Around the Globe Asia-Pacific

PowerGrid expanding India’s network

India’s PowerGrid Corporation has awarded a contract to Siemens Power Transmission and Distribution Group for the supply of converter stations for a 1400 km-long HVDC transmission link across the states of Orissa, Andhra Pradesh and Karnataka.

The planned East-South link will transmit 2000 MW of power from power plants near Talcher in the state of Orissa to the fast-growing industrial areas around Bangalore in Karnataka state. The project is being funded by PowerGrid, KfW Bank of Germany as well as by domestic borrowings.

Siemens India will carry out the design, engineering and construction of the 400 kW switchyards in Orissa and Karnataka, while Siemens AG will supply a major portion of the HVDC equipment.

Sri Lanka power crisis

The Ceylon Electricity Board (CEB) has said that Sri Lanka is facing severe power shortages due to low reservoir water levels in spite of recent heavy rainfalls. However, the addition of thermal power capacity to the grid in recent years should help prevent power cuts like those experienced in previous years.

The Sri Lankan government has been pursuing a policy of increasing thermal capacity in the country in order to reduce dependence on hydropower plant. A number of diesel-based plants have been developed, the most recent of which is a 60 MW barge-mounted plant owned and operated by Colombo Power (Private) Ltd., a joint venture of Japan’s Mitsui Engineering and Shipbuilding Co. and Kawasho Corp.

While such diesel plants will help to stave off power cuts, CEB says that their use is forcing it to subsidize its customers and will affect the company’s financial performance. The company is keen to develop coal-based capacity to reduce its exposure to high oil prices, but a proposed 300 MW coal-fired plant at Norochcholai is facing local opposition.

Sri Lanka has an installed capacity of 1675 MW, of which 1135 MW is hydropower and 540 MW diesel.

Japan Internet exchange plans

Japan’s Itochu Corp. and Automated Power Exchange of the USA are planning to take advantage Japan’s deregulating power industry and launch an Internet-based electricity trading exchange in November 2000. The establishment of an open access market will help to lower domestic retail electricity prices, according to Itochu.

Itochu and Automated Power Exchange will form a joint venture company for the project with start-up capital of à‚¥1.5bn. Automated Power Exchange will own a 30 per cent stake in the venture and Itochu up to 25 per cent. Itochu is also planning to buy a stake in Automated Power Exchange worth $5m.

The new exchange will provide market participants with full information about prices, amounts for sale and supply schedules offered by suppliers, as well as open access for remote customers. Itochu and Automated Power Exchange expect other energy concerns and participating Japanese power and gas utilities to finance the remainder of the venture.

Reliance, CEPA sign power pact

Reliance Power Ltd. and Southern Energy Asia-Pacific Ltd., formerly Consolidated Electric Power Asia (CEPA), have signed an agreement to jointly develop a 3960 MW coal fired power project at Hirma, Orissa state. The first of six 660 MW units at the plant will achieve commercial operation within six months of financial closure.

The two companies will each hold a 50 per cent stake in the project. They are currently negotiating a power purchase agreement with Power Trading Corp., and a fuel supply agreement with Mahanadi Coal Fields. The plant will supply power to Gujurat, Madhya Pradesh, Punjab, Rajastan and Haryana.

Coal mines in the Ib Valley will provide over 19m t of fuel for the plant. India has included Hirma in its ‘Mega Power Policy’, allowing a customs duty waiver for the project.

SP launches $300m bond

Singapore Power (SP) has launched a $300m bond issue, the first ever benchmark US Dollar bond issued by a Singapore corporate. The state-owned utility will use the programme to fund overseas investments as well as for general funding purposes.

The five-year bond issue has been assigned an AAA rating by Standards & Poor’s, reflecting SP’s strong financial profile and its position as the dominant power generator and sole transmitter and distributor of power in Singapore. SP possesses equity in various power projects in the region, including Taiwan, Philippines, Korea, China and Indonesia.

The bond attracted strong interest, according to SP. “The bonds were distributed to a broad range of domestic and international investors who were keen to gain exposure to a rare AAA Asian borrower,” said SP President and CEO BG (NS) Boey Tak Hap.

News digest

Asean: Talks have resumed between Tenaga Nasional (TNB) of Malaysia and PLN of Indonesia on the interconnection of the two countries’ power grids as part of the development of an Asean power grid. TNB said that it hopes to be able to import power supplies from coal fired plants in southern Sumatra by means of a subsea link.

China: Construction on China’s first solely foreign-funded hydropower station will begin soon. The Zhiganglaka station on the upper reaches of the Yellow River will cost about 1.3 billion yuan ($158m) and have an installed generating capacity of 192 MW.

India: Foster Wheeler of the USA has won a contract that will result in the introduction of a new technology for the use of coal washery rejects as a fuel source in circulating fluidized bed (CFB) boilers. The company will undertake a feasibility study, with the help of a US Trade and Development Agency grant, to prove the economic and environmental benefits of using coal washery rejects as an opportunity fuel in India, where high-ash coal requires washing before use.

Malaysia: A consortium comprising Malakoff Bhd and the UK’s National Power plc has won the bid for a 40 per cent stake in a special purpose vehicle that will acquire a 2420 MW coal-fired power plant in Kapar, Selangor state, from national utility TNB. The consortium paid $657.9m for the stake.

Malaysia: BP Solar Sdn Bhd has launched Malaysia’s first solar panel manufacturing plant at Shah Alam in a bid to develop the solar business in the country. The 1200 m2 facility is capable of manufacturing around 5 MW of solar cells per year.

Philippines: The Lower House of Congress has approved the Omnibus Power Industry Restructuring Bill, paving the way for the privatization of the cash-strapped state power firm, Napocor. Under the bill, the entire national power grid will be broken up into seven power generation companies which will be sold to the private sector through public bidding. Napocor is saddled with around Peso200bn of debts, part of which will be recovered through a levy on electricity tariffs.

Thailand: Marubeni Corp. and TotalFina SA have announced plans to construct a $250m project to build a natural gas fired power plant in Samut Prakan, near Bangkok. The 350 MW plant will start selling power to Thailand’s Egat in July 2002. Marubeni and TotalFina will each own 28 per cent of the venture, while local utility GMS Power will hold a 32 per cent stake. The remaining stake will be owned by a Taiwanese bank.

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