Truth About Project of Construction of the Second Unit of Thermal Power Plant ''Pljevlja''

TRUTH ABOUT PROJECT OF CONSTRUCTION OF THE SECOND UNIT OF THERMAL POWER PLANT ''PLJEVLJA''

This document is produced as part of the project „Advocacy NGOs networks for sustainable use of energy and natural resources in the Western Balkans and Turkey – ETNAR“, EU funded project from the IPA civil society partnership framework programme predpristupnu pomoc (IPA) - Civil Society Facility (CSF).

Author: Nikola Ninković, BSc. of Energy Technology

CONTENT

POWER SYSTEM OF MONTENEGRO ...... Error! Bookmark not defined. CONSUMPTION AND ACTUAL NEEDS FOR ELECTRICITY ...... 6 SOURCE OF RAW MATERIALS NECESSARY FOR TPP OPERATIONS – COAL MINE ''PLJEVLJA'' ...... 7 PRICE AND CALORIE CONTENT OF COAL...... Error! Bookmark not defined. OPERATIONS OF COAL MINE PLJEVLJA ...... Error! Bookmark not defined. WORK PLACES IN THERMAL POWER PLANT ''PLJEVLJA'' ...... 10 PRICE OF ELECTRICITY ...... 10 TOPLIFICATION ...... 12 LANDFILLS ...... 13 POLLUTION ...... 14 HEALTH CONDITION OF RESIDENTS OF PLJEVLJA ...... Error! Bookmark not defined. EU STANDARDS ...... 20 CONCLUSION AND POSSIBLE ALTERNATIVES ...... 22

LIST OF IMAGES

Image 1: Thermal power plant ''Pljevlja'' ...... 5 Image 2: Coal Mine Pljevlja...... 7 Image 3: Landfill Maljevac ...... 13 Image 4: Pollution in Pljevlja ...... 16

LIST OF GRAPHICS

Graphics 1: Decline of demand for electricity of Montenegro in the period 2011-2013 ...... 6 Graphics 2: Decline of the number of employees in thermal power plant ''Pljevlja'' from 2012 – 2015...... 10 Graphics 3: Recorded number of days with exceedences of daily limited values ...... 15 Graphics 4: Amount of harmful emissions that originating from thermal power plant ''Pljevlja'' ...... 16 Graphics 5: Share of acute respiratory diseases in overall number of children in the municipality of Pljevlja...... 18

LIST OF TABLES

Table 1: Productivity of coal mine in the region and the EU ...... 9 Table 2: Production price of electricity ...... 11 Table 3: Measured emissions of polluted substances of TPP „Pljevlja” for 2010 and 2011 (monthly average values) ...... 17 Table 4: Registered diseases and cancer conditions in Outpatient Service of Health Center of Pljevlja for period of 2008 – 2012 ...... 18

POWER SYSTEM OF MONTENEGRO

On the north of Montenegro, in the town of Pljevlja, there is one and only Montenegrin condensing thermal power plant, projected with the units of 210 MW, out of which, by now, only one is constructed. Thermal power plant ''Pljevlja'' started operating in 1982, and it is in direct ownership of Power Industry of Montenegro (EPCG), while EPCG is in majority ownership of the state of Montenegro with 57,02%, and with 41,75% share of Italian company A2A and 1,23% share of others1.

Image1: Thermal Power Plant ''Pljevlja''

Given that it is prior to the expiration of its operational time, and due to further meeting the needs for electricity as well as export of “planned” surplus of electricity in the EU, the Government of Montenegro classified the construction of the second unit of TPP “Pljevlja” among priority projects by the Energy Development Strategy by 2030. Besides the construction of the second unit, exploitation of domestic coal reserves as the second important energy resource of Montenegro besides hydropower, as well as development of system of district heating system obtained from coal combustion in thermal power plant were also classified as priority.

Energy Development Strategy of Montenegro by 2030, action plans and strategic objectives are promoting exploitation of fossil fuels, i.e. domestic coal reserves (without confidential plans for using new resources such as sun, wind, biomass, nor implementation of measures of energy efficiency), although those reserves are limited by lifetime. These plans of the Government of Montenegro do not represent sustainable planning and sustainable use of natural resources as well as consequently do not represent care about current and future generations who will inherit land without resources with old and outdated power system.

1 http://www.epcg.com/o-nama/osnovna-djelatnost

CONSUMPTION AND ACTUAL NEEDS FOR ELECTRICITY

Montenegro has small power system with thermal power plant ''Pljevlja'' with power of 218 MW which burns lignite from Coal Mine Pljevlja and two hydropower plants ''Perućica'' and ''Piva''. Overall installed production capacity of plants amounts to 868 MW, out of which 685 MW belongs to hydropower plants i.e. 76% and 24%2 to thermal power plant. Overall demand for electricity of Montenegro decreased from 4,2 TWh in 2011 to 3,4 TWh in 2013.

Graphics 1: Decline of demand for electricity of Montenegro in the period 2011-2013

Decline of demand for electricity 5 4 3

2 TWh 1 0 Demand Montenegro for electricity in Demand Montenegro for electricity in 2011. 2013.

According to these figures, 1,3 TWh was produced in thermal power plant, while around 2.5 TWh was produced in hydropower plants3. On the basis of energy balance of Montenegro from 2013, one of the biggest electricity consumers was Aluminium Company Podgorica (KAP) which spent 0,7 TWh in 20134. The rest was consumed on general distribution and other industries (Steelworks Nikšić, Railways of Montenegro). In 2013, due to production decline of KAP, Montenegro did not have electricity deficit, while 2011 KAP spent 1,4 TWh, which made deficit and because of which need for electricity import was recognized. From the above mentioned reasons, it is obvious that KAP spent overall annual produced electricity from thermal power plant just in 2011, which was the reason for electricity deficit.

