Americas News

FPL-Constellation merger abandoned

A proposed merger between the Florida-based FPL Group and Constellation Energy, based in Maryland has been abandoned, the two companies have announced.

The decision to abandon plans to merge was taken after a request from Constellation Energy which cited continued uncertainty over regulatory and judicial matters in Maryland and the potential for a protracted and open-ended merger process.

The decision to abandon the deal was reached amicably. The two companies will formally withdraw their pending merger approval applications before Maryland Public Service Commission, the Federal Energy Regulatory Commission and other agencies.

The companies had combined revenues in 2005 of $28bn.

NERC’s concern over capacity shortage

The North American Electricity Reliability Council (NERC) has expressed concern at the limited additional capacity planned for the USA power grid between 2010 and 2014 after the release of USA Energy Information Administration (EIA) figures showing that planned capacity additions for the period are only 15 000 MW.

The EIA survey shows that between 2005 and 2009 additions will reach 60,000 MW. The fall in planned capacity additions after this period will coincide with increased demand for power and strains in the US transmission grid system. The USA is likely to need more plants rather than fewer, according to the NERC.

Problems in the USA power industry could be exacerbated because much of the planned new capacity relies on natural gas. The USA will become increasingly reliant on imported natural gas in coming years making it vulnerable to global price swings. The net result is likely to be an increase in electricity prices.

A recent survey carried out by Black and Veatch saw 47 per cent of investor-owned utilities express concern over the age of their generating units.

Chubut complex with combine gas and wind

The Argentine president and the governor of Chubut Province had signed a deal for construction of a 550 MW power generation complex in the town of Dolavon.

The $402m project will comprise a 450 MW combined-cycle plant and a further 100 MW of wind generation.

The plant will be built by Emgasud, a local gas distribution company. Work is due to begin early in 2007 and the first phase of the plant should begin operating in January 2008. Final completion will be later in 2008.

Power from the plant will be exported via the 500 kV Puerto Madryn-Pico Truncado transmission line. The provincial government will be taking a 39 per cent stake in the project.

Oxyfuel project proposed in Saskatchewan

A proposed clean coal project in Saskatchewan, Canada, will use the Oxyfuel process to enable capture and removal of carbon dioxide (CO2) after combustion.

The project is being developed by SaskPower, Babcock and Wilcox (B&W) Canada and Air Liquide.

In an oxyfuel plant, coal is burnt in pure oxygen, making the capture of CO2 much simpler because it is not mixed with nitrogen. B&W will design a supercritical pulverized coal fired boiler for the project before a decision is made to proceed to the construction phase.

Current plans are for a 300 MW plant that would capture of 8000 tonnes of CO2 each day. The plant would burn locally mined lignite as fuel.

A decision to proceed will be taken in 2007 for completion in 2011. No site has yet been chosen for the plant.

GE Energy predicts US carbon trading

The president and CEO of GE Energy, John Krenicki believes that a system of carbon emission control system similar to the European Union Emissions Trading System (EU ETS) will be introduced into the USA. “It may not be the same but our sense is that there will be some value associated with carbon in the future,” he suggested.

Krenicki does not predict a timescale for the introduction; that will be a matter for the politicians. However he views the EU ETS as a positive influence, with the drive to greater efficiency, making companies more competitive rather than less, as some companies have claimed.

Transmission line auction attracts 32 companies

An auction of licences to build and operate transmission lines in Brazil has attracted interest from 32 companies, according to the companies power regulator Aneel. The licences are for six blocks of transmission lines with a total length of 1033 km and an estimated cost of $317m.

Prequalified companies, who had to deposit financial guaranteed by 14 December, were announced in November. Companies that have expressed and interest include 22 from Brazil, five from Spain and three from Portugal.

News Digest

Canada: Uranium prices are predicted to rise over the next two years, following the flooding of the Cigar Lake uranium project. Cigar Lake is expected to produce around 15 per cent of global mine supply.

Honduras: State-owned Empresa Nacional de Energia Eléctrica is to install 35 000 smart meters for residential, commercial and industrial applications supplied by the US company Elster Electricity. The EnergyAxis units will be installed over a period of six months.

Mexico: Construction of a 648 MW coal fired power plant in Mexico is being co-financed by Japan Bank for International Cooperation, Bank of Tokyo-Mitsubishi UFJ, Caylon Corporate and Investment Bank and ING Bank NV. The plant is being built by Carboelectrica Diamante, a Mexican corporation owned by Mitsubishi.

Mexico: The Mexican state utility CFE has awarded contracts worth $50 million to improve the transmission and distribution system in the country to ABB. The two contracts involve installation of substations and switchgear.

USA: An offshore wave energy project being developed by AquaEnergy Group Ltd has completed its Environmental Assessment process. The proposed wave plant will use modular AquaBuoy devices to convert wave energy into electricity. Each buoy has a generating capacity of 250kW.

USA: Indiana Gasification LCC is developing plans for a substitute natural gas plant in Indiana that will convert coal into pipeline quality natural gas. Construction is due to start in 2008, for completion in 2011. The plant could supply 15-20 per cent of the state’s residential and commercial gas demand.

USA: Merchant power developer GenPower has joined forces with private equity company First Reserve to form a joint venture to develop merchant power plants. The joint venture will take control of GenPower’s proposed 695 MW Longview coal-fired plant in West Virginia.

USA: The Department of Energy is to provide $450m to support the development of carbon sequestration technologies in North America. The funding, over the next ten years, will support seven demonstration projects.

Venezuela:Venezuelan power company EDC is planning two new share issues to help finance its investments. The latter include the La Raisa thermal power plant outside Caracas which will add 200 MW to its existing 2600 MW of generating capacity when completed in 2008.

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