New Zealand regulator steps in to smooth the way

New Zealand Electricity Commissioner Roy Hemmingway will become the first regulator of the country’s deregulated oil and gas industry, now that the Electricity and Gas Industries Bill has become law.

When the electricity industry in New Zealand was unbundled and privatized it was regulated through the existing consumer law, with no dedicated regulatory body. But the path of the deregulated industry has been far from smooth: mergers and acquisitions among the new companies coincided with several years of low rainfall: the result, in New Zealand’s hydro-reliant system, was winter power shortages and appeals to save energy, leading to widespread public concern. Power producers were accused of fixing the market, although a government enquiry pronounced the accusations unfounded.

An attempt to set up a system of self-regulation by the power companies failed in 2003 and the government’s response was to install the Electricity Commissioner. Now the Commissioner’s role will be transformed. The law sets up a “co-regulation” regime for the gas and electricity industries, which will encompass security of supply, consumer protection, competition, demand management, and distributed generation.

Solar-hydro project launched

Mindanao, in the Philippines is to be the site of a unique solar- hydro tandem project backed by the International Finance Corp, the investment arm of the World Bank, and local utility Cagayan de Oro Electric Power & Light Co (Cepalco).

The project comprises a 950 kW grid-connected solar array, covering an area of 2 hectares, and a 7 MW hydro power plant known as Bubunawan.

Cepalco chairman and CEO Ramon Abaya said the solar array would be the largest in Southeast Asia, and said it “will allow Cepalco to use the solar PV power for daytime peak demand and maximise the use of hydro power from Bubunawan”.

The cost of the PV array will be $5.4m.

GE hydro wins in China

GE Energy is to supply four turbine generator sets for the Xi Xia Yuan hydro power plant, under construction on the Yellow River in China’s Henan Province, in a contract worth $35m.

The hydro plant, owned and operated by Yellow River Water & Hydropower Development Corporation, will have a total installed capacity of 144 MW, generated from four GE- designed and supplied Kaplan turbines. GE will also design, manufacture and supply four sets of governors, four 35 MW vertical generators, and four sets of excitation systems and unit automation systems. The equipment will be manufactured in GE Hydro Asia’s facility in Hangzhou City, Zhejiang.

The plant will provide 70 MW of electricity to the regional grid when it starts up in 2006.

New plant for Melbourne

Australian electricity supplier Origin Energy has announced plans for a gas fired power station to be built in western Victoria at a cost of A$1bn ($723m). If approved, work would begin on the 1000 MW station in two years, with construction taking a further two years.

The power station would add 12 per cent to the state’s generating capacity and would be fuelled by gas from a recently discovered field, known as the Otway Basin, off Victoria’s southwest coast.

A 78 km pipeline will deliver the gas to the site.

Victoria currently relies very heavily on brown coal for its power, because of its easy availability in the state. Over 6000 MW of its total of around 8000 MW capacity is coal fired.

Gas shortages halt proposed Pakistan projects

Pakistan has rejected six fast track power plant proposals from foreign and local investors, including two from the US, citing lack of gas availability. All six projects were in the Karachi area.

The decision comes at a time when the Karachi Electric Supply Corporation (KESC) faces a shortfall, estimated at 60 MW this year but likely to rise to 1300 MW by fiscal year 2010.

A senior government official said that in view of looming gas shortages, the government had decided on a major policy shift, rejecting proposals for gas fired stations at green field sites and putting in place a revised gas allocation plan.

Other government sources said two of the power projects that had been shelved because of the policy shift were Hawks Bay (600 MW) and Gadani (300 MW), developed by Sui Southern Gas Company and KESC, both offered to private sector applicants by the Ministry of Water & Power last year.

News digest

China rise: Electricity consumption in China will rise by 14.6 per cent in 2004, compared to 2003, according to a forecast from the China Electric Power Enterprises Federation and the Guodian Power Economy Research Centre.

China: Zhang Ghuobao, China’s vice minster at the State Development and Reform Commission, said China would prioritise hydropower development. Another minister noted China’s hydro development stood at 24 per cent of potential, compared to more than 60 per cent elsewhere.

India: Bharat Heavy Electricals is to construct a 1000 MW coal fired plant in Chhattisgarh. The four 250 MW units will be commissioned in two phases, the first in late 2007.

India: India’s LNJ Bhilwara Group is to partner with Statkraft Norfund on hydro projects in India. The 192 MW Allain Duhangan project in Himachal Pradesh may be the first joint project.

Indonesia: The Indonesian government has granted a licence for a 219 MW hydro power plant in north Sumatra. The $250 million plant should start up in 2008.

Indonesia: The Asian Development Bank has offered financial support to build a transmission line from Sarawak to Kalimantan. The 150 kV line would transport power from Sarawak hydro plants.

Indonesia: Three new gas fired power stations are to be built in South Sumatra, Indonesia. The largest, Borang, will provide 100 MW using gas from the Borang field. Two more plants will use gas from other fields to generate some 50 MW jointly.

Pakistan: Pakistan is to reduce the term of agreements for new oil and gas based power projects to 15 to 20 years, compared to the current 25 to 30 years. Hydro projects would remain at 25 to 35 years.

Philippines: Data from the Philippines Department of Energy (DOE) has shown that the country needs to invest around PHP359bn ($6.3bn) in power generation projects until 2014.

Taiwan: Taiwan Power Co. will invest more than NT$10bn ($299m) in developing wind power generation in the next 10 years. Under the plan, Taipower will install at least 200 wind power generators with a total installed capacity of 300 000 kW. The first generators will be set up in the coastal regions of the western part of the island.

Vietnam: Vietnam Coal Corp. plans to build a power plant in Quang Nam Province next year. The 30 MW power plant near Nong Son coal mine in Que Son District will cost VND600bn ($38m) and will be completed in 2007.