In order to plan power system of one country, first of all we should know its actual needs for electricity. In this sense, in Montenegro there is no adequate strategic planning, and therefore it is not possible to specify real needs for new energy capacities.

In Montenegro, there is no adequate strategic planning and therefore it is not possible to specify real needs for new energy capacities, i.e. real needs for electricity in Montenegro.

2 http://www.epcg.com/o-nama/osnovna-djelatnost 3http://www.epcg.com/sites/epcg.com/files/multimedia/main_pages/files/2013/08/ostvarena_proizvodnja_u_2013.pdf#o verlay-context=o-nama/proizvodnja-i-elektroenergetski-bilans 4 Energy balance of Montenegro for 2015

SOURCE OF RAW MATERIALS NECESSARY FOR THERMAL POWER PLANT OPERATIONS- COAL MINE ''PLJEVLJA''

Besides question whether Montenegro needs this type of electricity source such as the second unit of thermal power plant, and what are actual needs, there is lot of other questions that could dispute this project. One of first questions is operation of coal mine ''Pljevlja'', which from the very beginning delivers necessary raw material for operation of thermal power plant – coal.

Image 2: Coal Mine Pljevlja

There are five coal deposits in Pljevlja (Potrlica, Kalušići, Grevo, Komini and Rabitlje). The biggest one is Potrlica, which was founded in the town, while others are smaller. According to Draft of Detailed Spatial Plan of Thermal Power Plant Pljevlja, in basin Potrlica there is about 41 million tons of coal5, while according to the Report of Regulatory Agency for Energy from 2013, in Potrlica deposit there was about 39 million of tons of coal6, while for other deposits (Kalušići, Grevo, Komini, Rabitlje) according to Energy Development Strategy of Montenegro by 2030, it is stated: '' According to recommendation of Fichtner Study7 (2009), coal deposits Kalušići, Grevo, Komini and Rabitlje as economically unusable mines, should not be included in this time in any scenario of coal reserves on the basis of which future Energy Production Strategy will be based on''.8

According to Draft Detailed Spatial Plan of Thermal Power Plant Pljevlja, coal reserves in basin are sufficient for 40-years operation of Thermal Power Plant, i.e. second unit. The same documents states that mix of coal from different pits will be used as fuel with the aim of achieving appropriate quality of coal, while, on the other side, Fichtner Study states that these deposits are not economically cost-effective.

5 Draft of Detail Spatial Plan of Thermal Power Plant Pljevlja, page 35 6 http://regagen.co.me/wp-content/uploads/IZVJESTAJ-O-STANJU-ENERGETSKOG-SEKTORA-CG-ZA-2013.-GODINU.pdf 7 Fichtner: ”Development and participation of private sector in thermo-energetic complex of Pljevlja ”, final report, 9th September 2009 8 http://www.energetska- efikasnost.me/uploads/file/Dokumenta/Strategija%20razvoja%20energetike%20CG%20do%202030.%20godine%20- %20Bijela%20knjiga_10072014.pdf

Given that 1.600.000 tons of coal is burnt annually in thermal power plant “Pljevlja” for operation of existing unit, it is clear that mentioned reserves cannot be sufficient for operation of first unit, and later for parallel operation of both units (by 2024; coal consumption about 3.000.000 tons/annually for both units9) and at the end only for second unit. These reserves are sufficient for operation of new unit of TPP ''Pljevlja'' from 20 to 25 years and less, if existing unit stays in order. Also, it is important to mention that the level of exploration of coal reserves in Potrlica deposit is not sufficient, and that 50% of reserves is actually C1 class, meaning- insufficient explored10. Besides this deposit, it is possible to open two more deposits: Mataruge (7.500 000 tons, C1 category) and Otilovići (3.421.248 tons of coal, B and C1 categories)11, for which calculation of land expropriation or overall cost-effectiveness of these project have not been done.

There are no sufficiently explored, analyzed or actually estimated coal reserves in covered coal basins. Existing coal reserves are sufficient for operation of the second unit of TPP for 25 years or less, if existing unit stays in function. Besides Potrlica basin, most coal deposits are economically unprofitable mines.

PRICE AND CALORIE CONTENT OF COAL

One of key elements in planning the construction of thermal power plant is engine fuel or coal. The price of coal is one of the most important elements in economic calculation of project of second unit of TPP ''Pljevlja'', as well as energy contained in lignite, i.e. its calorie content. Calorie content of lignite in basin, according to the Draft Spatial Plan of Thermal Power Plant Pljevlja, amounts to 10.720 KJ/kg12, and according to other plans for second unit of TPP, it amounts to 9560 KJ/kg13. Its projected price for second unit is 2,1 €/GJ, i.e. 20,08€/t14, while other parameters show that price is way from realistic, and that coal of lower calorie content was delivered in previous years.

