ABB capital increase: ABB has announced that more than 99 per cent of subscription rights were exercised in its $2.5bn capital increase. Together with a recent g650m bond and a new $1bn credit facility, the capital increase will help to ensure a strong capital base for future long-term growth.
AEP service contract: American Electric Power has awarded a $165m, six-year service agreement covering gas and steam turbines throughout the USA to GE Power Systems. The agreement covers GE Frame 7FA machines at three AEP plants, plus steam turbines installed across AEP’s 11-state territory.
British Energy sells: British Energy plc has sold its 50 per cent equity interest in Offshore Wind Power Limited (OWP) to GB Gas Holdings Limited for an up-front cash consideration of £2.2m ($4m). OWP has an option to take a lease from the UK’s Crown Estates Commissioners to construct a Round 1 offshore wind farm of up to 90 MW near Skegness.
E.On invests: The E.On Group plans to invest g13.8bn ($17.6bn) over the next three years. The majority of the capital spending will be on fixed assets, including maintaining and expanding the company’s power and gas networks, and implementing environmental protection measures at power generation facilities.
Excelergy collaborates: Excelergy Corporation has signed a partnership agreement with Wipro Technologies to jointly market, deploy and integrate Excelergy platforms in North America, Asia-Pacific, Europe and the Middle East. Wipro will provide technical helpdesk support to joint Excelergy-Wipro clients and development support for Excelergy’s expanding software product lines.
PSM NOx achievement: Power Systems Mfg., LLC has announced a major step forward in its emissions reduction technology for gas-fired industrial gas turbines. Its new technology, which is undergoing field evaluation, is expected to reduce NOx emissions to 2 ppm and CO to 0 ppm for E- and F-class gas turbines.
Technofast seeks growth: Specialist fastening device manufacturer Technofast has announced ambitions for aggressive growth over the next three years. The Australian company, which has already established itself in the US nuclear power market, is aiming to grow turnover from $1.5m to around $8m.
World Bank study: Worldwide trading of greenhouse gases more than doubled over the last year to about 71m t, according to a World Bank study. Power sector projects accounted for half of the emission reductions that were traded in 2003.
Wind turbine merger
Two leading Danish wind turbine manufacturers, Vestas Wind Systems and NEG Micon, are to combine their businesses in a share-swap deal. The merger will give the companies a leading position in the growing wind turbine market, and will help to ensure that Denmark continues to be a leading centre in wind power technology.
The new company will be known as Vestas. It will hold a market share of some 35 per cent and generate an annual turnover of over g2.7bn. “Size is not a goal in itself, but is necessary for us to meet our customers’ requirements for ever larger, more powerful and more complex turnkey solutions,” said Jørn Ankær Thomsen, chairman of NEG Micon.
Bent Erik Carlsen, chairman of Vestas added: “Even though the wind power industry is a growth sector, now is the time to combine capacity, technology and financial strength as the bedrock of our business. That will enable us not only to maintain, but also to expand, a position of international leadership.”
The merger will be effected through an offer to NEG Micon shareholders to exchange their shares for shares in Vestas. This will require a capital increase in Vestas. One NEG Micon share will be exchanged for one new Vestas share, representing an exchange ratio of 80:20.
Caterpillar and Solar join forces
Solar Turbines Incorporated and Caterpillar International Power Systems have announced that they have aligned their businesses to form Caterpillar Power Generation Systems (CPGS). The move will, says Solar Turbines, create a marketing organization that represents two leading brands in the 1-100 MW distributed generation market.
CPGS will represent two main power generation product lines: Solar gas turbines and Caterpillar Motoren reciprocating engines. It will be responsible for the marketing, sales, product management and order fulfilment activities of both brands.
Solar products that will be marketed by CPGS include the Saturn, Centaur, Taurus, Mars and Titan gas turbine ranges, and also the recently commercialized Mercury 50 gas turbine. Caterpillar Motoren products that will be marketed by CPGS include the CM20, CM25, CM32, GCM34 and CM43 medium speed engines. Solar and Caterpillar International Power Systems will provide engineering, manufacturing and packaging operations.
Solar Turbines announced in December that it had successfully commercialized the Mercury 50 gas turbine. The 4.5 MW, recuperated machine was developed as part of the US Department of Energy’s Advanced Turbine Systems programme and has completed more than 40 000 hours of operating experience at various field evaluation sites.
Renewables can compete with fossil fuels, says IEA report
A new report from the International Energy Agency (IEA) states that location and technology are two of the most important factors affecting the competitiveness of renewable energy, and that in certain locations, renewables can compete with fossil fuels on a per-kilowatt hour basis.
The report – Renewables for Power Generation: Status and Prospects – provides a baseline assessment of the status and near term potential of key renewable technologies. It notes that reducing the cost of renewables will require more research and development, and that market experience is highly important.
“Renewable electricity costs are highly dependent on the local resource, and are lowest in locations where resources are plentiful,” said Ambassador William C. Ramsay. “In such locations, renewables can now compete on a kilowatt hour cost basis with fossil fuels, even without taking environmental costs into account. Our challenge is to further improve renewable energy technologies to make them more widely competitive.”
The best potential for future cost reduction among the renewable technologies is about 20 per cent for each doubling of installed capacity, says the IEA. Solar technologies are expected to reduce their costs by 30-50 per cent for each of the next two decades. Wind and geothermal technology costs are expected to drop about ten per cent for each doubling of installed capacity.
El Paso sets roadmap
El Paso has announced a business plan that defines the company’s future business targets and financial goals. Under the plan, the company will streamline its operations into a new corporate structure organized around key regulated and unregulated business divisions.
The long-term plan is designed to reduce the company’s total debt to $15bn by the end of 2005 from $22bn in September 2003. The company expects to sell the majority of its domestic power business by mid-2004, while it will operate its international power assets to maximize cash flow.
El Paso’s power operations in Brazil, Central America and Asia will form part of its unregulated business.