Russia to reform by 2006

Russia’s Minister of Industry and Energy Victor Khristenko, and chairman of dominant power utility RAO UES Anatoly Chubais, have both indicated that the main restructuring process in the country’s electricity industry should be completed by the end of 2006. The reforms include the establishment of territorial generation companies (TGCs), wholesale generation companies (WGCs), grid companies and a system operator. Khristenko said that stakes in the newly created entities would be distributed to RAO UES shareholders.

The latest step in the reform process was the approval by RAO UES directors in late November of the establishment of a fourth WGC. Ten wholesale generation companies are to be created from more than 70 RAO UES generating assets. The timing of the auction of assets to be privatized under the reform programme has been put back and is now expected to take place around the middle of 2006.

South Africa seeks investors in peakers

The South African government has invited ‘expressions of interest’ from independent power producers (IPPs) to build two new peaking power plants with a combined capacity of 1000 MW.

Interested parties are invited to register and then bid for exclusive rights to build, own and operate the new plants, which will cost an estimated R6bn ($1bn) and are expected to be operational by the end of 2008. The locations are yet to be identified. The plants will be oil fired and will utilize open cycle gas turbine technology.

South Africa expects a capacity shortage around 2010 but the recent economic boom has led to a revision of the government’s timetable for expansion of electricity generation.

EC plans ACP Energy facility

The European Commission (EC) is proposing to establish a €250m ($337m) Energy Facility to further the work of the European Union’s Energy Initiative designed to improve access to energy for people in Africa, the Caribbean and the Pacific (ACP).

The funds are intended to help stimulate energy initiatives, provide information and build research and development in these regions as well as being a catalyst for generating additional funds for sustainable energy projects. If approved by the Council of Ministers, the €250m will be used to boost the provision of energy services by encouraging ACP governments to develop sound energy policies. Projects could include rural electrification or sustainable electricity generation through biomass, small hydro or wind power projects.

The facility will be open to joint funding with member states, and other international financing institutions via public-private partnerships.

NTPC look to Lebanon for first foray

India’s publically owned National Thermal Power Co (NTPC) is planning to bid to acquire a medium sized power plant in the Lebanon. If successful, it would be NTPC’s first foreign ownership. The company said it would look at opportunities elsewhere.

NTPC, India’s largest power utility, is involved in the construction of a 300 MW coal fired power plant in Sri Lanka at a cost of Rs15bn ($346m) and manages and operates power plants in the Middle East. Officials say NTPC plans to expand its consultancy operations and leverage its experience in the power sector to expand these operations both in India and abroad.

A new government strategy for the reform of the Lebanon’s electricity sector could involve the part-privatization of state electricity company Electricite du Liban.

Croatia reforms

The government of Croatia has submitted a package of energy bills to the country’s parliament aimed at reforming the electricity market. The legislation includes the establishment of an Agency for the Regulation of Energy Activities (HERA) and the merging of power transmission and management under the auspices of power utility Hrvatska Elektroprivreda (HEP). This new Transmission System Operator (TSO) would be separate from the market operator, which would operate outside the HEP Group.

Over the next four years, Croatia plans to gradually extend the ability to choose a power supplier, currently only available to customers consuming 40 GWh annually. HERA will be responsible for the tariff system, with the government defining the exact levels, and will give special attention to renewable energy sources and cogeneration.

OGK finance plan

The Russian Boguchansk hydropower project (HPP), which has been under construction since the mid eighties, is likely to be completed in the next few years with the necessary investment coming from the proposed hydropower-based wholesale generation company (OGK), being set up under Russia’s power market reforms.

The Russian government said in November that it favoured this arrangement over the proposal by Basic Element to complete the work on the projected 3000 MW project in exchange for an additional share issue in the Krasnoyarsk HPP.

News digest

Africa: The New Partnership for Africa’s Development (Nepad) says it is planning an ambitious project to link Africa’s power grids and extend supplies across a continent where less than 15 per cent of the population has access to electricity.

Egypt: The Egyptian Electricity Holding Company has applied to the World Bank for a $250m loan to construct a 650 MW thermal power plant at El-Tebbine in southern Cairo. Total project costs are an estimated $350m, including two 325 MW turbines, using natural gas as the primary fuel.

Kazakhstan: A stalled 264 MW hydropower project is set for completion within three years, the Kazakhstan government has announced. A state-owned company will be established to carry out construction at the Moinak plant on the Charyn River.

Oman: An IPO for a 35 per cent stake in AES Barka, Oman’s largest independent power and water supply company, has met with an overwhelming response, according to BankMuscat. The sale is the fulfilment of a contractual commitment by promoters AES and Mutitech.

Qatar: The AES-owned Ras Laffan project, Qatar’s first independent power and desalination project, has been inaugurated. The plant has 756 MW of gas fired power generation capacity and produces 182 million litres per day.

Russia: Lenenergo plans to complete construction of a new block at its No. 5 thermal power plant by the end of 2005, as part of a €40m ($53.1m) project financed by the European Bank for Reconstruction and Development. The new plant will replace a 1930s-built unit that will be shut down.

Saudi Arabia: VA Tech T & D has secured a €5m ($6.6m) contract to supply five 132 kV GIS bays and 13.8 kV switchboard and relays for a Saudi Electric substation at Qunfudah, south of Jeddah.

Slovakia: The Slovakian government has reportedly postponed talks with the Italian power company Enel over the sale of a 67 per cent stake in the company. Technical and legal problems were blamed for the delay.

South Africa: ABB has won an order worth $16m from national utility Eskom Holdings to strengthen the power supply in the Western Cape region of South Africa, utilising Flexible Alternating Current Transmission System (FACTS) technology.

UAE: A consortium of Saudi firm Arabian Bemco Contracting and Germany’s Siemens has been awarded the AED 801m ($218m) EPC contract to undertake the 400 MW extension of the Al-Aweer H power station in Dubai.

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