Prove to these claims is that for operation of first unit of TPP ''Pljevlja'' the coal of quality of 9.211 kJ/kg15 is used, with current coal price of 25,65€/t16, i.e. 2,78 €/GJ, and in accordance with that, projected price of coal for second unit of TPP should be 26,58 €/t, and not 20,08€/t as stated in document, whereby difference of 6.5 €/t is delivered, which on projected annual level of coal consumption in the second unit of TPP of 1.600.000 t/annually brings additional 10.400.000 €/annually, which is necessary to pay for coal.

9 Draft Detailed Spatial Plan of Thermal Power Plant Pljevlja 10 http://regagen.co.me/wp-content/uploads/IZVJESTAJ-O-STANJU-ENERGETSKOG-SEKTORA-CG-ZA-2013.-GODINU.pdf 11 http://regagen.co.me/wp-content/uploads/IZVJESTAJ-O-STANJU-ENERGETSKOG-SEKTORA-CG-ZA-2013.-GODINU.pdf 12 Energy Development Strategy of Montenegro by 2025 13 Strategic assessment of environmental impact of Draft Spatial Plan of Thermal Power Plant Pljevlja, page 81 14 Draft of Spatial Plan of Thermal Power Plant Pljevlja- EPCG ''Information about the project ''TPP Pljevlja ll'', page 123 15 Draft Detailed Spatial Plan of TPP Pljevlja, page 31 16 Contract about coal sale- Coal Mine and Thermal Power Plant

Besides this, calorie content of coal is bad and varies from 6-11 GJ/t17 although, according to some classifications, average calorie content of lignite is above 16 GJ/t.18

Obvious disagreement in documents of the Government of Montenegro and Power Company, in data about calorie contents and prices of coal, and these differences can mean subsidizing of Coal Mine by state and Power Company, which would mean that project of second unit of Thermal Power Plant will be even more economically unprofitable and charged to the citizens of Montenegro.

Besides, coal reserves in basin are not sufficient for supply of Thermal Power Plant not even 25 years, since it is necessary to burn large amounts of coal given that its bad calorie content, and that fuels costs will increase which will lead to higher economic losses.

OPERATIONS OF COAL MINE “PLJEVLJA”

Besides issues of quality, price, level of exploration and existing coal reserves, the issue of coal mine productivity is very important, which currently employs 997 employees19. As mentioned, production of coal is about 1.600.000 tons annually, and with regard to the number of employees, productivity of coal mine is about 1605 t/per worker, which is far below EU average, even below region average.

Table 1: Productivity of coal mines in the region and EU

Productivity Country (annually excavated tons of coal/per worker) Montenegro 1605 Bosnia and Herzegovina 2500 Serbia 3000 Czech Republic 3704 Poland 4236 Source: Research NGO GREEN HOME

Related to this, it is obvious that coal mine must increase its productivity, i.e. optimize its operation in all sectors because its work is not sustainable. At the end of 2014, coal mine had uncovered loss of 17,3 million euros, while short-term commitment amounted even to 40 million euros20.

Promises that coal mine Pljevlja will open new vacancies after construction of the second unit of TPP “Pljevlja” is deception, used only for promoting the project of construction of the second unit of TPP.

17 Draft Detailed Spatial Plan of Thermal Power Plant Pljevlja 18 http://www.coalmarketinginfo.com/coal-basics/ 19 http://www.rupv.me/index.php?IDSP=774&IDGM=59&VerIDmeni=130 20 http://www.mans.co.me/wp-content/uploads/2015/10/IzvjestajRevizora2014.pdf

WORK PLACES IN THERMAL POWER PLANT ''PLJEVLJA''

In the period from 2010 to 2012, TPP ''Pljevlja'' reduced the number of employees for 100, i.e. from 333 to 223 employees21, while currently the number of employees in TPP ''Pljevlja'', according to the statement of its CEO, Luka Jovanović, is 19522.

Graphics 2: Decline of number of employees in TPP ''Pljevlja'' for the period 2012 – 2015

Number of employees in TPP ''Pljevlja'' 400

300

200 Number of employees 100

0 2010 2012 2015

Promoters of construction of the second unit state that, besides improving the economy of Montenegro, it will contribute to the number of employees. Draft Detailed Spatial Plan of Thermal Power Plant Pljevlja states that number of new employees will reach 100. The truth is that new unit will employ 50 persons, because, if constructed, it will demand new technologies which request less employees regarding higher automatization.

Although we are talking about new vacancies, decrease of number of workers will happen since existing unit must be closed by 2024 due to its operational time, which is consequently related to the dismissal of number of workers and shifting others to the work on new unit.

Already recognized inadequate strategic planning of energy development of Montenegro also brings over-ambitious and primarily unreal assessment of necessary number of workers, with the aim of promoting and implementation of project of second unit of TPP ''Pljevlja''. On the basis of available data, constant reduction of number of workers in TPP “Pljevlja” is obvious, which would not be changed dramatically by construction of the second unit.

21 Draft Detailed Spatial Plan of TPP Pljevlja – Professional Service TPP Pljevlja, page 30 22 http://www.cdm.me/ekonomija/te-pljevlja-nakon-33-godine-rada-uspjesan-rezultat

PRICE OF ELECTRICITY

Investment plans and economic analysis of second unit of TPP “Pljevlja” are based on projected selling price of electricity of 65 €/MWh23, and projected production price of electricity from new unit, which is still not clear. This leads to disagreement and the emergence of various data as, examining the Draft Detailed Spatial Plan of TPP Pljevlja, it is not clear what will be the production price of electricity. Two prices are mentioned in the plan, one of 42,10 €/MWh24 , while it is stated that price of electricity from second unit of TPP “Pljevlja” with financial costs will amount to 38,34 €/MWh25.

