South Africa cans $653m AES deal

US power producer AES has lost a R5bn ($653m) contract that South Africa’s Minerals and Energy Department had awarded it as head of a consortium that would have built two gas fired peaking plants.

AES has been unable to meet its obligations under the deal to build the two open cycle gas turbine power stations. The company was to have posted a bid bond of R20m by the end of March to secure the contract but failed to do so.

AES spokesman Robin Pence said the company had been content to let the contract lapse because the project was no longer viable, but he gave no further details, saying that these were confidential.

According to Minerals and Energy Department chief director Omphe Aphane, her organisation cancelled the deal because the consortium could not meet its commitments, but she added that it would seek an alternative operator and that this would lead to delays as due process had to be followed.

South Africa’s Minerals and Energy Minister Buyelwa Sonjica had announced the contract in August 2007 as a boost to the establishment of independent power producers in the country.

The 760 MW plant in KwaZulu Natal Province and the 342 MW facility in the Eastern Cape Province were to have contributed to efforts by South Africa’s state-owned utility Eskom in order to improve its electricity grid reserve margin, which has fallen to unacceptably low levels in recent years due to exceptionally strong economic growth in the country.

pMoroccan hybrid solar-thermal plant getsfunding to raise capacity to 472 MW

Morocco has won a further $238m from the African Development Bank (ADB) for its planned hybrid solar-thermal power project at Ain Beni Mathar in the north east of the country. The loan will pay for an increase in the plant’s capacity from 250 MW to 472 MW and raises the bank’s total contribution to the project to $454m.

Morocco’s state energy company Office Nationale de l’Electricité is developing the project, toward which it has committed $157m. Some $58m for the project is coming from the Global Environment Fund, which is jointlymanaged by the World Bank, the UN Development Programme and the UN Environment Programme.

Morocco will repay the ADB loan over 20 years. Spain’s Abengoa is carrying out the main construction package for the plant.

UAE furthers nuclear plans

A recently published white paper and the signing of a cooperation agreement with the US have moved forward the UAE’s plans to develop a nuclear energy capability.

In document, “The Policy of the UAE on Evaluation and Potential Development of Peaceful Nuclear Energy”, the UAE has revealed the path that its implementation of its programme for nuclear energy will follow. Meanwhile, Foreign minister Sheikh Abdullah bin Zayed al-Nahayan has signed a memorandum of understanding with US Secretary of State Condoleezza Rice that will see the countries cooperate on a programme to develop nuclear energy for the UAE.

Development of the white paper followed the endorsement of the document by the UAE’s Council of Ministers in March, and consultation with the International Atomic Energy Agency and the governments of China, France, Germany, Russia, South Korea, the UK and the US. Its new deal with the US is on top of the UAE’s previously signed nuclear cooperation agreement with France.

UAE nuclear plans involve the establishment of a $100m agency to look into developing nuclear power and the creation of laws to govern the new sector. It will also create an authority to regulate the industry, establish an international advisory board of nuclear experts and continue to seek assistance from other governments to build reactors and transfer nuclear technology.

Sheikh Abdullah said: “In-depth studies carried out by government entities have shown that nuclear energy represents a commercial, competitive and environmentally friendly option for the secure generation of electricity in the UAE, particularly in light of future projected shortages of natural gas.”

Turkey to modernize gas fired plant

A Turkish power plant – Trayka – has awarded two contracts to French engineering concern Alstom to raise output of the combined-cycle facility 100 km from Istanbul.

In the first contract, Alstom will upgrade two GT13DM gas turbines and supply compressor blades and one new and one reconditioned rotor. It will also replace combustor components.

The company says the refurbishment will raise the turbine’s efficiency and reduce its lifecycle costs. In the second contract, it will convert four gas turbines to dual-fuel operation.

Trakya comprises eight gas turbines, four of which have been upgraded as part of an onoing plan to modernize the power plant.

Dubai builds floating LNG terminal

Dubai is to build a floating regassification terminal where it will import LNG that will help it meet summer peak demand. Dubai Supply Authority (DUSUP) will convert an LNG ship into the terminal and will moor it within the Jebel Ali terminal.

