The new CHP plant project in Kaunas is gaining momentum

The group of energy companies “Lietuvos energija” and UAB “Fortum Heat Lietuva” signed a contract which finalized the partners’ obligation and the mutual business conditions of joint investment into the new waste CHP plant company in Kaunas. In the nearest future, if the approval of activity concentration is obtained from the European Commission, the selection of plant construction contractors will begin – the procurement procedures are expected to begin by the end of the year.

 

The contract and the annexes signed by the shareholders define the partners’ obligations, dispute resolution methods and other agreements that will ensure a smooth and prompt implementation of the project. The state-controlled “Lietuvos energija” will own 51 per cent of shares of the joint company UAB “Kauno kogeneracinė jėgainė” – this will ensure the control of the state in the project, as stipulated in the Government resolution. “Fortum Heat Lietuva” will control 49 per cent of the plant shares, 5 per cent of which may be transferred to Kaunas city municipality and (or) a municipality-controlled company operating in the district heating system. The project investments will comprise approximately EUR 147 million, which are to be financed from the equity capital of the companies, the EU support, and loans.

 

“A project that is very important for Kaunas is gaining momentum – the partners undertook to build a new plant, which will allow lowering the heat price in Kaunas and solve the waste processing problems of the region; in addition, the plant will allow producing competitive electricity from local and renewable fuel. The plant will be safe and modern, it will lower the emission of greenhouse gases,” says Dalius Misiūnas, the director of “Lietuvos energija”.

 

A new high-efficiency CHP plant that uses waste as fuel will be built in Kaunas; the electric power of the plant will amount to 24 MW, while the heat generating power will comprise 70 MW. Such capacities will allow rationally using about 200 thousand tonnes of waste forming in the region and producing approximately 500 GWh of heat and approximately 170 GWh of electricity.

 

“The new plant continues the strategic investments of “Fortum” in the Baltic states: heat will be produced by effectively using local fuel. In addition, it corresponds to the national energy independence strategy of Lithuania. To implement the project in Kaunas, we will undoubtedly use the experience that we gained while constructing and operating the waste-fuelled plant in Klaipėda, which has been active since spring 2013,” said Vitalijus Žuta, the general director of UAB “Fortum Heat Lietuva”.

 

The environmentally friendly plant will lower the quantity of CO2 emitted during heat production by approximately 70 thousand tonnes per year; a significant portion of waste will no longer need to be accumulated in the landfill.

 

The Government in May 2014 recognised the new CHP plant project as a project of state importance because the new plant brings many benefits to society: it lowers the heat production price, solves waste management and environmental problems, promotes the effective use of fuel, and energy is produced from local and renewable fuel. In addition, a newly built plant will stimulate competition in the heat production sector, create additional jobs, and attract foreign investments to Lithuania.

 

“Lietuvos energija” signed a cooperation agreement with UAB “Fortum Heat Lietuva” regarding the development of the new CHP plant project in Kaunas on the 20th of May 2015 after the bid submitted by UAB “Fortum Heat Lietuva” during the open tender was recognised as the best.