In any example, these prices cannot be correct. The prove is the price of produced electricity compared to the price and calorie content of coal, which is shown in table below:

Table 2: Production price of electricity

Price of coal, €/GJ Produced price, €/MWh 2,1 42,1 2,4 44,8 2,7 47,5 3,0 50,1 Source: Draft Detailed Spatial Plan of TPP Pljevlja

As already mentioned, for operation of first unit of TPP “Pljevlja”, coal of quality 9.211 kJ/kg26 is used, with current coal price of 25,65€/t27, which means that coal price is 2,78 €/GJ, and according to the Table 2, it represents production price of electricity of 47,5 €/MWh, as confirmed by EPCG’s statements that current production price from first unit is about 50 €/MWh 28. This means that, if you look at average wholesale price on European electricity market29, which amounted to 31,4 €/MWh30 for 2014, first unit of TPP “Pljevlja” had losses of 16,1 €/MWh in 2014, it represents, on the basis of reached production of the first unit of 1.322.000 MWh31, loss of 21.284.200 €.

Related to this, production price of electricity from the second unit of TPP “Pljevlja”, in accordance with the quality of coal in deposits, its price, costs of paying off the loan and interest rates, costs of opening new mines, opening new landfills, costs of expropriation and costs of CO2 emissions, according to all indicators, it cannot be below 47,5 €/MWh, i.e. below production price of electricity gained from the first unit. Moreover, price of produced electricity from the second unit would be much higher than this figure.

23 Draft Detailed Spatial Plan of TPP “Pljevlja” - EPCG ''Information about the project “TPP Pljevlja II”, page 121 24 Draft Detailed Spatial Plan of TPP “Pljevlja” - EPCG ''Information about the project “TPP Pljevlja II”, page 121 25 Draft Detailed Spatial Plan of TPP “Pljevlja”, page 123 26 Draft Detailed Spatial Plan of TPP “Pljevlja”, page 31 27 Contract on coal sale- Coal Mine and Thermal Power Plant 28 http://www.epcg.com/sites/epcg.com/files/multimedia/gallery/files/2012/03/list346.pdf, str.9 29 https://www.eex.com/en/ 30 https://www.ise.fraunhofer.de/de/downloads/pdf-files/data-nivc-/folien-electricity-spot-prices-and-production-data-in- germany-2014-engl.pdf 31 http://www.epcg.com/o-nama/proizvodnja-i-elektroenergetski-bilans

Prices of electricity on European markets, where Montenegro is planning to sell its surplus of produced electricity, are formed on the basis of demand and supply but also on the basis of production of electricity from renewable sources of energy. According to International Energy Agency, there are growth projections by 202032, which decrease wholesale price of electricity produced from fossil fuels. Although electricity price in 2014 was 31,4 €/MWh, its growth is not expected after 2020. Even in the case of electricity price growth, the second unit would operate with losses by 2030, when it could start operating with slight profit but uncertain, because price increase will be affected by renewable energy source, which price of produced energy is constantly decreasing in the last couple of years33. Besides, if at any time increase the price of coal or emission permits for CO2 occurs, and there are some measures for their suppression, such as for example permits for CO2 emission, and which currently amount to 8 €/tCO234 , and in further years it would be between 20-30 €/tCO2, it would have enormous consequences if the construction of the second unit of TPP “Pljevlja” is implemented, therefore production price of electricity would grow and losses increase.

Planned selling price of electricity from the second unit is high and uncompetitive while production price is unrealistically low, therefore huge losses are notable, conditioned by redirecting other markets to renewable energy sources and by decrease of their production price of electricity compared to coal.

TOPLIFICATION

Thermal Power Plant ''Pljevlja'' started operating in 1982. Commitment of EPCG was also toplification of Pljevlja for which connection was put on facility, during the construction of the first unit. However, after 30 years of operation and 40 million of tons of coal which was burnt in TPP, that project was not implemented. Now, for the need of construction of second unit and updated story about pollution in Pljevlja, we talk again about toplification project, as possible solution of pollution in Pljevlja.

However, although commitment of EPCG, it is stated by Draft Detailed Spatial Plan of TPP Pljevlja, was: ''supply of Pljevlja with district heating from new unit after entering the unit in Power System in 2020, was not taken into account for now, because it depends on several element and firstly on feasibility study of construction of second unit and final decision of investor in Thermal Power Plant “Pljevlja” and local communities, which should previously finish distribution system for district heating by their own financial resources (about 20 million euros, source: Action Plan 2008) and for most part of the town (about 70% of citizens would be supplied by district heating)''35.

Considering the time necessary for implementation of toplification of Pljevlja, and consequent inability to supply the whole area of Pljevlja, other solutions should be proposed, such as heat pumps and heating with pellet, for specific parts of the town that cannot be toplified.

32 https://www.iea.org/Textbase/npsum/MTrenew2014sum.pdf 33 http://www.cnbc.com/2015/03/17/is-renewable-energy-ready-to-disrupt-fossil-fuels.html 34 https://en.wikipedia.org/wiki/European_Union_Emission_Trading_Scheme 35 Action Plan of implementation of Energy Development Strategy of Montenegro by 2025 for period 2008-2012

Although it is represented as the only solution for pollution issue of Pljevlja in the case of construction of second unit, toplification project is not secure, nor clearly defined by Draft of Detailed Spatial Plan. Besides, the same document clearly defines its negative role in operation of second unit due to the revocation of the operational force for toplification.

