can reduce or maintain our prices for them. Besides Főtáv, who is our biggest partner, we have an industrial customer for which we produce steam.”

Budapest Erőmű Zrt intends to modernise its operations in the near future in order to become more competitive in electricity pro-

duction. Although its long-term fixed contract with MVM, to which it had previously sold half of its electricity, expired at the end of 2016, Budapest Erőmű Zrt now manages to sell its entire output to market traders and on the HUPX power exchange.

Mr Vinkovits is positive about the future and expects the company to continue its long lasting prosperity: “Our short term objective is to maintain our market share on the electricity market and to increase our production and our presence step by step on the district heating market. Over the long term we would like to be in a position to take advantage of newly raised opportunities for dynamic development, which would also support EPH’s plans for growth in Hungary.” n