The City Hall of Oradea signed with Elsaco a contract of almost 20 million euro for the most important geothermal project in Romania in recent years, which involves the production of heating agent in the Nufărul I district of Oradea, by harnessing geothermal energy in association with heat pumps. “There are discussions about the possibilities of extracting thermal energy in the Călimănești-Căciulata area and even in the Bucharest area. It would be particularly interesting to carry out a geological prospecting work, to have a map of the potential of this geothermal energy, an extraordinarily interesting, cheap and ecological resource,” told Energynomics Valeriu Iftime, President of the Board of Directors of the group of Elsaco companies.
“In 2023 we aim to develop what we know how to do best, the energetical segment. For various cities that have filed for the use of thermal energy sources in cogeneration and for which we are prepared to make bids, we are awaiting the PNRR’s challenges,” added Valeriu Iftime.
What is the technology and what are the technical parameters of the Nufărul geothermal project? How will the geothermal system actually work? When will the work start and when will be finished? What was the total cost of the project? Are there other such projects in other regions of Romania?
The Oradea project is perhaps the largest project in Romania that uses geothermal energy and we are clearly talking about a national first in terms of innovation. Our project involves drilling at a depth of almost 3 km for the extraction of geothermal water, the construction of the geothermal thermal station and two re-injection stations, the installation of heat pumps, the construction of transport networks over a length of approximately 22 km and 277 mini-thermal points at consumers. It is an integrated project: extraction, processing through heat pumps and heat exchangers and then, transporting the energy to the final consumer.
The value of the works is approximately 20 million euro. We started the project last year, with the design part, and at the end of the year, we should finish it. The thermal power to be provided by geothermal energy, including the contribution of heat pumps, will be about 14 MW.
We must have this geographical chance to be placed on a hot water bag, as the Bihor area is. Moreover, there are other projects in Romania, of smaller sizes, where several drillings have been carried out. The possibilities of extracting thermal energy in the Călimănești-Căciulata area and even in the Bucharest area are being discussed. It would be particularly interesting to carry out geological prospecting work, to have a map of the potential of this geothermal energy, an extraordinarily interesting, cheap and ecological resource.
What are the company’s main ongoing investments and projects in the energy field in Romania? What are your plans for 2023/medium and long term? What are the latest figures for the current year Q1 2023 – turnover, EBITA, headcount?
The main projects we have now in progress mainly concern urban energy: the rehabilitation of heating networks in Bucharest, where we are working on 3 of the 5 lots, the rehabilitation of the thermal networks in the municipality of Constanța, the modernization of the thermal energy supply system of the municipality of Gheorgheni. We also manage projects aimed at modernizing the water and sewage infrastructure: the rehabilitation and expansion of two water treatment plants in Slatina, and irrigation works for the National Land Improvement Agency.
In 2023 we aim to develop what we know how to do best, the energetical segment. We are waiting for the challenges from the PNRR, for several cities that have applied on the part of thermal energy sources in cogeneration and for which we are prepared to make offers.
At the same time, we closely follow the subject of SCADA systems for water companies and have awarded important works in cities such as Timișoara, Slatina, Valea Nirajului (Mureș), Drobeta-Turnu Severin, Buzău, Brăila.
The year 2023 looks challenging for the Elsaco group. If last year we achieved, for the whole group, a turnover of 130 million euro, this year we aim to achieve a turnover of 200 million euro and the evolution of the first quarter confirms our predictions. Our target is a gross profit rate of 5-8% of turnover. Regarding the number of employees, at the group level the own staff is of almost 600, and together with the subcontractors that work exclusively for Elsaco we reach almost 1,000 people.
What are the main changes after the conflict in Ukraine in costs (CAPEX) and raw materials, and speed of project execution? Which market segments are you targeting?
The conflict in Ukraine has changed the economic context, and I have in mind especially metal production in Donetsk, one of the regions that had factories for all things steel. The conflict led to an increase in prices and delivery times, and the effect was clearly felt in 2022. At this moment things have settled down, now there are other suppliers that have taken over the requests from the market, and the effect of the conflict is not felt so strongly anymore. I have seen several economic forums that will be held in the area (Warsaw, Bucharest) and there is a need to prepare for future investments, and Ukraine can become a huge construction site and there will be a lot of work in everything that means infrastructure, especially in what we know how to do: energy and utility infrastructure – water and sewage, gas.
It is clear that there is a hemorrhaging of funding in the field of energy and water infrastructure. Apart from projects financed by POIM – Bucharest, Constanța, Râmnicu Vâlcea, Bacău, Timișoara, there will also be projects financed by PNRR and the Modernization Fund.
The area of renewable energy – photovoltaic projects is also very interesting because we are an important player today through a company in the group (Elsaco Solutions) that installs about 5 MW per month and we want to increase this limit. Also, there are several wind energy projects that we are developing, parks of approximately 200 MW each, one in Botoșani and one in the Buzău-Brăila area, we are only the developer, but we are in the area to implement, to build, given our experience as a contractor and the skills of the project managers in our group. Therefore, we focus on the energy market, renewable energy, high-efficiency cogeneration, thermal energy transport and distribution networks, and construction and modernization of wastewater treatment and purification stations.
How do you see, from a personal point of view, the economic evolution of Romania in the next period?
I am very optimistic that things are moving in a good direction, especially in the field of energy, where a lot of funds are allocated. The future can’t help but look good. And we are now more mature, we know very well what we have to do, we have a good organization and the idea of building in Romania, in other words, we have become a very good player.
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This interview first appeared in the printed edition of Energynomics Magazine, issued in June 2023.
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