Project of toplification of Pljevlja would last 20-25 years and would be implemented in phases. Given that its finish would be expected in 2050, only 70% of citizens would be supplied by district heating. Although it is obligation of others, toplification project is obligation of local community with necessary investments of 20 million of euros. Those bills would be paid by the citizens of Montenegro, and not by those who exploit and make profit.

LANDFILLS

The largest, and the most important landfill from the aspect of environmental protection is landfill Maljevac in Pljevlja. It was constructed three decades ago for waste disposal, i.e. disposal of ash and slag from TPP ''Pljevlja''. Originally, it was envisaged to operate only 15 years and to have maximum angle of 813.00 meters above sea level (recommended ending of exploitation because research have shown that stability conditions for statistic conditions are below minimum allowed)36 and that it should be replaced. Since then, it has been upgraded five times, exceeded maximum angles, its unstability determined, groundwater and surface water endangered as well as endangered surrounding villages by floating dust.

Image 3: Landfill Maljevac

Besides, law provided protected green area and buffer zone with width from 300 to 600m were never constructed. Also, law prohibited life of people in protected area of 300m was not met again, which caused expansion and convergence of landfill to the households. Also, obligation to cover landfill with water mirror in order to avoid wastage of dust from landfill was not met too.

36 Draft Detailed Spatial Plan of Thermal Power Plant Pljevlja

Although obligation of EPCG, the Government of Montenegro granted a loan from the World Bank for restoration and closure of Maljevac dam, and besides this, EPCG is planning to continue waste disposal on Maljevac by 2021, although its obligation of restoration and closure was 201637.

In fact, EPCG is planning to overshoot cassette 1 and 2 up to the angle of 832 meters above sea level, which will get additional 700.000m3 and 950.00m3 for waste disposal together with volume of third cassette to the same level of 832 meters above sea level and overall 3.450.000 m3 which would suit the use of Maljevac landfill by 2021. All this was confirmed by the announcement from EPCG that the route of 220kV transmission line which cuts landfill space with its clearance will be displaced as soon as possible, thus providing useful space for continued use of cassette 3 for waste disposal in a volume of 1.800.000 m3 38.

By the plans of the Government, i.e. the Draft Detailed Spatial Plan of TPP Pljevlja, it was decided to close landfill Maljevac and to open new landfill Šumani. But, examining the comments on the Draft Detailed Spatial Plan of TPP Pljevlja, EPCG requests to change that location with the location of current coal deposit- Potrlica. This would mean that waste, which was characterized as hazardous, is planning to be deposited in the heart of the town, even closer to the already poisoned residents of Pljevlja. According to all negative characteristics of waste material of TPP “Pljevlja” as well as proximity to the town, it is necessary to find another location and another way of depositing waste materials.

Landfill Maljevac is destroying the environment for 30 years in the surroundings compared the place where is located, and it affects the health of people, while EPCG and authorities do not comply with legal requirements and obligations.

Plans of EPCG to bring new landfill of hazardous waste in the very heart of the town will make another environmental disaster in ecological state.

New landfill of TPP ''Pljevlja'', primarily due to characteristics of waste material and proximity to the city, cannot be Potrlica, but it is necessary to find another location, in accordance with all regulations of environmental protection and rules of detailed characteristics of location, construction conditions, sanitary and technical requirements, the manner of operation and conditions of detention.

37 http://www.vijesti.me/vijesti/vlada-ce-sanirati-crnu-tacku-na-maljevcu-odlazu-pepeo-do-2017-851658 38 Comments on Draft Detailed Spatial Plan of TPP Pljevlja, pages 5, 6, 7 and 56

POLLUTION

By 30 years of operation, all natural resources in Pljevlja are destroyed or very endangered by the operation of thermal power plant, while ecosystem capacities are limited, which consequences can feel current generations of residents of Pljevlja, and without further limitations of pollution, future generations will be endangered as well. The most obvious issue in Pljevlja is the air quality, although other elements such as water, soil etc are not protected from harmful impact of operation of TPP “Pljevlja”. According to reports of Environmental Protection Agency (which often does not meet its daily obligation, does not publish the results of measuring air quality in Pljevlja) about air quality in the municipality of Pljevlja from 2011 and 2012, on the basis of measured values, it is concluded that there is huge amount of PM10 particles (suspended particles) and SO2 (sulfur dioxide) in the air in the municipality of Pljevlja, not only due to measured concentrations, but also due to large number of days with exceedances. Recorded number with exceedances of daily limited particles in 2011.39, 2012.40, and 201341, as well as 2014 and 2015 is shown in graphics below:

Graphics 3: Recorded number of days with exceedances of daily limited values

Number of excedeeng/annually The allowable upper limit emissions annually

217 193 177 184 158

35 35 35 35 35

Number of days with Number of days with Number of days with Number of days with Number of days with exceedances in 2011. exceedances in 2012. exceedances in 2013. exceedances in 2014. exceedances by 01.12.2015.

while, according to the Regulation on determining the types of pollutants, limited values and other standards of air quality, upper limit values cannot exceed more than 35 times per calendar year42.

