The effective points of view of Hunedoara Energetic Complex

The future of coal mining in Jiu Valley is acutely conditioned by a multitude of factors, arising from the interference of force lines of different decision centres, the effects of which – often cumulative or even antagonistic – may lead to irreparable consequences. The failure to take into account the totality of all the economic, social-geographic, technogenic and anthropogenic aspects have not allowed until now the outline of realistic and viable scenarios which may cut the Gordian knot of the multilevel challenge which this socio-industrial complex faces, scenarios which shall be the basis of a coherent and consequent strategy, challenges which unsolved may produce irreversible and dramatic effects for the future of the area as well as that of the national economy. The paper intend to offer – at least as a methodological approach – an assessment based on the scenarios of benefits and losses which the national economy may record by ignoring or not taking into a fair account of the proportion of the role of this industrial complex for Romania’s energetic future.


INTRODUCTION
An analysis, even superficial, of the decision to appoint the Hunedoara Energetic Complex (HEC) in November 2012, proves that it was taken considering criteria related mainly on the emphasised interdependence between the energetic resource supplier (the internal producer of energetic coal, the former NCC of Petroşani, divided in 2001 in two independent entities, namely NCS and NCCMJV), and the two central heating and power producers existent in the area, respectively Mintia and Paroşeni Central Heating Plants, and secondly on social criteria related to the quasi mono-industrial character of the area.

TECHNICO-ECONOMICAL CONSIDERATIONS
The two central heating plants included in the structure are different from several points of view: -The theoretic designed and installed capacity of Mintia Central Heating Plant is of 1285 MWh, comprised in 6 groups (5 210MWh groups, out of which one was put out of operation in 2012, and a 235MWh rehabilitated one), but there are also a set of problems which are not to be neglected, namely: o The removal of operation of two groups as they do not meed the European environmental standards; o Total removal of a group which was proposed for cassation; o Investments for the rehabilitation of the technology of the desulphurisation and dense slam installations for the two remaining groups which are estimated to an approximate amount of 203.5 million Euros.
-Paroseni Central Heating Plant disposes of a single rehabilitated group (respectively Gorup IV), which has a capacity of 150MWh, the commercial operation of which began in 2007. Environmental conditions are partially met as the investments for the rehabilitation of the desulphurisation and dense slam installations having begun in 2013, with a period for finalisation of 31 months from the beginning of the investment.
As it has already been mentioned, the main common denominator of the two central heating plants is represented by the fuel they use, respectively energetic coal extracted from Jiu Valley coal basin. Theoretically correct, the integration of viable mines (belonging to the NCSH, later on having become the mining division of the ECH) within this complex was carried out without a thorough economical assessment and without being based on a coherent restructuring and technologic rehabilitation programme.
The need of such a programme is proven by the extraction costs of coal which vary from 74 lei/Gcal, in the case of Vulcan mine, and respectively 157 lei/Gcal, in the case of Lupeni mine, with an average therefore at the level of the mining division of 104 lei/Gcal.
The viability barometer of the entire complex revolves around the selling price of energy on a competing market, an average price for September 2013 of 171.89 lei/MWh (PZU) and of 195.82 lei/MWh on PCCB. As a basis for comparison, the production cost of one MWh is situated around 270 lei considering that coal was bought with 69 lei/Gcal.
Considering that almost 70 % of the cost of a MWh is represented by coal, it results therefore that the production cost is 540 lei/MWh. Therefore, it is required for the Hunedoara Energetic Complex to solve the problems which weren't dealt with since 1990 until present times.

POSSIBLE SCENARIOS REGARDING THE FUTURE OF THE HUNEDOARA ENERGETIC COMPLEX
Considering the above presented facts, the following scenarios regarding the future of Hunedoara Energetic Complex may be formulated: It is therefore considered that these scenarios require thorough technical and economical fundaments, in the shortest period of time possible in order to be considered as a base for future political and administrative decisions.
If Scenario no. 1 is taken into consideration, the scenario in which the disappearance of the coal mining industry of Hunedoara County it is rendered effective, then the socialeconomical effects shall occur immediately as well as on a long term. These statements are supported by a series of data brought forward herein after.
The menace of the coal mining industry of Hunedoara County may be measured in immediate effects as well as in long term ones. It is although considered that the two companies created at the end of 2012, which divide the mines in sustainable and unsustainable ones, need to represent only a step on the road to reinvigorate the activities of the Jiu Valley coal basin.
On one hand, The contributions for the employees for the consolidated State Budget, representing health, unemployment, social state contributions, taxes amount yearly to approximately 105,000 thousand lei, while the main destination for the expenses of the net income are food and beverages which amount to approximately 51,518 thousand lei, the purchase of non-food merchandise being estimated around 46,795 thousand lei, services 38,209 thousand lei, income taxes, contributions and other fees 36,707 thousand lei.
The National Society of Coal has set to have total revenues of 268,620 thousand lei for 2013 while The National Company for the Closing of Mines total revenues of 517,846 thousand lei.
After the National Society of Coal was appointed to be a composing part of Hunedoara Energetic Complex beginning with July 2013 the budget of the new company was the following: Romania, as a consequence of the cease of coal mining, directly loses every year approximately 51.91 million Euros from contributions to the State Budget and the local budgets to which unemployment benefits are added, which need to be paid to former or potential future employees. The unemployment rate of the county is to increase with over 7.8 %. The turn-over of partner companies and other connected industries is directly affected and may drop with approximately 235.97 million Euros every year, while the losses from the contribution of the employees to the turn-over / companies' revenues / public institutions which produce or sell food, non-food merchandise, services, contributions, fees, taxes, etc. would amount to 46.16 million Euros every year.

