Indian power and fuel companies diversify
Two Indian coal companies have decided to enter the power generation business.
Coal India Ltd is to act jointly with Nyveli Lignite Corp to provide power as well as fuel. The companies’ first project will be a 2000MW thermal plant to be set up at the pithead of one of the mines located in Orissa, in an area known as the Mahanadi coalfields.
Coal India also said it was planning to enter coal gasification and coal-bed methane projects, this time in co-operation with the Oil and Natural Gas Corp. The first stage would be to set up a joint venture for a gasification project.
Meanwhile, the National Thermal Power Corporation, faced with a looming coal shortage, has announced plans to open up to 16 new coal mines and set up adjacent power projects. The company, which currently uses 100 million tonnes of coal annually, mostly from Coal India, hopes the change will help avoid quality and transport issues. NTPC has also announced a plan to invest in 5000MW of new hydro capacity during the next few years.
Philippines meets energy crunch with cuts and power saving
The Philippines Department of Energy plans to add time-of-use pricing to a cut down working week to try to conserve energy and avert power cuts during the summer months.
The Philippines has been put under pressure by rising oil prices and has taken drastic measures to maintain power supplies. Energy Secretary Raphael Lotilla said energy conservation should be a national movement.
The four-day workweek is expected to save the government $2.6 million over the next two months. Meanwhile, energy conservation measures in government organizations have resulted in dramatic savings. Limiting air conditioner use, improving elevator efficiency and similar measures were said to have reduced power consumption by around a quarter at the Department of Energy and by 19 per cent at the National Oil Company.
In the longer term time-of-use pricing is expected to reduce peak loads by convincing companies to shift schedules. The Philippines DoE had projected that by 2008 the country would not have sufficient peak generating capacity.
EGAT looks to overseas deals
The Electricity Generating Authority of Thailand will be transformed into the country’s overseas energy investment arm shortly after it is privatized, according to a company spokesman.
He said the privatization would allow the utility to embark on several profitable activities, as it would no longer be bound by a 1992 law that dictates it can only operate within Thailand. Subsidiaries Electricity Generating Plc and Ratchaburi Electricity Generating Holding Co will focus on the domestic market.
The Authority was due to be turned into a public company on 1 May, although that date was thought likely to slip, and a public share offering will follow. The offering is very attractive for investors, who have complained in the past about the limited availability of big-capitalized stocks on the country’s exchange.
October deadline for Philippines bids
Following several delays, the Philippines government has set October as a new working target for privatization of the National Transmission Corporation. Energy Secretary Raphael Lotilla said the country was committed to “bid out the Transco concession this year”.
The Energy Department also aims to sell 70 per cent of the National Power Corporation’s electricity generating assets by the end of the year. That would entail disposing of around 3000 MW.
The Transco sell-off will be completed in two stages. In the first a sub-contractor would operate and maintain the Transco assets, expected to be for a 25-year period. In the second, the assets would be delegated. The privatization is expected to bring in up to $2bn.
Talks back on over Dabhol
Indian financial institutions with a stake of up to Rs50 bn ($1.16bn) in Dabhol Power Company are in talks with GE and Bechtel to take over their 85 per cent equity in the project. The talks follow the Indian government’s approval of a guarantee to domestic financial institutions in a new attempt to settle the dispute over the 2184MW project.
The approval will allow local financial institutions to raise about $460 million to settle various claims, including that of the Overseas Private Insurance Corp and other lenders.
The project was set up in two phases, a 740MW unit initially fuelled with naphtha and ultimately switched to LNG, and a 1444MW unit based on LNG from the outset. The project has been lying idle for more than three years while domestic lenders struggle to revive it with GE and Bechtel.
India’s Tata Group is completing a pre-feasibility study on plans to invest $2bn in Bangladesh. The investment would include a steel mill and fertilizer factory as well as a 100MW power plant, which is likely to be coal-fired and may also have a merchant component.
Foreign companies are likely to be able to take a stake in Chinese power projects in the next two years, according to local press speculation. Chinese regulations had limited overseas stakes, but the investment will be required to improve efficiency and environmental performance to meet new requirements.
A 1000MW wind farm is to be built in Shangyi County, Hebei Province, according to local reports. The project will be built in stages to 2020 at a cost of yuan 9bn ($1.1bn).
Taking advantage of underutilized capacity, including that at captive power plants, could add up to 5000 MW to the Indian grid, according to power secretary R V Shahi. A refurbishment programme over the next six months aims to bring that on line, he said.
Areva has made a €14.5m offer to buy Alstom’s Indian T&D business. The offer closes on 18 June.
The Maharashtra government has signed an MoU with eight companies to invest in 12500 MW of new generation in the next five years. They are Reliance industries, Tata Power, Essar Power, CIPCO Power, GMR, Ispat and Spectrum.
China and Pakistan have jointly launched a project to build Pakistan’s third nuclear power station. The 325MW PWR, due for completion in 2011 at a cost of Rs51bn ($870m) will be largely supplied by China and will be sited at Chasma, where a Chinese reactor is already in operation.
The Ceylon Electricity Board is to restructure debt and build new coal-fired stations to recover a Rs86bn ($860m) deficit. The electricity company has been losing Rs40m daily since switching to thermal generation because of low hydro levels.
Chinese and Indian companies are competing to build a 300MW power plant in Sri Lanka. A bid from India’s National Thermal Power Corporation was well received but China was said to have offered a lower bid.
Hydro is the highest-potential renewable fuel in Thailand for this year, according to GE Energy CEO John Rice. He said wind would be second, and the company planned to launch low-speed wind turbines for the region in the next 12-18 months.