On completion of the project in 2010, Shell will be the main supplier of the gas, which will come from the Qatargas 4 field in Qatar under a 15 year agreement.

Dubai is struggling to find fuel for its rising energy demand.

Egypt’s power consumers will be able to choose supplier

Some electricity customers in Egypt will soon be able to choose their suppliers. A law that is going before the country’s parliament this year aims to allow large users of power to buy directly from public or private entities, which would end the government’s monopoly on supply.

Phase one would see consumers that require 20 MW or more move to the competitive market. This will account for about 30 per cent of the electricity sold in Egypt a year and will affect about 100 customers. Phase two will involve the 4000 customers that use at least 500 kW and make up 20 per cent of the market.

Whether phase three, which includes small consumers such as residential customers, goes ahead is yet to be decided by the government.

Egypt will establish several markets. A bilateral market will allow customers and generating companies to buy and sell power.

Here, the Egyptian Electricity Transmission Company (EETC) will provide any power that a generator is contracted to supply but unable to. A market for ancillary services will let the EETC buy extra power in the short term to meet unplanned for rises in demand or losses from the grid.

Industrial customers will also be able to buy electricity at short notice in a new day-ahead market.

Under the new law, the Egyptian Electric Utility & Consumer Protection Regulatory Agency will oversee the transition to the liberalized market and will also get new powers. It will set generation tariffs for government-backed utilities and transmission and distribution tariffs across the industry.

Planned dam in DR Congo would dwarf China’s Three Gorges

Plans to generate power from the Congo river would create a dam of capacity twice that of the world’s largest, Three Gorges in China.

In all, seven African governments, banks and construction companies have met to plan the $80bn Grand Inga dam in the Democratic Republic of Congo that would bring electricity to hundreds of millions of Africans for the first time.

A study suggests that the capacity of the hydroelectric plant would be 40 GW and that it would use at least 50 turbines. Its height would be 150 metres.

The Congo river is the world’s second largest and drops by 100 metres in only about 13 km in the area in which the project would lie, a position where the Congo has the largest volume of water of any river.

African governments hope that the Grand Inga project would spur industrial development in the continent when complete in 2022. It would export power to Egypt, Israel, Nigeria, South Africa and as far away as Europe.

The 1970s saw the buiilding of two hydroelectric plants on the river, Inga 1 and 2, and a third is in the planning stage. However, Grand Inga would be much larger than these, making use of 26 000 m3 of water per second.

Ethiopia suffers power shortage as its economy expands

Ethiopia is experiencing acute power shortages as its growing economy has caused a strain on factories.

“Many new factories have been established,” said Mihret Debebe, general manager of the Ethiopian Electric Power Corporation (EEPCo), 95 per cent of whose 1.4m customers are residential. Although industry and the service sector accounts for the remaining 5 per cent, these customers consume 69 per cent of its output.

According to Mihret, Ethiopia’s power deficit is 80 MW. Its generating capacity is 814 MW, made up of 80 per cent hydro and 20 per cent geothermal and thermal. But for various reasons, including poor rainfall, EEPCo is generating well under capacity and is “power shading”.

EEPCo is currently undertaking the construction of five large hydropower plants and has plans to build ten more in the coming years.

EEPCo has also planned geothermal and wind projects to bring the total capacity to 6 GW and to export surplus to Sudan, Djibouti and Kenya.

IEA outlines world’s energy challenges

The International Energy Agency (IEA) has outlined the energy challenges that the world is facing.

In April, IEA Executive Director Nobuo Tanaka told senior policy makers from over 90 countries at the Eleventh International Energy Forum: “The world’s energy economy is on a pathway that is not sustainable.”

Tanaka added that the world needs greater investment in the oil sector and that carbon capture and storage should be made eligible to receive revenues from the Clean Development Mechanism of the Kyoto Protocol.

Investment in Russian power industry to grow

Russian electricity supplier RAO UES has outlined how investment in the country’s industry will grow.