B. Scenario no. 2 -pessimistic moderated
Romania, as a consequence of the decrease of the coal mining activity, directly loses every year approximately 42.27 million Euros from contributions to the State Budget and the local budgets to which unemployment benefits are added, which need to be paid to former or potential future employees. The unemployment rate of the county is to increase with over 4.48 %. The turn-over of partner companies and other connected industries is directly affected and may drop with approximately 39.39 million Euros every year, every year, while the losses from the contribution of the employees to the turn-over / companies' revenues / public institutions which produce or sell food, non-food merchandise, services, contributions, fees, taxes, etc. would amount to 33.42 million Euros every year.

C. Scenario no. 3 -pessimistic moderates
Romania, as a consequence of closing-down the coal mining activity, directly loses every year approximately 62.36 million Euros from contributions to the State Budget and the local budgets to which unemployment benefits are added, which need to be paid to former or potential future employees.
The unemployment rate of the county is to increase with over 6.22 %. The turn-over of partner companies and other connected industries is directly affected and may drop with approximately 60.76 million Euros every year, while the losses from the contribution of the employees to the turn-over / companies' revenues / public institutions which produce or sell food, non-food merchandise, services, contributions, fees, taxes, etc. would amount to 27.81 million Euro every year.

D. Scenario no. 4 -optimistic
There are no losses, the State revenue would amount to approximately 51.91 million Euros million Euros from contributions to the State Budget and the local budgets, the contribution of the turn-over of partner economic entities and activities connected to coal mining, would amount to approximately 235.97 million Euros per year, while the contribution of employees for the turn-over / companies' revenue / public institutions which produce and / or sell food merchandise, services, contributions, fees, taxes, etc. would amount to 46.16 million Euros every year.
As a synthesis, the losses / revenues for the 4 scenarios are compared and presented in absolute values in Figure , while Figures bring forward their losses for scenarios no. 1, 2, and 3, and respectively the revenue for scenario no. 4 in percentages per category.

Strengths:
 The existence of an industrial reserve of approximately 260 million tons, in the seven active perimeters found within the concession of the two mining companies, out of which approximately 94 million tons is considered to be exploitable with the actual mines network. This reserve may ensure the energy production for the following 100 years;  The surface and underground existent coal mining and rail hauling and transport infrastructure to its beneficiaries;  Concentrating the mines in a relatively small area;

Volume 29
 Reduced distance between the mines and its beneficiaries;  The existence of qualified and trained personnel for the mining acticity, meaning tradition and professional experience on all levels;  The demand for trained staff is covered considering the training quality and the number of people;  The essential contribution to the safety of national energy if there is a crisis of other resources;  The parameters of the products developed with the help of present mining and preparation technologies compatible with the coal burning installations belonging to the beneficiaries;  Coal preparation installations may realise products with a high energetic content;  Romanian Central Heating Power Plants are designed to operate with solid fuels with the quality parameters of Jiu Valley coal, which creates a certain dependence on mines;  The required coal quantities may be ensured for the beneficiaries, for the right quality according the their demand and for a price much smaller than the price of imported coal;  Strategic coal reserves may play an anti-speculative role, fact which the European Union did not fail to highlight considering that the Union in incapable of negociaitng the price for energetic resources and cannot put pressure on these markets;  The high proportion of haulage and transportation costs comprised in the price of coal (approximately 50 % of the price of coal imported from Europe and Japan), fact pleading for the use of national and local coal.

Weaknesses:
 The tough geological-mining conditions, such as: high mining depth, complicated tectonics, the presence of methane, and others;  Low caloric power and the high content of sulphur of the Jiu Valley coal compared to the offer of external markets ;  Reduced possibilities to significantly increase the quality of production with the actual operating technology;  The reduced mechanisation degree of the mining activity, the moral and physical wear of mining machineries and equipments (coal mining mechanised complexes, the longwall and face cutter, drilling equipments, underground hauling equipments, underground waters evacuation equipments, air shaft installations, extraction installations, automation and dispatch equipments) (Siminică & Traistaru, 2013);  The lack of modern technologies which can adapt to the conditions of the ore, the insufficient number of modern coal cutting equipment, roof supports, hole drilling, rock cutting for the preparation and mine opening works and well drilling;  Difficulties with the selective coal mining;  Increased production costs (Dima, 2013);  Labour productivity on a mine level, under 300 t/person/year, situated a lot under the world level;  Increased mining accidents risk favoured also by the lack of monitoring means of the coal face space;  Failure to carry out the investment works on time, investments required for the operation of new production capacities of most of the mines;  Failure to carry out in time the geological researches for the identification of which ore presents itself with the best mining conditions with direct implications on the development of the viable production capacities ;  Unused industrial constructions inside the perimeter of the mines, due to having narrowed down the mining activities and failure to use them for other purposes. Opportunities:


The increase demand of primary energy sources;  A relatively stable outlet market;  Possibilities to increase the revenues by improving the quality of yhe producs;  The increase of the proportion of coal within the heating and power production on an international level;  Still increased energy production costs from regenerating sources;  The appointment of Hunedoara Energetic Complex;  Maintaining an adequate mining infrastructure for coal mining in order for the continuity of production to be ensured for a long period of time;  The possibility to implement methane holding installation from coal and methane emissions of the mined ore;  Improving the quality of sold coal with small investments for technologic rehabilitation of the sorting equipment of each mine; The lack of a controlled price of coal close to the production cost;  The lack of funds for an extensive development of mining;  Reduced chances to ensure the investments for rendering the mines viable considering the present organisational conditions;

TECHNICAL ECONOMICAL PROPOSALS FOR THE CAPITALISATION OF COAL
The propositions are based on the pure truth verified in practice, namely "If there is no investment any activity inevitably meant to fail".

CONCLUSIONS
In order to avoid bankruptcy it is extremely important to render the mines viable, to capitalise methane which accompanies the coal deposit of Jiu Valley as well as perform a thorough waste management. It may therefore be contributed to the assurance of energetic independence of the area and a series of other problems related to the geographical area of the future HEC may be solved. HEC is found in a delicate situation generated by the difficulties with which the National Energetic System is currently facing, namely a surplus of energy created by regenerative and hydro sources considering that Romanian energetic consumption has dramatically decreased as well as the Agreements signed by the Government with external creditors such as the IMF -WB -EC regarding the future Hunedoara Energetic Complexmake it private or in case of failure, bankruptcy.
It is appreciated that the action of going private is going to fail, and bankruptcy was agreed upon through a letter of intent signed with the IMF -WB -CE, action which shall be finalised with the bankruptcy of viable mines as well as Paroseni Central Heating Power Plant.
If going private shall fail, in order not to reach in the situation to decide judicial management, moment from which it is practically impossible to avoid bankruptcy, the following actions are proposed: a) The development of a project by the specialists of the two central heating power plants, the viable and non-viable mines, of the University of Petrosani, and of the Local Administration, for the identification of consumers of thermal and electric energy supplied by Paroseni Central Heating Power Plants, considering that the price of natural gases is continuously increases. The main measures which were proposed for this strategic document are the following: -The development of the heating system within the entire Jiu Valley through works for the rehabilitation of the main pipe and its extension to Uricani and Petrila; -The rehabilitation of the distribution network for the thermal agent and the existent district heating substations and the construction of new networks in Uricani and Petrila;

International Letters of Social and Humanistic Sciences Vol. 29
-The supply of energy from Paroseni Central Heating Power Plant to all the local administrations, population and economic entities with competing prices; -Carrying out collateral investments which will use the existent energetic infrastructure; -The purchase of an ecologic waste burning installation and using the thermal agent in the heating network.

b)
Rendering the mines of Jiu Valley viable. It is appreciated that the demand of coal, corresponding to the energetic consumption of Jiu Valley, does not exceed approximately 1.5 million tons per year, if the additional energy produced by burning the waste and the methane collected from the coal deposits are also taken into consideration. This production may be realised with approximately 2,500 -3,000 employees. Taking into account substantial technical-economical criteria, the mines need to select the deposits which offer the most favourable mining conditions for the application of modern operating technologies.