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Choose the Technology of Tomorrow
Carmen Neagu, Region Executive, South East Europe, GE Energy
AUTHOR: Atanas Georgiev

Ms Neagu, on January 24 GE held an important event in Sofia, “Solutions for Sustainable Infrastructure Development in Bulgaria” for key stakeholders. What did you expect as a result from this event and what were the outcomes?

- This event was aligned with GE’s strategy to share best practice with all the stakeholders involved in infrastructure development. It was about state-of-the-art technology, global trends, challenges, pitfalls, and solutions. This is part of our strategy and GE is one of the few companies that globally shares its knowledge and achievements of substantial investment in R&D in order to foster development of the region.

Central and Eastern Europe is an important region for GE. We see a huge potential for growth and we have the ability to help set the right direction for future development. Of course, energy infrastructure is a very important topic and GE Energy, as the main player in the industrial segment of our company, plays a crucial role. Our session was meant to support the understanding of major trends in areas that can influence the future development of the energy sector in Bulgaria: grid infrastructure enforcement; energy efficiency, especially on the supply side , huge improvements that can be achieved by orienting and prioritizing investment in the Oil&Gas sector; power generation; water treatment  solutions that can help municipalities and industrial sector to increase the efficiency and optimize maintenance and operation of existing assets; measurement solutions; industrial electric efficiency solutions etc.

I was impressed to see the huge interest that this event raised in the Bulgarian business environment. As I already said in my opening remarks during the official start of the event, I was impressed to see old friends, partners, and customers that have the same way of thinking and the same vision for innovation and new technologies.

What kind of partnerships are you currently looking for in Bulgaria?

- Our engagement with authorities is always through sharing best practices and information that can help them shape the transparent, predictable, and reliable policy framework. Without such business environment, no investor will come. And energy infrastructure definitely needs such amount of investments. Without private foreign investment it will be very difficult, considering the financial crisis and the pressure on the state budgets all over Europe. This is the type of support we can offer to authorities - candid feedback and exchange of experiences and information to help them build this type of framework.

With our potential customers we also pursue developing a very constructive cooperation in order to make them understand the exact challenge and the solution that can fix their problem and to allow them to make wise decisions. If customers understand what the exact problem and the value of a certain investment and technology deployment are, it is easier for them to develop a good business case that can be financed. Then it is up to our skills to bid and win the project. However, I am positive that we have the best technology and the best solutions that can help us successfully perform in such a competitive environment.

From your point of view, what is the current state and development of the Bulgarian energy sector?

- Тhe Bulgarian energy strategy until 2020 is finalized and aligned with the EU visions and the major trends. It covers energy efficiency, renewable energy development, infrastructure enforcement, energy security, etc. Now the most important is to stick with this vision and to have a regulatory framework that is predictable and consistent with it. From this perspective, I think the most challenging part for Bulgaria in 2012 will be the implementation of the Third Energy Package and market liberalization of the electric and gas sectors. The way that Bulgaria will achieve and implement this framework will be a strong indicator for future investments.

Currently the TSO model is being considered, including keeping the state ownership on the grid and placing the grid operator under the Bulgarian Energy Holding. What is the investors’ view on this model and which model could be best for Bulgaria?

- It is up to Bulgarian authorities to define a model that fits better with the national vision for future. There are successful models in the region, with their good and bad sides, as each country has particularities. For instance, Bulgaria could follow the more conservative Hungarian market model, or choose a more market-oriented one similar to the Romanian.

We are ready to support the authorities with best practices and results on European level through our membership in different organizations. We can help the Bulgarian authorities if they need information from us.

If we compare the renewable energy segment in Bulgaria and Romania, why projects like the 600-MW Fantanele wind park are possible there and not present here? And what do you think will be the effect of the new RES law in Bulgaria - how will it affect the national market?

- First, there was a different choice of the two countries regarding RES support schemes. Also, there are different targets on national level - 16% for Bulgaria and 24% for Romania. Renewable energy is a part of the energy mix and it is up to the national energy strategy to define its role, including in securing the energy supplies.

