News digest

Australia: Trustpower, the Tauranga-based power company, has received planning permission to build a new wind farm near Adelaide, South Australia. The wind farm will have an output of 32 MW, generated from 20 turbines.

Bangladesh: AES Corp. announced that it has completed sale of 100 per cent of its ownership in two generation businesses in Bangladesh – AES Haripur, a 360 MW gas fired combined cycle power project and AES Meghnaghat, a 450 MW gas fired combined cycle power project – in a transaction valued at $448m.

China: Huaneng Power International said the State Council, China’s cabinet, has approved its feasibility study on the construction of two 1000 MW coal-fired units in Zheijiang province.

China: PetroChina Fuel Oil Co., has started construction of a ¥4.1bn ($38.5m) power plant that will use Orimulsion as its fuel. The power plant, being built in Zhanjiang city in Guangdong province, will have two power generators each with a capacity of 600 MW.

China: The Chinese government plans to invest a record ¥18.85bn ($2.27bn) in the construction of the East China Power Grid in 2004 to relieve power shortages in the eastern region.

Philippines: State owned PNOC Energy Development Corp. has signed contracts with Japan’s Kanematsu Corp. for geothermal projects totalling peso5.6bn ($101.2m). Kanematsu has been contracted to build a 40 MW power plant near Mount Kanalon in central Philippines and a 26 MW plant in Negros Oriental province.

South Korea: South Korea has delayed a planned $300m initial public offering of a unit of Korea Electric Power Corp. until June from February because of unfavourable market conditions. Seoul plans to sell five thermal power generating units at state-controlled Kepco.

South Korea: BP and SK Corp. reached agreement for BP to participate in a new 1074 MW gas fired power station in South Korea, due to commence operation in 2006.

Thailand: The board of Electricity Generating Authority of Thailand has approved a power development plan for 2004 – 2015 that shows the country will need 1265 MW more power capacity than previously projected to meet growing electricity demand.

Thailand: The cabinet has endorsed the new structure for the country’s electricity sector, which requires separate financial accounts for the generation and transmission systems of the Electricity Generating Authority of Thailand.

Huaneng buys OzGen stake

China’s state-owned Huaneng Power Group has tapped the Australian electric power market for the first time with the acquisition of two InterGen-owned power plants worth a total of $227m.

Huaneng has purchased a 50 per cent stake in OzGen, a wholly owned subsidiary of US-based InterGen, which owns the Millmerran and Callide C power plants in Queensland. The assets have a combined generating capacity of 1800 MW. OzGen holds a majority 54 per cent stake in the Millmerran power plant and 50 per cent in the Callide C plant.

Analysts believe that Huaneng wanted to buy the power plants so that it could gain experience of operating assets in a deregulated power market. China is currently in the process of restructuring and deregulating its power market.

  • Australian Gas Light Co., has been given the go-ahead to bid for a 35 per cent share in the 2000 MW Loy Yang A power plant in Australia. Australia’s largest electricity retailer waited for court rulings to permit the $2.6bn acquisition from CMS and NRG Energy, Xcel Energy and Horizon Energy Investment Group.

Singapore launches vesting contracts

Singapore’s Energy Market Authority (EMA) is to introduce vesting contracts into Singapore’s electricity market in a bid to control the market power of the main generating companies.

The aim is to halt companies withholding power supplies from the market and thus increasing prices. The contracts will impose a contractual obligation on the main gencos – Senoko Power, PowerSeraya and Tuas Power, which control 90 per cent of the market – to produce a specified quantity of electricity.

EMA said that under the contracts, 65 per cent of demand will be met at prices that are set on a quarterly basis, while 35 per cent of demand will open to price competition.

Tohoku drops new nuclear power project

Japan’s Tohoku Electric Power Co. has been defeated by local residents opposing its plan to build a nuclear power plant in Maki City.

The residents had brought a civil suit against the city’s mayor and 23 opposing residents after the mayor sold city-owned land, which was to be part of the planned nuclear plant site, to opposition residents in 1999. The cancellation of the plan is another setback for the nation’s beleagured nuclear power sector.

The Japanese company had spent ¥30.5bn ($284m) over 30 years to acquire 96 per cent of the land and compensate a fisherman’s union.

Japan depends on nuclear power for 35 per cent of its needs. The latest data from Japan’s Federation of Electric Power Companies showed that electricity output by Japan’s ten major power utilities fell for the fifteenth straight month in November 2003.

Wärtsilä contracted for 100 MW plant

Wärtsilä has been awarded a $64.5m contract to supply Indonesia’s PT Aneka Tambang (Antam) with a 102 MW diesel power plant.

The power plant is being installed as part of a major expansion project at a ferronickel smelting plant. It will consist of six 17 MW gensets each powered by a 18V46 diesel engine. It will initially run on heavy fuel oil and may be converted to natural gas. The plant will be commissioned by mid-2005.

Wärtsilä will also construct a 30 MW plant for a Bangladesh cement factory, owned by Lafarge Surma Cement.

China boosts nuclear capacity

China will boost its nuclear capacity with the construction of a 6 GW power plant in Yangjiang. Work on the plant will start in 2006.

Guandong Nuclear Power Co., will construct and manage the $8bn project. The six units will be on line within 15 to 20 years, with the first units scheduled for operation in 2010.

Guangdong Nuclear Power is also planning to build a second nuclear power plant at Daya Bay, while China National Nuclear Corp is planning to construct two new nuclear plants.

Philippines signs three deals

The Philippines and Japan have signed three power deals relating to the construction of a 210 MW coal fired plant in Mindanao, the establishment of wholesale electricity spot market and the development of the Leyte-Cebu interconnection project.

The coal plant, a $355m project, will use clean coal technology to supply the Mindanao province with much needed power. The project developers consist of Germany’s Steag, Philippines National Power Corporation and SITI (a partnership that consists of Steag and State Investment Trust). Commencement of commercial operation is due for 2006.

The state’s Leyte-Cebu interconnection project will allow 200 MW of power to be exchanged between Cebu and Leyte via a 33 km submarine cable, and also involves the expansion of several substations.