Serbia Picks Bechtel For Largest Hydropower Project

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

A consortium led by U.S. company Bechtel has emerged as the only qualified bidder for Serbia's largest power endeavour, the Djerdap 3 pumped storage hydropower project.

Sole Qualifier

Serbia's government has announced that a consortium led by Bechtel is the only qualified bidder after its first call for interested parties for the construction of the major Djerdap 3 pumped storage hydropower project. 

With a proposed capacity of up to 2.4 gigawatts (GW), Djerdap 3 is the country's largest power project and reinforces the importance of hydropower in Serbia's power mix. The news comes at a time when Europe's heatwave over the past month has decreased hydropower output in Serbia, and elsewhere, due to extremely low river levels in the Danube. According to Industrial Info Resources data, there are three Djerdap 3 projects worth almost US$7 billion in investment. The government said that the project is "of strategic importance for the energy security of the Republic of Serbia, the stability of the power system, and the integration of renewable energy sources of large capacity." The project will also be capable of supplying power to other southeastern European nations.

Minister of Mining and Energy Dubravka Đedović Handanović revealed that six companies submitted expressions of interest in early July but only a consortium of Bechtel U.K. Holdings International Limited and Turkey's ENKA Insaat ve Sanayi A.S. will go through to the second phase. Other bidders included Fresh Development with LDS, and Voith Hydro. The Serbian government, through the U.S. Embassy in Serbia, invited the participation of U.S. companies in June, furthering a strategic energy cooperation agreement between both countries that came into play last year. 

The Project

Djerdap 3, which has been mooted for decades, will be developed in three phases with capacities of 600 megawatts (MW), 1,200 MW and 600 MW, respectively. Final specifications are subject to change. It will be located in eastern Serbia, upstream of the Djerdap 1 hydropower plant, on the section of the Danube River that forms the border with Romania. The main elements of the project will include the upper reservoirs Pesača and Brodica, dams and associated hydraulic structures, a system of tunnels for water intake and discharge, an underground or surface powerhouse with pump-turbine units, as well as accompanying electromechanical, hydromechanical and power infrastructure, including connection to the transmission system. It is expected that after the next two phases of the bidding process, the initial development phase will kick off and include design, feasibility studies and environmental assessments. This is expected to take less than 36 months from awarding of the contract, and commissioning of the first phase of Djerdap 3 is slated for 2036. Industrial Info Resources is tracking 53 hydro projects at various stages of development in Serbia worth US$9.4 billion in investment.  

Hydropower Suffers in Heatwave

Serbia relies on hydropower for roughly 25% of its power. In recent months, however, the heatwave gripping Europe has seen output from its existing Djerdap 1 hydropower plant fall off dramatically due to extremely low levels of water in the Danube river. May and June marked the weakest monthly output at Djerdap 1 since it began operations in 1970, state electricity company EPS told media. Danube inflows are standing at around half of their long-term average and close to the biological minimum, according to the company. Djerdap 1 has recently been generating slightly more than 5,000 megawatt-hours (MWh) of electricity per day, about one-third of its average daily output. EPS also said that the Danube's low water levels were affecting cooling systems at its Kostolac thermal power plants, reducing their output. Energy Minister Dubravka Djedovic Handanovic said that barges and fuel tankers using the Danube across Serbia, Hungary and Romania are being forced to use just 30-40% of normal capacity due to the low water levels. EPS Chief Executive Officer Dusan Zivkovic, speaking to Reuters, added: "Unfortunately, forecasts are not any better, and some suggest that at the beginning of August we will have (Danube water) inflows of about 1,500 cubic meters per second, which is the biological minimum." 

Key Takeaways

• Serbia's government has picked a consortium led by Bechtel as the only qualified bidder for the construction of the major Djerdap 3 pumped storage hydropower project. 
• The Djerdap 3 project will have a combined capacity of 2.4 GW across its three phases.
• Industrial Info is tracking 53 hydro projects at various stages of development in Serbia worth US$9.4 billion in investment.  

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).