Indonesia gives four IPP contracts the go-ahead

The Indonesian government has approved new power contracts with four independent power producers, a move that should help the country avoid a power crisis, said the director general for electricity, Luluk Sumiarso.

He said the four IPPs had been contracted to develop the Gunung Salak geothermal power plant in west Java, the gas and coal-fired Palemba Koreang Timur plant in south Sumatara, north Sulawesi’s Amurang plant and the Sibolga plant in north Sumatara.

The four IPPs were among the 27 whose projects were suspended by the government in the wake of the economic crisis. The government suspended the projects to prevent national utility PLN from sliding into bankruptcy, as under the contracts PLN would have purchased power from the IPPs at relatively high dollar-based rates at a time when the rupiah was plunging in value.

China seeks discount on model projects

Chinese authorities are pressing two foreign-owned power plants to slash the price of their electricity. The move may threaten profits and could damage Beijing’s ability to attract overseas funding for its vast power sector.

Government officials in the south-eastern province of Fujian said that because of considerable local oversupply, it had told Meizhou Wan, a 720 MW power station owned by a large foreign consortium, and Houshi, a planned 3600 MW Taiwanese plant, to sell power at a discount.

Meanwhile, elsewhere in China, Electricité de France (EDF) and Alstom have paid a fine of $30m for a delay in the construction of what was supposed to be a model power project in Gangxi province.

In September 1997, the two firms signed a contract for a coal-fired plant at Laibin in Guangxi with two 360 MW generators worth more than $600m in the first build-operate transfer project in the power sector. An EDF official in Beijing said the two firms had paid the fine due to building delays. The firm had taken out insurance for the project and the advantage of the scheme meant that the risk was spread out. “We are looking at other opportunities. Over the long term, China will have a power shortage,” he said.

Korea to privatize genco despite power workers’ strike action

The South Korean government is determined to proceed with plans to privatize power monopoly Korea Electric Power Corp. (Kepco), despite the 38 day-long strike by power workers turning into a general nationwide strike.

The strike’s end came a day after the Korean Confederation of Trade Unions (KCTU) called off a planned sympathy walkout and reached a compromise with the government on behalf of the power union.

“The government will proceed with the privatization of the power companies as planned since the government and the KCTU agreed to exclude privatization from the agenda of future negotiations,” said energy minister Shin Kook-Hwan.

Workers agreed to suspend their anti-privatization campaign and the management agreed to be lenient in punishing strike leaders, many of whom have already been dismissed.

Privatization of the power distribution sector is likely to be delayed, however, with the sell-off scheduled for March 2004, one year later than originally envisaged.

Three shortlisted for Australia’s power, gas project

The Queensland government said it had shortlisted three bidders for the Townsville gas supply and power generation project, a potential key market for the $3.5bn Papua New Guinea to Australia pipeline.

State Treasurer, Terry Mackenroth, said the shortlisted proponents are the Australian Gas Light Co bidding with Queensland state-owned generator Stanwell Corp., Queensland state-owned Enertrade, and Origin Energy. Makenroth said the bids involved a range of competing gas supplies to Townsville including coal seam methane and PNG gas.

The shortlist was selected from a field of 18 bids lodged by ten consortia, with a decision on the successful proponent due by the end of June.

Japan funds Sri Lanka project

Japan granted a soft loan of ¥33 265m ($297m) for the upper Kotmale Hydropower Project.

The project will add 150 MW to the country’s power grid. The total project cost of is $380m, with a local component of $83m. The Japanese component of the funds will be released by the Japan Bank for International Cooperation. The loan is repayable in 40 years inclusive of a grace period of ten years.

News digest

Australia: Nexans has been awarded a contract for the supply of 4720 m of 6.35/11 kV 3-core copper conductor, steel wire armoured submarine energy cables to Daydream Island in Australia. The installation of the cable will provide Daydream Island with a dedicated power supply that will meet the current and future requirements of the five star resort.

India: India said it plans to produce 6000 MW of electricity from private investment in wind power in the next ten years with the help of a new electricity law. India is already the fifth largest wind power producer in the world, with over 1500 MW of capacity.

India: The Ranchi-based consultancy major Mecon has been engaged by the Bihar State Hydroelectric Power Corporation for turnkey execution of small hydro power station at Tejpura in Aurangabad district. To be set up at a cost of Rs60m ($1.2m), the power station will have two units of 75 MW capacity each.

India: BHEL has agreed to take 20 per cent stake in the company that would be set up by Karnataka Power Corporation Ltd for implementing a 500 MW thermal power project near Bellary. BHEL would be investing around $18.4m in the company.

India: National Thermal Power Corporation plans to enter the capital markets with a public issue. The objective is to raise resources to meet its targeted capacity addition of 20 000 MW over the next ten years.

Pakistan: Pakistan invited bids for a 51 to 74 per cent stake and management control of loss making state-utility Karachi Electric Supply Corporation. Karachi-listed KESC, which has a market capitalization of $3.8bn with most of the stock being held by state-run financial institutions, is facing losses due to high electricity theft and line losses of 15-16 per cent.

Philippines: The Asian Development Bank has urged the Philippine government to implement crucial transmission and sub-transmission line development projects to prevent another power crisis.

Philippines: The Power Assets and Liabilities Management Corp. said the Ilijan natural gas combined cycle power plant will start commercial operations in June this year, six months behind schedule. Keilco owns the plant.

Vietnam: State-owned commercial banks have teamed up to provide Electricity of Viet Nam with a loan of $140m for the construction of the Se San 3 Hydroelectric Plant in the Tay Nguyen province of Gia Lai.