Regulators warned lack of certainty threatens supply

Utility companies have warned that regulatory uncertainty is holding back the investment needed to secure power supply worldwide.

According to the seventh annual PricewaterhouseCoopers global utility survey, titled Under Pressure, regulatory worries top the list of concerns expressed by investors about funding the industry. While a majority of investors believe deregulation is helping the investor climate, 39 per cent say market reforms are damaging confidence.

The International Energy Agency believes that an investment of $12.7 trillion will be needed by 2030 in the global power generation, transmission and distribution and gas supply infrastructures. However, the report found that the utility sector faces stiff competition in attracting investors from the financial services, consumer and retail and pharmaceuticals industries.

South East European grid would reduce costs, says Argonne report

If the South East Europe region were to operate as a regionally integrated system dispatching on a least cost basis, operating costs could be reduced by 11-15 per cent, according to preliminary reports from a study by Argonne National Laboratories.

Power supply in South East Europe (SEE) is projected to tighten significantly during the next few years, threatening to constrain the region’s economic development and quality of life if not addressed.

Apart from Turkey, investment in the region over the last ten years has been limited, with the average age of capacity now in excess of 30 years. If severe power shortages are to be avoided, over the next decade 12 000-15 000 MW of new capacity will be required and 8000-9000 MW of plants will have to be rehabilitated, along with matching investments in the region’s transmission and distribution system investments.

Major interest in South African independent power projects

More than 90 companies world wide have registered their interest in the South African government’s R6bn ($912m) tender to build two new power stations planned to alleviate the threat of a power crisis.

The winner will build two gas fired power stations, in KwaZuluNatal and Eastern Cape, which will deliver the first 1000 MW of the 5000 MW the government has predicted will be needed within the next five years if it is to avert blackouts.

To attract investment after uncertainty surrounding its potential liberalization, Eskom, the state owned utility, has agreed that the successful tender will have a 15 year power purchase agreement.

Eskom will provide 70 per cent of the investment needed over the next five years to address South Africa’s power demand problems, with the remaining 30 per cent to come from the private sector.

Estlink underwater cable project launched

The first interconnection between the Baltics and Nordic electricity markets has been launched after the European Commission approved an exemption which will charge Nordic Energy Link for the cable’s construction rather than adding the costs to the domestic tariffs of the main grids.

Part of the European Union’s plan is to expand interconnections in Europe – the link is seen as a vital step towards increasing energy efficiency. It will use ABB’s high voltage direct current light technology, in a contract worth $110m to the company.

Estlink will be approximately 100 km long, 75 km of which will be underwater, and will stretch from the Harku 330 kV substation in Estonia to Espoo 400 kV substation in Finland.

REEEP to spend €1m on global energy projects

The Renewable Energy and Energy Efficiency Partnership (REEEP) is to invest just over €1m ($1.3m) in clean energy projects in Africa, Asia, North America, Latin America and Europe.

The €1m will be spent on 18 new projects that will strive to accelerate the market development of clean renewable energy projects. The projects range from blueprints for national renewable energy policies, to support for clean energy funds.

Half of the announced developments will establish policy and regulatory models, and half will focus on establishing new financing techniques.

Two thirds of the projects are in the renewable energy sector and the final six are focused on energy efficiency.

The REEEP project is an international response to clean energy that aims to propagate best practice internationally. It went into operation in 2003.

News digest


Japan Bank for International Co-operation is to loan the government $273.4m for the construction of a 400 MW gas fired combined cycle power plant that will be located near Baku, the country’s capital.


East Delta Company for Electricity Production and France’s Alstom are to modernize the 750 MW Talkkha, Delta power plant as part of the Ministry of Electricity’s plan to secure power supply by 2007.


The Karelian regional government may resume construction of the Beloporozhskaya hydroelectric station, which has stood idle since 1980.


Domestic electricity production is expected to have increased 3000 MW by March 2006. Iran currently imports from its neighbours 1.2 million kWh, 500 000 kWh more than it exports.


Japan is researching the possibility of constructing a $100m 60 MW thermal power plant in the southern Iraqi city of Samawah. If it is established that Japanese engineers can work safely the power plant could be in operation by mid 2007.

Middle East

Zurich based, Asea Brown Boveri is to bid for the $1.25bn Gulf Power Grid that will initially connect Bahrain, Kuwait, Qatar and Saudi Arabia by 2008. The first contracts are expected to be awarded by mid September 2005.


VA Tech has secured the €135m ($170m) contract for the construction of a gas combined cycle heat and power plant in Bucharest, Romania.


Power Machine’s Group is to supply three 660 MW units for the construction of the Barh thermal power plant in Bihar, India.


The Swaziland government is planning to expand domestic power production after it became clear that South Africa’s national utility, Eskom, would not be able to export more power into Swaziland than it already does. It currently supplies 80 per cent of Swaziland’s electricity.


Following in Uganda’s footsteps, Tanzania is to start an electrification project to make electricity and information technology more accessible in rural and semi urban communities.


Abu Dhabi has finalized a $2.7bn financing package to build its fifth water and power project in the Emirate. The Taweelah B project will supply 2000 MW of power and 728 million litres/day (160 MIGD) of water by 2008.


A newly installed thermal power plant will provide the national grid with an extra 50 MW to halt the country’s regular power cuts. Uganda has demand for 340 MW while it currently produces just 220 MW.