Korea concludes privatization plans

The Korea Electric Power Company (Kepco) has concluded a plan to spin off its power generation unit into six affiliates in November. The affiliates will be sold off by the end of the year.

The decision was based on a study by Andersen Consulting, and through consultations with the Commerce, Industry and Energy Ministry.

Kepco’s move will free-up the power generation industry to any firm looking to set up a generating plant in Korea from next year.

Under the plan to split the power generation unit, 42 thermal and hydropower plants under construction or in operation will be merged into five separate affiliates, with the nuclear ones merged into a separate firm. Nuclear power plants will be managed under four different operating units to upgrade competitiveness, although they will stay under the same affiliate company.

Singapore Power invests overseas

Singapore Power through its subsidiary, Singapore Power International (SPI) has made acquisitions in Taiwan and China.

In Taiwan SPI has acquired a 25 per cent stake in independent power producer, EverPower, for $207m. Marubeni Corp. also holds a 24.7 per cent stake in the company.

EverPower owns and operates natural gas fired combined cycle plant located in Tao Yuan County in Northern Taiwan. The 960 MW plant will begin commercial operation in the first quarter of 2000. When commissioned, it will be the first IPP involving sovereign participation.

Meanwhile in China, SPI has agreed to buy Asia Pulp & Paper’s (APP) China cogeneration plants. The purchase of the three plants will mean SPI has investment interests in 16 generation facilities with a gross capacity of 2653 MW. SPI’s net interest in these generating assets is 774 MW.

This latest investment is SP’s biggest overseas investment to-date. SPI has been active in China since 1996. Since then it has invested more than $380m in the Chinese market, making it one of the largest foreign investors in this market.

Enron withdraws from India

Enron has pulled out of two projects in India. Enron India and Wescopower Generation have ended their alliance in the Indian market. Wescopower had proposed constructing a 500 MW LNG-fired power plant at Belgaum but it is understood that Enron had reservations over the LNG supply.

Wescopower may now lose the project because it had initially opted for naphtha and later changed to LNG “based on Enron’s commitment”. It appears unlikely that the government will allow any further change in fuel for the project. It is unclear why Enron has withdrawn from the project.

Enron’s decision follows its withdrawal from the Kerala power project. Enron Corp. and its Indian partner are terminating their agreement to develop the 513 MW power project in the southern state of Kerala. Enron said that the project was not progressing quickly enough which adversely impacted the economics of the deal. Since construction of the project had not begun, Enron’s investment “had been minimal”.

Three Gorges contracts

ABB and Siemens have been awarded contracts for high voltage equipment for the Three Gorges hydropower project in China. The equipment includes 15 main transformers and 39 high voltage switching systems, worth a total of $205.6m.

ABB’s part of this was worth $112m for the delivery of switchgear. Under the terms of contract, ABB will deliver 500 kV gas insulated switchgear (GIS) for a substation at the dam site. The contract is the third that ABB has won for the massive infrastructure project. In August 1997 the company won a $250m order to deliver eight 700 MW hydro generators to the project. In April of this year ABB won another order to provide two converter stations for a 3000 MW link between Three Gorges and the coastal province of Jiangsu and Shanghai area.

The two companies will start supplying the facilities in 2002 and put them into operation between 2003 and 2006.

Taiwan orders 600 MW power plant

GE Power systems has received contracts totalling more than $280m to supply equipment and services, including a long term operation and maintenance contract for a new 600 MW combined cycle plant in Taiwan.

The new power plant will be located south of Taipei, in Kuanshi Rural Township, Hsinchu County. The plant will be owned by Hsin Tao Power Corporation and power will be sold to Taiwan Power Company.

GE will supply three MS7001FA gas turbines, one steam turbine-generator and three heat recovery steam generators. These will be the first 7FAs sold into Taiwan. It will also be GE’s first O&M contract there.

A consortium including GE and Bechtel will design and build the facility, with plant commissioning scheduled for the third quarter of 2001. The plant will operate in daily peaking duty for 4000 h per year with 300 starts.

News digest

Australia: Babcock & Wilcox (B & W) has been awarded a $95m contract by Bechtel International for two supercritical pulverized coal fired boilers for the 800 MW Millmerran merchant power station in Queensland, Australia.

Australia: US-based Entergy Corp. said it was withdrawing from Australia and pulled out of the A$1bn ($0.67bn) plus joint venture to expand the Tarong power project in Queensland state. The company decided that the investment was not justified and that it would concentrate its efforts on Europe and the US

Australia: Stewart& Stevenson Energy Products is to supply two LM600 Sprint aeroderivative gas turbines to the Australian Northern Territories Power and Water Authority. These are the first LM6000s to be sold to an Australian utility. The units will be used for intermediate to baseload service.

China: Unit 1 of Laibin B, China’s first build, own, operate and transfer power project, has been synchronized to the grid. The 2 x 360 MW power plant built by ABB Alstom Power and EDF has begun operation after just 24 months from the beginning of work.

India: US developer AES is to pay $10m for 52 per cent equity in the Central Electricity Supply Company of Orissa. This represents AES’s first acquisition of a distribution company in India.

Korea: Sithe Asia Holdings Ltd., a unit of France’s Vivendi SA has paid Won198bn ($166m) for a 250 MW cogeneration plant from Hyundai Electronics Industries Co. The plant supplies power and heat to the company’s semiconductor manufacturing plant.

Malaysia: Hong Kong utility CLP Holdings has bought a five per cent stake in YTL Corporation of Malaysia for about $102m. The deal is expected to give CLP access to the planned ASEAN power grid. CLP will develop power generation business in Malaysia and the group’s managing director, Ken Oberg said the investment will establish the group as a major player in the region’s power market.

Pakistan: US developer AES is to take over National Power’s share in the Hub Power Company (Hubco). The share is worth more than $175m and the deal is expected to pave the way for resolution of the two and a half year dispute between the government and Hubco. An industry analyst said that if AES buys controlling shares in Hubco there is a possibility that, being an American company, it could use the influence of the World Bank and the International Monetary Fund to resolve the