39http://www.epa.org.me/images/izvjestaji/informacija%20o%20stanju%20zivotne%20sredine2011.pdf 40 http://www.epa.org.me/images/5.Informacija%20o%20stanju%20ivotne%20sredine%20Crne%20Gore%20za%202012.godi nu%20sa%20Prijedlogom%20mjera.pdf 41http://epa.org.me/images/izvjestaji/Informacija-o-stanju-ziv.sredine-za-2013.pdf 42 Regulation on determining types of pollutants, limited values and other standards of air quality (''Official Gazette of Montenegro', No. 25/2012)

Image 4: Pollution in Pljevlja

High pollutant emissions (operation of thermal power plant, exploitation of coal and opencast mining of coal, ash and slag landfill Maljevac, transport of coal to the thermal power plant, combustion of coal for heating) as well as weather conditions (Pljevlja is 60% of days annually under the fog, temperature inversions and poor ventilation are frequent) affect the air quality. Fog period lasts for 200 days annually. Ejecting water vapor from thermal power plant cooling towers, among other things, contributes to the increase of foggy days. Information of the Ministry of sustainable development and tourism, Environmental Protection Agency and municipality of Pljevlja from 2013, state that the trend of increasing the number of foggy days from 1974 was observed, when construction and opening of industrial facilities in Pljevlja started43. Natural conditions lead to poor ventilation of the valley of Pljevlja, which leads to long retention of fog. Fogs are frequent in autumn and winter days, they are long-lasting and very low. In such conditions, concentration of pollutants in air often occurs. Besides natural conditions which lead to poor ventilation, marl landfill of Coal Mine has important impact, which is disposed on a hill above the town, making the town closed for ventilation.

The biggest contribution to emissions that comes from the source on the municipality territory is thermal power plant as: NOx (nitrogen oxide), SOx (sulfur oxide), PM10 and PM2.544 (suspended particles), shown in graphics below:

Graphics 4: Amount of harmful emissions that comes from TPP ''Pljevlja''

Amount of harmful emissions that comes from TPP "Pljevlja" 120% 100% 80% 60% % 40% 20% 0% Nox 94% Sox 99% PM10 36% PM2.5 37%

43 Air Quality Plan for the municipality of Pljevlja 44 http://www.greenhome.co.me/fajlovi/greenhome/attach_fajlovi/lat/glavne- stranice/2013/12/pdf/Uticaj_TE_Pljevlja_na_zdravlje_stanovnistva_Pljevalja.pdf

Table 3: Measured emissions of pollutants from TPP „Pljevlja” for 2010 and 2011 (monthly average values)45

EMISSIONS

Suspended SO2 NOx CO particles mg/m3 mg/m3 mg/m3 mg/m3 Months 2010 2011 2010 2011 2010 2011 2010 2011 Jan 57 122 2994 4132 517 522 41 35 Feb 52 126 3272 4326 500 533 35 30 March 64 113 3026 4479 508 529 37 30 Apr 71 86 3099 4980 491 484 38 30 May 99 206 3338 5312 482 469 37 33 June 83 196 3397 4995 482 471 44 30 July 53 173 3082 4707 446 504 36 29 Avg 47 191 3097 4740 444 494 37 29 Sept 70 171 3120 4583 452 485 36 26 Oct 110 228 3423 4907 467 498 36 30 Nov 118 253 3350 4921 466 495 40 29 Dec 165 189 3552 4665 502 515 41 26

From previous table, you can see that limited values of emissions have exceeded permitted values for several tens of times, which shows that the air quality in Pljevlja is not at satisfactory level, which at the end has enormous impact on health of residents of the town.

30 years of negligent operation of thermal power plant led to endangered and limited ecosystem capacities. Current generations feel the consequences of pollution, and without further limitation of pollution, future generations will be endangered as well.

Environmental Protection Agency often does not meet its daily obligation and does not publish results of measuring air quality in Pljevlja. Also, initiative of civil sector and large number of citizens for establishing environmental inspector headquartered in Pljevlja was denied, while inspector does not punish the polluters, thus enabling them to continue to do what they do for 30 years without any compensation of damage.

All this goes in favor to the fact that authorities want to conceal the real situation in Pljevlja, regularly accusing individual combustion chambers as the sole polluter in Pljevlja, while allowing the smooth operation and non-fulfillment of obligations towards real polluters in Pljevlja.

45 Air Quality Plan for the municipality of Pljevlja

HEALTH CONDITION OF RESIDENTS OF PLJEVLJA

Professional services of health institutions from Pljevlja point to the worrying impact of pollution to the health of people, especially to the increase of number of respiratory diseases that are particularly reflected on children. When it comes to the group of respiratory diseases, the particular increase is in obstructive syndrome and asthma46. The most sensitive part of population on environmental pollution are children, elderly, pregnant women and persons suffering chronic diseases.

According to data from the Children’s Division of the General Hospital Pljevlja and Children’s and School Dispensary of Health Center Pljevlja, in overall morbidity according to data from 1985 and 2001, respiratory infections, infectious problems, infections and urinary tract problems, metabolic disorders and problems of neonates and infants are dominating47.

