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NRG Energy targets growth in Asia Pacific energy market

NRG Energy, the rapidly growing US electricity producer said on Thursday, that it was ready to make further investments in the Asia Pacific region following its purchase of Taiwanese generating plants last month.

According to the company’s Asia Pacific managing director, Keith Hillness, NRG has identified India as its core market in this region. NRG already has substantial power interests in Australia which are controlled from its Brisbane regional office.

Hillness said that NRG has acquired 30 per cent of the 325 MW Kondapalli natural gas fired power plant in Andhra Pradesh, south of India. “The India investment is small but it is part of our business development plan and we have identified the Indian market as our potential core project in Asia”. He said that the company is “well aware” of the ongoing dispute between the Indian government and Enron’s Dabhol Power Co. in Maharashtra over power tariffs.

In July, NRG bought approximately 60 per cent of Hsin Yu Energy Development Co, a Taiwan company that owns and develops power generation facilities. “Taiwan is one of the most attractive [power] markets for investment in Asia because of its strong and stable economy,” said David Peterson, NRG’s president, chairman and chief executive officer.

Hsin Yu currently owns a 170 MW combined-cycle gas turbine cogeneration facility, Hsinchu Phase I, at the Hsinchu Science-Based Industrial Park near Taipei. Hsin Yu is developing a 245 MW expansion of the Hsinchu facility and a new 490 MW greenfield project at the Tainan Science-Based Industrial Park in southern Taiwan. “It is a small investment, in terms of capital and risk, but serves as a valuable toehold from which NRG may evaluate expansion into specific Asian markets,” Peterson said.

NRG has also indicated its interest to acquire a stake in one of the three oil and gas-fired cogenerators in Singapore: Power Seraya (2860 MW), Power Senoko (2550 MW) and Tuas Power (1200 MW); which will be privatized by the end of this year. “We are still in the preliminary stage of talks, we are expecting Temasek Holdings [owner of the three cogenerators] to call for bids by year-end,” Peterson said. He however declined to indicate the investment value.

On Wednesday the company announced a further acquisition closer to home when it closed its acquisition of a 2255 MW project portfolio from Indeck Energy Services, Inc. NRG announced the purchase agreement on July 10, 2001. The portfolio primarily serves the Chicago energy market.

“This acquisition furthers our strategy of developing significant generation within core markets, in this case the Chicago-St. Louis-New Orleans corridor,” said Peterson. “NRG continues to build on its strategy of growing a diverse generation portfolio with this acquisition of peaking and mid-merit facilities to add to our 2400 MW of projects already in construction in the Chicago market.”

NRG acquired full ownership in five projects in operation, construction and advanced development. The portfolio includes combined-cycle and peaking power plants that employ highly efficient, natural gas fuelled combustion technology. The portfolio includes Rockford I and II Energy Centres, Bourbonnais I and II Energy Centres, and the Ilion Energy Centre, located in central upstate New York.

NRG is a global energy company engaged primarily in the acquisition, development, construction, ownership and operation of power generation facilities. NRG owns 21822 MW of generating assets worldwide which utilize fuel sources such as as natural gas, oil, coal and coal steam methane, biomass, landfill gas, hydro, and refuse-derived fuel.

Headquartered in Minneapolis, Minnesota, NRG has targeted a 25 per cent annual growth and anticipates having 75 000 MW of generating capacity under its ownership by 2005.