Russia approves new energy tariff regulator

Russian president Vladimir Putin has approved plans for a single tariff regulator to control the prices of natural monopolies. The new agency is to be set up in September 2001, and will take over the tariff-setting functions of the Federal Energy Commission (FEC) and other agencies.

The government has also confirmed the measures to be implemented in the first stage of energy sector reforms. A federal grid company will be established in 2001 as a 100 per cent subsidiary of power utility Unified Energy Systems (UES).

The new tariff agency will set the prices that monopolies such as UES can charge. It is likely to be headed by Georgy Kutovi, currently head of the FEC. Kutovi is keen to maintain energy tariffs at their current levels. This could lead to conflict with Anatoly Chubais, head of UES, who is in favour of tariff hikes.

Other reform measures to be taken include drafting bills to introduce competition to the power industry and define the legal principles of power supply.

Adwea awards 1500 MW power and desalination contract

The Abu Dhabi Water and Electricity Authority (Adwea) has awarded a $1.6bn contract for the Shuweihat S1 power and desalination project to a consortium of International Power and CMS Energy. The plant will be Abu Dhabi’s largest independent power and water facility.

UK company International Power and CMS of the USA will together own 40 per cent of the project on a 50-50 basis. They will also operate the facility for a 20 year period when operation starts in mid-2004.

The facility will include a 1500 MW combined cycle power plant and a 455m l/day desalination plant. It will be built on a greenfield site close to Jebel Dhanna, 250 km west of the city of Abu Dhabi.

A consortium of Germany’s Siemens AG and Italy’s Fisia Italimpianti has been awarded the main engineering, procurement and construction contract. Construction is expected to start in spring 2002.

  • Alstom has booked a $300m contract to expand the Hidd power and desalination plant in Bahrain. The company will build a 700 MW extension to the existing 280 MW plant, which was constructed by ABB and Fisa Italimpianti in 1997.

Hungary takes emission trading initiative

Two new companies have been established in Hungary to take advantage of the growing business in emission credits trading. The two companies – Carbon Central and Eetek Hungary – will trade under the credit system set up by the United Nations’ climate change convention.

Carbon Central has been set up by Rochester Financial Advisory and Koerte Organica Environment Technologies, while Eetek has been established by Dexia-FondElec Energy Efficiency and Emission Reduction Fund.

Trading in the emerging post-Kyoto global energy sector business in emission credits is estimated to be worth over $150bn as international companies set up joint trading projects in Central and Eastern Europe.

Czechs remain stubborn on CEZ sell-off package

The Czech government is to stick to its original plans in the sell-off of power company CEZ and will not separate the utility’s nuclear and non-nuclear assets. The government is aiming to raise Kc200bn ($5.4bn) from the sale and has appointed Deloitte & Touche as its advisor.

There is growing pressure from international companies interested in the privatization for the government to break up CEZ’s assets and sell them separately. Some companies, including Germany’s E.ON and the UK’s International Power, are only interested in the non-nuclear assets, while others, including British Energy, are keen on purchasing just the nuclear assets.

CEZ is to be sold in a package with six regional distribution companies. The sale includes the Temelin nuclear power plant which was due to be restarted in late August.

Siemens wins Israel contract

German engineering group Siemens AG has been awarded a contract by OPC-Ramat Hovav company to build Israel’s first natural gas fired power plant. The project is expected to cost some $200m.

The contract was awarded after a long dispute between OPC and Israel Electric Corp. (IEC) over the rights of the private power producer to sell electricity to consumers. The original tender for the project was issued in 1997, and agreements still have to be reached over what percentage of the plant’s output will be sold to IEC.

The plant will have a capacity of 370 MW.

News digest

Armenia: The Armenian parliament has approved the government’s proposal to amend the terms for the privatization of four energy distribution networks. The revised law allows one bidder to buy a controlling stake in all four networks, instead of a maximum of two, and removes the ban on owners of distribution networks holding more than a 25 per cent stake in a power generating company.

Nigeria: Nigeria’s National Electric Power Authority (NEPA) has begun work on repairing and rehabilitating 22 substations and their collective network of 2058 km of transmission lines. The project, which has already cost the federal government an estimated N150bn ($1.33bn), aims to secure an effective power supply and distribution system by December 2001.

Romania: The Romanian Industry Ministry is to sell off 21 unfinished hydropower plants to domestic and foreign investors. The plants have a combined capacity of 1000 MW and would need an investment of $900m to complete them. Canada, Germany, the USA and France have all shown interest in the proposal.

Russia: A nuclear waste processing and storage facility has been opened at the Zvezda defence enterprise site in the Primorskiy region of Russia. The facility comprises two sites, one of which is capable of processing 2500 m3 of liquid radioactive waste annually. The system will also decontaminate and compact low-activity solid radioactive waste. Companies failing to meet the targets will have to buy The World Bank has donated $6m to Serbia’s power monopoly Elektroprivreda Srbije (EPS) as part of a $30m aid package for the power company which was devastated by NATO’s 1999 air strikes. The money will be used to partly finance the overhaul of a thermal power plant in Kostolac and works on a high voltage transformer near Belgrade.

Sudan: The National Electricity Corporation of Sudan (NEC) has awarded VA Tech Hydro two contracts for rehabilitation and modernization works at its Roseires power station. The contracts, worth an estimated a10m ($9.1m), cover the rehabilitation of a 44 MW turbine, installing a new turbine runner and new guide vanes, overhauling and repairing other turbine components, and new instrumentation.

Turkey: GE Power Systems and Siemens Nederland N.V. will supply four MS6001B gas turbine generators and auxiliary equipment to three combined cycle power plants in Adana, Canakkale and Mersin, in Turkey. The contract, which is worth some 148.5 m ($44.5m), is from Enerjisa who owns the facilities. The gas turbine generators are equipped to burn three fuels, natural gas naphtha and light distillate.

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