Annual report - HSE

It has been estimated that market risks were managed adequately, considering the given
limitations.
Quantity risks
Quantity risk comprises risks arising from production uncertainty, consumption uncertainty
and energy supply uncertainty.
• Production uncertainty is mainly associated with the question whether electricity will
be available in the market. It is also linked to operational risk, which aims to assess
the probability and effect of a turbine or any other production unit failing. Particularly
important is the impact of uncertain hydrology because a large share of electricity is
supplied by hydropower plants.
• Consumption uncertainty arises from the impact of weather and temperature, load
flexibility and seasonal cycles.
• Energy supply uncertainty arises from random failures of power lines and other
equipment, or from interventions by the power transmission network operator due to
transmission line overload.
Risk associated with electricity supply from HSE Group
Electricity production is exposed to the following risks of deviation from the planned
supply:
• risk of (absence of) supply of electricity from hydropower plants due to hydrological and
meteorological conditions, and failures and technological limitations to production;
• risk of (absence of) supply of electricity from thermal power plants due to outages or
technological and ecological limitations of production;
• risk of (absence of) supply of coal from the Velenje coal mine due to production hold-ups
caused by outages, failures of technological systems, accidents or other disturbances;
• in periods of increased TPP production, economic limitations or any changes in the
overall method of CO 2
duty payments and in trading in CO 2
emission coupons should
also be considered.
Departure from plans
In 2012, the HSE Group HPPs produced 85.5 GWh more than planned, with TEŠ and TET
respectively producing 96.7 GWh 31.5 GWh less than planned, which resulted in the HSE
production deficit of 43.7 GWh in terms of quantity planned.
The deviations of actual daily flows of water from daily forecasts are also reflected in
deviations of hydropower production from the forecast schedules. To the extent possible,
the deviations were balanced out by adjusting production at TPPs and increasing sales and
purchases.
At the thermal power plants, a 2 to 4% unexpected production shortfall has to be considered
in addition to the planned shutdowns due to overhauls. This percentage corresponds to
ten to twenty daily production shortfalls, which can be offset by starting up gas-fired
power plants, but only for shorter periods. Alternatively, to the extent possible, shortfalls
can be offset by reallocating the use of HPP accumulation and purchasing electricity on
the market. In 2012, TEŠ’s and TET’s unexpected production shortfall amounted to 2.6%,
and 2.9%, respectively.
Risk of interrupted coal supply from PV
Coal supply may be interrupted due to breakdowns of technological systems and accidents
or other disturbances affecting the extraction of coal. According to an assessment of the
coalmine’s technical management, the majority of potential shortfalls could be addressed
without significant interruptions to production, and rarely would such breakdowns result
in 14-20 days of supply interruptions. There is a relatively low probability of a major
breakdown that would require a six-month shutdown. Based on the above assessment,
minimum joint coal stocks of the HSE Group have been determined. They amount to 3,000
TJ (February–October) and 4,000 TJ (November–January).
Annual Report HSE 2012
2 Business Report
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