Board member Yury Udaltsov said at Russia Power 2008: “We expect the inflow of capital to double in the next 15 years if demand increases as forecast.”

The company has already drawn €23bn ($36bn) in investment into the sector. It will raise another €4bn when it sells assets this month. But when the company is dissolved in July, generators will decide how much to invest in generation facilities.

Bahrain: Three wind turbines that are integrated into commercial property have begun delivering power. Bahrain World Trade Centre’s two towers will receive 11-15 per cent of their electricity from the turbines of 29 metre diameter supplied by Norwin. They will turn for 50 per cent of the time.

Ghana: A gas combined cycle power station will with a capacity of 200 MW will be running this year near port city Tema. The China-Africa Development Fund has financed the project with $143m. Plant capacity will rise to 560 MW in the future.

Kazakhstan: China’s second largest power generator Datang is to invest $860m in the building of three power plants: a 1320 MW thermal plant, a 36.8 MW hydro plant and a 50 MW wind farm. The company’s investment in the country to date has been in small hydroplants.

Morocco: A site near the city of Oujda will be the location for the world’s first solar-thermal combined cycle power station. Its output when complete in 2009 will be 472 MW, some 20 MW of which will be from solar energy, and will provide up to 8.5 per cent of national production.

Nigeria: An ongoing probe by the government has continued to find abandoned power projects. The latest is the 520 MW Egbema scheme, awarded in 2006 and due to be completed in March this year. Although about 90 per cent of the contract value has been paid, there is nothing at the site.

Russia: GE is opening a sales, service and technology office in Moscow in response to what it says is a “great increase in demand for advanced energy technologies”. The facility will house employees of GE Infrastructure.

Russia: Generator TGK-8 has awarded the E4 Group a $600m contract for the extension of the Krasnodar thermal power plant on condition that the works will be completed in 34 months. The extension will increase the plant’s output to 410 MW.

Russia: Better plant management accounted for a record 155 TWh of output in 2007 from nuclear power stations, according to state-owned nuclear energy company Rosatom. This is despite the country having built no new plants over the last 15 years.

Russia: Oil and gas company Rosneft is taking delivery of three SGT-800 gas gensets made by Siemens in an order worth more than €40m ($63m). Petroleum gas byproduct from the Priobskoye oil field in Siberia will feed the 45 MW units whose output will power Rosneft’s facilities in the area.

Russia: Main electricity supplier RAO Unified Energy Systems is continuing to sell its generating companies. Chairman Anatoly Chubais said there was only one buyer for the four remaining firms, which it says it will sell by the middle of the year. These include wholesale generator OGK-1.

Russia: A consortium led by local firm OJSC has won a contract to build the 800 MW power unit 4 at the Perm plant for 16bn rubles ($680m). The plant, which has an installed capacity of 2.4 GW, is the main supplier of electricity to the Urals region.

Saudi Arabia: The upgrade of Central province’s PP8 plant from 1850 MW to 2330 MW will include performance monitoring solutions from Invensys Process Systems. The equipment will control the four new GE gas turbines that will make up the extension. PP8 is one of two plants that supply Riyadh, the capital.

Serbia: The government has said that it has failed to adopt a wide-ranging deal with Russia on energy cooperation. The agreement would have, among other things, secured Serbia’s role as a transit country for a major gas pipeline from Russia to Europe.

Turkey: State-owned electricity company Tetas is accepting bids to build the first of the country’s first three nuclear power plants, a 4 GW power station in Akkuyu near the port city of Mersin. Energy Minister Hilmi Guler has said that nuclear must provide 20 per cent of the country’s power within two decades.

Uganda: Construction of the 200 MW Karuma hydroplant will begin in September, according to Energy Minister Daudi Migereko. The minister said that the country is studying how the power station’s capacity can be increased.

Yemen: Iceland’s Reykjavic Energy Invest (REI) is to lead a study into the possibility of geothermal generation at Lesi mountain in the Dhamar region. REI will invest in the country’s first geothermal power station there if the study shows that the potential for such a plant exists.