INTERVIEW – Italgen Mulls Entering Bulgaria’s Renewable Energy Market

Italgen, part of cement manufacturer Italcementi, usually plans to develop installed capacities of 100 to 200 megawatts (MW), provided it decides to launch energy production from renewables in a new market, Giuseppe De Beni told SeeNews in an interview.

“The plan is to investigate in Bulgaria, as we did previously in Egypt and Morocco, so the idea is to have a combination of cement production with the best available technology meaning to reduce as much as we can the [CO2] emission and then to have some production coming from renewable energy, basically wind,” De Beni told SeeNews on the sidelines of Bulgaria 2009 - 2013 Economic Visions for European Development, a two-day conference held by the Bulgarian Economic Forum (www.biforum.org) in Sofia in late November.

“That to us is representing a good model for the medium and long term and at the same time we are balancing the issue of having some balancing of the risk, let’s say, in term of allowances produced by the cement plant compared to the CO2 credits that hopefully should be created also in Bulgaria by any initiative on renewable energy,” De Beni said.

The development of renewable energy resources in Bulgaria has gained momentum since the country joined the European Union in 2007, and is expected to boom further. Bulgaria must cover 16% of its gross domestic energy consumption with electricity generated from renewables by 2020 to meet the requirements of the bloc.

Currently Bulgaria has 330 MW of installed wind energy capacity and just 3.0 MW of solar energy capacity. Electricity generated from renewable resources, mostly water, currently cover less than 10% of Bulgaria's gross electricity consumption.

Italgen plans to decide whether to enter the Bulgarian market in the middle of next year but a final decision would depend on the country’s new energy legislation expected next autumn, De Beni said.

The company will wait to see what the content of the new bill is before deciding whether to invest in Bulgaria.

“So that could delay a little bit our decision but finally, if the law is a good one, I am sure of that, and with long-term vision […] that could be a good starting point for the investment,” De Beni said.

The key goal of the Bulgaria’s new energy strategy, which should be drafted by the end of this year or in early 2010, is to support energy efficiency and renewable projects. Under the strategy, the country will be able to save around 1.0 billion euro ($1.506 billion) a year after 2020 due to improved energy efficiency. The previous strategy, prepared in 2005, aimed to make Bulgaria regain its role as a leading energy exporter in southeast Europe, a role it had prior to the closure of four generating units of its Kozloduy nuclear power plant.

Italgen, set up in 2001, produces electricity at 14 hydro power plants and one thermal power plant in Italy, interconnected in a network of approximately 400 kilometers of corporate power lines. The company sold 485 gigawatthours (GWh) of electricity last year, up from 450 GWh a year earlier.

Italgen is now developing three wind farm projects – in Turkey, Morocco and Eqypt, with combined installed capacity of 300 MW.

In Bulgaria, Italcementi owns the Devnya Cement plant with an annual capacity of some 2.0 million tonnes a year. The group is investing 500 million levs ($380.9 million/255.6 million euro) in a new cement production line with an annual output of some three million tonnes.

Italcementi Group (www.italcementigroup.com), the world's fifth largest cement producer, operates in 22 countries worldwide. The group has 62 cement plants and over 22,000 employees. It closed 2008 with a consolidated turnover of 5.779 billion euro and a net profit of 272 million euro, down from 6,001 billion euro and 613 million euro, respectively, a year earlier.

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