Singapore privatization to kick off next year

Delays in establishing new wholesale market rules have pushed back the auction of Singapore’s generating assets. “The new market rules are to be implemented in November and they will want to operate for one or two months to make sure everything works,” said a source at one of the companies planning to bid on the assets. “The sale will probably start in January or so,” he said.

The official target date to begin the auction of the generators was the fourth quarter of this year, according to Temasek Holdings Pte Ltd., the holding company for Senoko Power Ltd., PowerSeraya Ltd. and Tuas Power Ltd.

Analysts estimate the sale could generate $3-4bn for the government. A number of investors have already expressed an interest in the assets. US power and gas company, Mirant said it plans to to bid on the assets and may bid together with another international investor. “Our intention is to bid for and acquire one of the three generators that will be up for sale starting in the beginning of 2002. Metcalfe said the companies have a combined book value of $2.5bn. Metcalfe said he expected bidding for the first company to begin in April 2002.

Meanwhile in August, US-based NRG said it was to set up a Singapore office and planned to consider bidding on the assets. NRG Asia-Pacific managing director, Keith Hilless said: “It is an attractive market and if we managed to get hold of one of their generators, we would have effectively deployed our core market strategy.”

Australia reviews grid link problems

A review of transmission grid links in Australia’s eastern states National Electricity Market (NEM) has suggested a new national body should oversee network planning. The NEM was formed as a national market but limited power links between the states has led to criticism that it operates as separate regional markets.

The National Electricity Market Management Co. (NEMMCO) working committee report said a range of steps could improve interconnection, including improving national network planning.

“The absence of a nationally focussed and coordinated network planning process is perceived as a major reason why so few interconnector proposals have been put forward or progressed since commencement of the NEM,” the report said.

The NEM started in 1998 based on regions covering the states of South Australia, New South Wales and Queensland plus a separate region centred on the Snowy Mountain.

NZ starts secondary power market

New Zealand has begun operating a secondary electricity market to allow medium to large power users with fixed-term supply contracts to auction power they do not need to other similar sized users.

The new market should lead to lower wholesale power prices and cut consumption, although the actual impact would hinge on demand for the market. In July power prices peaked at more than NZ$330/MWh ($137/MWh).

State-owned Transpower would be the first to auction power through the market. The company would want a higher price than that paid for the power but lower than the spot price. Energy minister Pete Hodgson said: “They have decided to forego some of their electricity use, expose themselves to the spot market, back themselves to not need the spot market by way of their own energy management, and put the savings up for auction.”

Tepco orders Asia’s first H-system

GE Power Systems has signed an agreement with Tokyo Electric Power Company (Tepco) to design and build the first power plant in Asia to use GE’s most advanced combined cycle gas turbine technology, the H-system.

GE will supply three 109H combined cycle systems for the Futtsu thermal power station group No. 4 project, with each system including an MS9001H gas turbine, a steam turbine and generator.

Shipment of the equipment is scheduled to begin in April 2006 with the first unit expected to begin commercial operation in mid-2008. All three units will be in service by 2010.

Enron warns of possible sanctions after Dabhol

US energy company Enron has said that India could face new US sanctions unless the company and its partners get back the full $1bn in costs for building the Dabhol power project.

Enron’s chairman, Kenneth Lay said: “There are US laws that could prevent the US government from providing any aid or assistance or other things to India going forward if, in fact, they expropriate property of US companies.”

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