ANNUAL REPORT - HSE

folios. In addition, the scope of stress testing was expanded
in 2008. Stress testing is a risk management
tool which is used in particular to analyse a potential
negative impact of an extreme change in the value of
a variable or a group of variables on the company’s
operations.
In the previous year, price risks were also controlled
by means of hedging a large share of the trading volume
by a counter-transaction, by purchasing derivatives
and by introducing new technologies, which were
adopted as part of the development plan of the HSE
Group and outline measures for improving environment
protection and people's health.
• in periods of increased TPP production, economic
limitations or any changes in the overall method
of CO 2
tax payments and in trading in CO 2
emission
coupons should also be considered.
In 2008 the production at hydropower plants within the
HSE Group was 375 GWh higher than planned, whereas
at TEŠ the plan was exceeded by 158 GWh and at
TET by 21 GWh. The deviations of actual daily flow of
water from daily forecasts are also reflected in deviations
of hydropower production from the forecasted
schedules. To the extent possible, the deviations were
balanced out by adjusting production at TPP and by
increasing sales and purchases.
ANNUAL REPORT HSE | BUSINESS REPORT
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Quantity risks
Quantity risk comprises the risks arising from production
uncertainty, consumption uncertainty and energy
supply uncertainty.
Production uncertainty is mainly associated with the
question whether energy will be available on 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 from hydropower plants.
Consumption uncertainty arises from the impact of
weather and temperature, load flexibility, seasonal
cycles and impact of the recession.
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.
Electricity production is exposed to the following risks
of deviation from the planned supply:
• the risk of non-supply of electricity from hydropower
plants due to hydrological and meteorological conditions;
• the risk of non-supply of electricity from thermal
power plants due to outages or technological and
ecological limitations of production;
• the risk of non-supply of coal from the Velenje coal
mine due to production hold-ups caused by outages,
failures of technological systems, accidents or other
disturbances;
At the thermal power plants, a 2 to 4% unexpected
production outage has to be considered in addition to
the planned shutdowns due to overhauls. This percentage
corresponds to ten to twelve daily production
outages, which can be offset by starting up gas-fired
power plants, but only for short periods. Alternatively,
to the extent possible, outages can be offset by reallocating
the use of HPP accumulation and purchasing
electricity on the market. In 2008 TEŠ's unexpected
production outage stood at 1%. This unfavourable outcome
is primarily the result of Unit 3 breaking down.
TET's outage rate stood at 2.4%.
Thanks to a less complex production process, HPPs
are more reliable. The unexpected production outage
at DEM stood at 1.2%, at SENG at 2.4% and at HPP
Boštanj at 33.8%, in the latter case mainly due to the
failure of generator 2.
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 coal mine’s technical management,
the majority of potential outages could be remedied
without significant production interruptions, and rarely
would such breakdowns result in 14 to 20 days of
interrupted supply. There is 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 stand at 3,000 TJ (February–October) and
4,000 TJ (November–January).
The HSE Group's electricity production is managed
from the control centre in Maribor. The main objectives
of production management are as follows: