Malaysia places plant orders

Two Malaysian independent power producers (IPPs) have placed orders with European equipment manufacturers for combined cycle plants with a combined capacity of 2070 MW.

In November Alstom announced that it has been awarded a turnkey contract worth over $367m (a340m) for a 650 MW plant to be installed at the Lumut power plant in Perak state. Siemens KWU also announced that it has received two major orders for combined cycle power plants worth a total of DM1.8bn (a900m).

Alstom’s order was placed by GB3 Sdn Bhd, a subsidiary of Malakoff Berhad, Malaysia’s largest IPP. The combined cycle unit will be the third combined cycle block at Lumut, making it the largest independent natural gas-fired combined cycle facility in South-East Asia. Alstom will supply three 165 MW GT13E2 gas turbines, one steam turbine, three heat recovery boilers and associated systems.

Siemens will construct two 710 MW power plants – one in Teluk Gong for Powertek Sdn Bhd and one in Sepang for Malaysian Resources Corp. Bhd.

Taiwan scraps fourth nuclear power plant

Taiwan Premier Chang Chun-hsiung has ordered a halt to construction on the country’s fourth nuclear power plant. The move has sparked a political and constitutional conflict between the new ruling party and its opposition.

Chang said that the $5.4bn project was being abandoned because it would be too difficult to dispose of the waste. He also claimed that Taiwan is not equipped to handle any serious incidents that might occur, and pointed out that the country’s three existing nuclear power plants have so far seen 82 incidents.

Chang’s opponents and supporters of the project have called for a united effort to save the plant, which they say is essential for meeting rising energy demand on the densely populated island.

Paiton nears power tariff agreement

Independent power producer (IPP) PT Paiton Energy and Indonesia’s state-owned power company PT PLN have agreed on a long-term solution to help settle their dispute over power tariffs. The three-phase agreement, which requires government approval, will be implemented when final tariff negotiations are complete.

Paiton president Ronald Landry said that both companies had agreed on the three-phase solution, but they were still negotiating the exact tariff to be paid by PLN for Paiton’s power. “We hope to reach an agreement on phase one before the end of this year and we’re very optimistic that we will,” said Landry.

Paiton is one of 27 IPPs that signed power purchase agreements (PPAs) with PLN during the 1990s. The dispute over the tariffs arose when the economic crisis struck, rendering PLN unable to pay for the power as contracted under the PPAs. The government eventually demanded a renegotiation of the contract to lower the tariff.

In the first phase of the new agreement, there will be a gradual hike in the tariff from $0.026/kWh, the current level set by the government, with futher increases to follow.

16 projects to reach financial close in India

The Indian government has given its approval for the financial closure of 16 power projects within the current financial year. The announcement is a major boost for investors in the country as well as for India’s electricity supply industry.

During a meeting of the Crisis Resolution Group in November, Power Minister Suresh Prabhu said that seven projects with a total capacity of 2814 MW would reach financial close by December 31, 2000, while another nine would be tied up by March 31, 2001.

The total investment of the 16 projects is expected to be around Rs280bn ($6.22bn). Financial institutions and developers have agreed to fund the projects without insisting on escrow cover by using an alternative security mechanism.

The projects are mainly located in states that have decided to implement power industry restructuring and reforms.

Six bid for Mindanao-Leyte project

Six foreign companies have tendered bids for consultancy services for the $450m Leyte-Mindanao interconnection project in the Philippines. The project is the largest transmission linkup undertaken by the state-owned National Power Corporation (Napocor).

The Asian Development Bank (ADB) is the primary lender to the project, which will link the grids of the two islands.

Companies that have tendered bids are: Canada’s Hydro-Quebec, Lahmayer International of Germany, Japan’s Electric Power Development Company, Black & Veatch – USA, Swede Power of Sweden and Norway’s Norconsult International.

The bids are now being reviewed by Napocor. The utility has already tapped eight banks as lead arrangers for a syndicated loan of between $310m and $430m for the project.