Edison Mission Energy said emphasis on foreign power projects is in vogue once again.
Alan Fohrer, CEO of Edison Mission, described his company’s overseas investments today at this year’s Arthur Andersen Energy Symposium in Houston. Last year, executives downplayed international investment and talked about hundreds of gas turbines on back order for the booming US power market, Fohrer recalled. Interest in overseas projects is growing while interest in domestic projects is not as strong.
“Just one year ago that statement would have been reversed,” said Alan Fohrer, CEO of Edison Mission Energy, a unit of Rosemead, Calif., based Edison International. “Twelve months from now our strategy will probably be different.”
Fohrer said his job as chief strategist is simply to “manage change.”
Edison has transformed itself into an energy company with a marketing and trading business from a basic project company 2 years ago.
Diversification is the main watchword for Edison’s strategy. The company seeks diversity in fuel mix, geographical location, types of power plants (peaking, intermediate, or base), and source of cash flow. Edison gets 60 à¯¿½70% of its cash flow from contracts and 30-40% from merchant plants, he said.
Edison is forging ahead with a 1,200 Mw coal plant located in Indonesia. That project would have been a candidate for a write-off last year, he said. But today the Indonesian power plant looks good with its fixed purchase power agreement with the Indonesian government to be paid in US dollars.
Edison is developing a hydroelectric power project in the Philippines that adds to the company’s fuel mix and is essential to Philippine voltage control. Edison’s first foray into renewable power is underway in Italy with a 140 Mw wind project.
“We observed strong support for renewables in the European Union,” he said.
Another change from strategies in vogue last year is the approach to holding assets. Edison Mission is a long-term developer, owner, and holder of assets, Fohrer said. Going forward Edison will focus on its long-term backlog of projects and will improve its skills in risk mitigation, he said.