At the beginning, the choice of Bulgaria to develop RES based on feed-in tariffs was better received than the declared option in Romania based on green certificates market. However, the lack of consistency in medium to -long-term vision for the RES development increased the uncertainty for their development in Bulgaria. Since its beginnings, the green certificates market, has been driven by the development of the energy market and seems to be a better choice - based on the results.

What do you think of the regional gas market development in terms of shale gas exploration and production? Bulgaria just voted on a moratorium, but Romania is going ahead with exploration.

- Shale gas is definitely the future as far as energy resources become more and more scarce. The trend to develop and explore for new energy resources is clear and important. Of course, new geological research is very expensive and needs a clear vision and strategy. It is already known that in CEE shale gas could be an opportunity in Poland, Romania, and Bulgaria. Big players in the oil and gas industry are the ones who have resources to make such investment in exploration. It is normal to happen like this, but maybe it would be a good direction to regionalize the shale gas vision - to put together the interest of these three countries for instance, so that each of them could share information and decide for itself on the strategy that it would apply.

Energy research is an important part of a country’s strategy. It is mandatory for authorities to have vision on this. Without such vision, it will be very difficult to oppose the interest of different companies to make exploration and it will be very difficult at a certain moment just to say “No”. It is good to have a vision and to know at what level you can partner. More and more public-private partnership needs to become an important driver of infrastructure development across the region. It is clear that state budgets will not be able to afford huge investments that need to be done in energy and in the same time develop education and healthcare.

The nuclear projects of Bulgaria and Romania - Belene and Cernavoda - seem to have this problem. They started as state-run investments. Do you expect some private companies to support these two projects?

- In terms of depleting fossil fuels reserves, the future without nuclear will be hard to be designed without new major discovery. The role of nuclear is definitely very important. It is still debatable at European and global level how nuclear will be included in our energy future, considering the related risks and the large costs. This is one of the fields where PPP will play an important role. It seems also that the decisions for such projects, especially in financial terms, are harder. Large investments need to be structured in order to build such projects. When we speak about prioritizing energy projects, the huge and cost-intensive investments are usually postponed due to financial crisis. There are a lot of medium-sized projects that can bring important benefits and that can be a priority. What has happened with Belene and Cernavoda delays in closing the financial agreements just confirms this view.

What are your expectations related to the economic crisis in Europe? Do you see some specific difficulties for the region of SEE? Are you optimistic?

- I am a moderate optimist because the countries in the region have experienced a lot of austerity measures for the last decade. From macroeconomic perspective, they are not as bad as other economies around Europe. Unfortunately, the financial crisis found the region in huge needs of investment to rebuild the infrastructure. There are so many needs that it will be difficult to prioritize. Therefore the transparent, predictable, and consistent regulatory framework plays an important role.

It is also very important for the region not to lose the momentum and not to direct the decisions on obsolete technologies. The investment environment does not allow a very quick process from the initial decision to project implementation. If we decide for a certain technology of “today” that is not up-to-date when we start the project, it will soon become a technology of “yesterday”. I challenge Bulgarian specialists and investors to think innovatively and to have the courage to choose state-of-the-art technologies. It can be a little more expensive as an initial investment, but its lifetime cost savings are worth it.

Carmen Neagu was born in Bucharest, Romania. She attended the Technical University of Bucharest and graduated in 1982 with a M.E. degree in engineering - thermal energy. She then started her career as a design engineer at the Institute for Studies and Power Engineering of Bucharest. In 1996, she joined ELCEN, Termoelectrica and Electricity National Company and has held various management positions in the fields of strategy and international affairs in power generation during the Romanian Energy Sector restructuring process.. In 1998 she became EU Phare Program expert in energy investment management. She worked also as associated professor with the Technical University of Bucharest. She is a member in the Board of Directors of the Romanian Committee for World Energy Council and member of other scientific associations.

Carmen joined GE in September 2005 as Country Executive for Romania, Bulgaria & Republic of Moldova having operational responsibility for GE Energy’s entire range of products and services in these three countries. Currently Carmen Neagu is GE Energy’s Region Executive for South East Europe, responsible for the markets in 11 countries.

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