Data of Hygienic-epidemiological service showed tremendous growth of diseases of the respiratory system. Also, the proportion of acute respiratory illness in the total number of children in Pljevlja increased from 23% in 1985 to 35% in 1995 and 50% in 2001. Also, in 1985, 3% of children in Pljevlja were treated with asthma and this figure rose to 11% by 2001, as shown in the graphics below:

Graphics 5: Share of acute respiratory illness in the overall number of children in the municipality of Pljevlja 60%

50%

40%

30% % 2001 20%

10%

0% % acute respiratory % acute respiratory % acute respiratory % treated for asthma diseases in 1985. diseases in 1995. diseases in 2001. in 1985. and 2001.

According to the report of the Health Centre of Pljevlja, in the out-patient department, in the period from 2008-2012, there were an average of 237 diseases and conditions of the tumor, out of which 35 diseases and conditions were the carcinoma of the larynx, trachea, bronchi and lungs.

46 Air Quality Plan for municipality of Pljevlja 47 Air Quality Plan for municipality of Pljevlja

Table 4: Registered diseases and cancer conditions in Out-Patient Service of Health Centre of Pljevlja for period 2008 – 201248

NO.OF PEOPLE SUFFERING % OF PATIENTS WITH FROM CANCER OF THE CANCER OF THE YEAR NUMBER OF PATIENTS WITH LARYNX, TOTAL NUMBER OF CANCER TRACHEA,BRONCHUS AND PATIENTS LUNG CANCER 2008 219 23 10.5% 2009 193 30 15.5% 2010 211 43 20.38% 2011 280 43 15.35% 2012 282 37 13.12%

Professional services of health institutions from Pljevlja point to a worrying impact of pollution on human health for years, especially the increase in the number of respiratory diseases that are particularly reflected to children, while authorities remain indifferent to this problem at the same time.

The share of acute respiratory illness in the total number of children in Pljevlja increased from 23% in 1985 to 35% in 1995 and 50% 2001. In 1985 3% of children were treated with asthma, while that figure rose by 11% in 2001.

Although precise and official data about the number of patients and types of disease in Pljevlja still do not exist, existing data show that from the beginning of TPP’s operation in 1982, constant endangering and degradation of health of residents of Pljevlja take place.

48 Decision of Health Centre of Pljevlja, at the request of NGO Green Home from Podgorica, for information about the number of patients affected by cancer that are registered in PHI Health Centre Pljevlja in the period from 2007-2012, No.990 from 10.07.2013

EU STANDARDS

Through the signing of Treaty on forming Energy Community, Montenegro committed to the implementation of specific directives in the field of energy. One of commitment of Montenegro is to close the existing unit by 01.01.2018 or to search for so-called „opt-out“ and reduce the operation on overall 20 000 hours by the end of 2023, or to operate in accordance with limited values from EU Directive on large combustion plants No. 2001/80/EC49, namely:

SO2 - 400 mg/nm2

NOx – 200 mg/nm2

suspended particles PM10 – 50 mg/nm2.

If the existing unit of thermal power plant ''Pljevlja'' would operate by 2023 without improving filters and if it is planned to continue operating after 2023, it must be reconstructed and must comply with more rigorous limit values of the Directive on industrial emissions for new plants No. 2010/75/EU50, namely:

SO2 – 150 mg/nm2 (200 for technology of coal combustion in fluidized condition),

NOx – 150 mg/nm2 (200 for technology of grinding lignite)

Suspended particles PM10 – 10 mg/nm2

In order to meet EU standards, it is necessary to renovate thermal power plant, which means installation of new boiler and reconstruction of production line in order to meet BAT51 principle (Best Available Technology).

Besides, modern thermo energetic facilities must have desulphurization systems, efficient filter systems for solid particles, growth of energy efficient boilers, cogeneration facilities and number of other technological elements.

BAT principle is in force in the European Union (Best Available Techniques-best available technology) which requires that electricity must be produced from facilities that are today the best available technologies. This means that, if we become EU member state, facilities must be harmonized with IED Directive, i.e. Directive on industrial emissions because otherwise the European Commission can punish all facilities that are not in accordance with IED Directive.

49 https://www.energy- community.org/portal/page/portal/ENC_HOME/DOCS/286182/LCP_energy_community_treaty_IPPC_BREF_Christian_WIM MER.pdf 50 https://www.energy-community.org/portal/page/portal/ENC_HOME/DOCS/2394177/LexUriServ_1.pdf 51 http://www.elni.org/fileadmin/elni/dokumente/elni_forum/2010/Pres_LesleyJames.pdf

Firstly, it is necessary to meet environmental and energy efficiency standards. Estimates of electricity production from second unit of Thermal Power Plant ''Pljevlja'' show possible surplus of produced electricity that would not be exported, unless they conform to all EU standards and regulations, as well as export would not be possible if production electricity price is too high, i.e. as planned by Draft Detailed Spatial Plan, i.e. 65€/MWh.

In addition to the projected production electricity surplus from second unit of Thermal Power Plant ''Pljevlja'' of 1100 GWh52, and possible extension of operation of first unit of Thermal Power Plant after 2024, as well as plans for constructing hydropower plants Komarnica and Morača, wind farm Krnovo and other energy facilities, such amount of electricity will be produced that it will not be possible to sell it, given that all planned energy facilities which construction is planned in following years, and which are also planned to be electricity exporters. All of this brings to above mentioned conclusion that it will not be possible to sell and whom to sell that amount of electricity, as well as it will lead to additional reduction of electricity price, given that competition in the market will be huge.

In that sense, it is necessary to make long-term, strategic energy development plans and energy facilities that would be built on the principle of supply-demand, i.e. to build capacities for electricity production on the basis of demand.

Besides this, EU will increasingly switch to renewable energy sources in following years, which production price is already a serious competitor in relation to the cost of energy derived from fossil fuels.

Although a signatory to the Treaty establishing Energy Community, limited values of emission of Montenegrin legislation are not in accordance with limited values of emissions set out in EU legislation.

Estimates of electricity production from second unit of TPP “Pljevlja” suggest possible surplus of produced electricity that would not be able to export, unless they conform to all EU standards and regulations, and export would not also be possible if the export price of electricity will be the same as planned by Draft Detail Spatial Plan, i.e. 65€/MWh.

Lack of long-term, strategic energy development plans and energy facilities. It is necessary to build according to the principle supply-demand, i.e. to build capacities for electricity production on the basis of demand.

Montenegro, as member of the Energy Community is obliged to implement specific EU directives and standards, and as EU membership candidate energy-climate policy of EU.

52 Information about the project of Thermal Power Plant ''Pljevlja'' - II

CONCLUSION AND POSSIBLE ALTERNATIVES

In order to plan energy facilities, exact needs for energy of each country should be known. In Montenegro, as already said, this is not the case. Inadequately strategic planning of energy facilities and their production capacities takes place.

In the first place, although it is not commitment of the state, Montenegro is still subsidizing KAP with electricity, which leads our power system to electricity deficit and thus to the need of importing electricity and consequently to financial losses. Obsolescence of power network also leads to deficit since huge losses appear in the network.

As a signatory of several agreements and candidate for EU membership, Montenegro does not meet all of its contractually agreed obligations. Energy Development Strategy is planning exploitation of fossil fuels from domestic reserves, that are not sufficient for 40 years of operation of second unit, given that coal exploitation from Maoče reserves is not financially justified and it would be very complex. Besides, such planning does not represent sustainable planning and using natural resources, that are limited by operational time i.e. available quantities.

These plans also represent short-term thinking and plans of the Government of Montenegro which exclude needs of future generations, given that they do not think about current and future generations, who would obtain land with limited natural resources and with outdated power system. Construction of new thermo power facilities which would combust coal is not justified, not only due to insufficient coal supplies, but also due to low calorie content and the obligation to respect reduction of CO2 emissions. Existing technologies, the so-called “clean coal technologies” are still not clean. In fact, something called “clean coal” does not exist, since every combustion of coal produces harmful emissions, but, given the strength of energy lobby, those stories are used for “selling” the product to the developing countries, such as Montenegro.

This analysis clearly shows numerous issues, ranging from planning energy development, through production capacities, to raw materials used for electricity production and associated companies and their business.

But the issues do not end here. Project of construction of second unit is meaningful also from economic point of view. Projected price of its construction of about 360 million of euros is not final price and it could be up to one billion euros. Although it cannot be said in advance, what is now clear is the fact that second unit is now in operation, its operation on the basis of wholesale prices for 2014 would make a loss of 21.284.200 €. Besides, financing of this project would be from the loan that is guaranteed by the state, which means that taxpayers would stay behind this loan.

Nor from the point of environmental protection, this project is not any better. As plans on the level of EU to reduce harmful emissions of CO2 for 80% already exist, it is necessary to give up from the use of fossil fuels, in order to limit climate change consequences. Although member countries of the Energy Community have not yet specified objectives when it comes to reduction of CO2 emissions (carbon-dioxide), there are some measures in the EU used for combat them,

such as permits for CO2 emissions, which currently amount to 8 €/tCO253 and in following years it will be likely between 20-30 €/tCO2, which would have huge consequences if the construction of second unit ''Pljevlja'' is going to be implemented. Changes in legislation in relation to environment are not the only factor that will impact cost-effectiveness of this investment. Given that Montenegro is the member of the Energy Community, it must respect provisions of the EU related to state subsidies for fossil fuels, conclude long-term contracts on the purchase of energy and providing government guarantees.

Development of Montenegrin energy sector is possible if the authorities are planning the development, start thinking long-term for the benefit of the country and its citizens, and if they understand that we should turn to renewable energy sources, i.e. towards map of European energy path. If we continue with short-term planning practice, we will have energy facility that will not have target group to export electricity surplus, and altogether, with other costs and uncertainties of this project, the expense will be put on the citizens of Montenegro.

Montenegro should turn to, besides long-term planning, new energy paradigm, i.e. to seize the opportunity in the time of energy revolution and not to buy cheap and clean energy from those who invest in renewable energy sources, but to produce the energy itself.

The chance of Montenegro is not only in huge potentials of renewable energy sources, but also in increasing energy efficiency in building and industry. Savings in this sector could be between 40- 60%, therefore Montenegro could halve the needs for electricity by the energy efficiency measures and at the same time open new vacancies and industries that are related to this sector.

It is also clear that one large and more stable system is necessary for safe and stable functioning of every power system, primarily for periods of peak load, when it is necessary to to meet peak demand for electricity. This could be achieved by diverting strategic plans to smaller, i.e. decentralized facilities from renewable energy sources, which certainly carry less risk than the second unit, with simultaneous reconstruction and development of power infrastructure, which would gradually lead in the state close to the so-called “smart networks”.

53 https://en.wikipedia.org/wiki/European_Union_Emission_Trading_Scheme

This publication has been produced with the assistance of the European Union. The content of this publication is the sole responsibility of NGO Green Home and does not represent the views of the European Union.