News digest

Americas

Brazil: The National Electric Energy Agency has announced that it will auction three blocks totalling 1575 km of transmission line at the Rio de Janiero Stock Exchange on January 31, 2001. Block A is the expansion of the 328 km South-Southeast line, Block B the 323 km Tucurui-Vila do Conde line, and Block C is the expansion of the 924 km North-Northeast line.

Brazil: Six foreign companies are planning to submit bids to acquire a controlling stake in Brazilian generator Cesp in a public tender scheduled for December 2000. AES, Duke Energy, Southern Electric, EDP, EDF and Spain’s Endesa are all thought to be interested. The Sao Paulo government is selling a 38.6 per cent stake for a minimum price of R$1.74bn ($973m).

Canada: The Newfoundland government has scaled down the Churchill Falls hydropower project after aboriginal and environmental issues and disagreements with the Quebec government could not be resolved. The project will now be designed to generate 1700 MW of power and will cost C$3.7bn ($2.37bn), less than a third of the original C$12bn scheme.

Cuba: Cuba is seeking foreign partners to invest in biomass-fired power plants that would use sugar cane residue as fuel. The country’s Sugar Ministry has held discussions with companies from a number of countries, including Spain, Brazil and Norway. The scheme would help the country reduce its reliance on costly oil imports.

Mexico: The CFE and Union Fenosa of Spain have sealed an agreement for Union Fenosa to build the Tuxpan III and IV generating plants under the government’s IPP Scheme.

USA: American Electric Power has signed an agreement with Thermal Energy International Inc. to finance the first commercial-scale demonstration of Thermal Energy’s Thermalonox emission reduction system. AEP will install a Thermalonox unit at its Conesville coal-fired power plant in Ohio to validate and test the technology over a 12-week period. The system is expected to remove at least 75 per cent of NOx emissions from the 375 MW unit.

USA: Internet marketplace portal TradeOut has announced that it has completed the sale of a Siemens-Westinghouse gas turbine generator to a municipal utility in Kansas for $13m. The transaction is the largest single asset sold via the portal, and was offered for sale via the site by a large Midwestern utility.

USA: FuelCell Energy has been awarded contracts to supply its Direct FuelCell (DFC) to two new power plants in Ohio and Connecticut.


Asia-Pacific

Bangladesh: The Export-Import Bank of the USA has approved a $8m loan to finance three small-scale power generating plants in Bangladesh. The loans will support the sale of equipment and services by Caterpillar Inc. for use in the Comilla, Narsingdi and Dhakaprojects.

China: Huajin Electric has said it is to undertake the phase two development of the Shanxi-Shentou 2 power plant and is in the initial stages of constructing the 1000 MW coal-fired power station.

Fiji: Finland’s Wärtsilä is to supply two power generating plants to Fiji to help cope with soaring demand and frequent power outages. W

India: The Maharashtra State government has approved a proposal to unbundle the Maharashtra State Electricity Board (MSEB) into three separate entities as part of the ongoing reforms in the state power sector. Separate units for generation, transmission and distribution will be formed in an effort to improve accountability and transparency.

India: Global power developer Enron is reported to be seeking a new partner for its $1.87bn Phase II Dhabol power project after the Maharashtra State Electricity Board expressed and “inability to invest for the time being”. Credit Suisse First Boston has been appointed to find a partner to replace the 15 per cent equity stake, worth $64m.

Philippines: PNOC-Energy Development Corp is seeking some $60m in loans from the Japanese Bank for International Cooperation to support the first phase of a wind farm project in Ilocos Norte, Philippines. Construction on the 40 MW project could begin in 2001 if funding is secured. PNOC-EDC, a subsidiary of state-run National Oil Co., is conducting topographic and geotechnical surveys.

Philippines: Southern Energy of the US has acquired a 20 per cent interest in the Ilijan independent power project in Batangas for $35m. The 1250 MW combined cycle plant is currently under construction, and will be fired by natural gas from the Malampaya-Camango offshore gas fields. Power from the project will be sold to the National Power Corporation under a 20-year power sales agreement.

Thailand: Belgian energy group Tractebel has paid $490m for the Thai power assets of US company Sithe. The deal includes five cogeneration plants with a combined generating capacity of 1022 MWe.


Europe

Channel Islands: ABB has successfully energized a new 85 MW submarine cable between France and Jersey and a link between Jersey and Guernsey for the Channel Islands Electricity Grid Company. The link is the first between Jersey and Guernsey, and also means that Guernsey will be connected to the European grid for the fist time. The Channel Islands will now have to rely less on oil-fired generation and will also benefit from fibre optic links.

France: Steam turbine manufacturer Peter Brotherhood has won a contract valued at more than à‚£1m for a 5.7 MW steam turbine to be supplied to CNIM of France. The unit will be installed at a waste incineration plant near Lyon that will generate heat and power. Peter Brotherhood, which is 130 years old and exports to over 100 countries, said that the order is its first from France.

Germany: Belgian utility Tractebel is to buy the power plants of German utility Stadtwerke Saarbruken for DM200m (a391.16), and is to establish a joint venture with the utility to market electricity, gas and heat. The deal is an important first move into Germany for Electrabel, which said that it hopes to capitalize on its acquisition and realise further growth in the country.

Germany: The city of Berlin has lifted its opposition to the sale of 49 per cent of city utility Bewag to Hamburg-based utility HEW, which is controlled by Vattenfall. The decision means that Vattenfall, through HEW, will be able to use Bewag as a stepping stone in its fight for control of Veag, the east German utility. US power group Southern Energy, which owns 26 per cent of Bewag, is also keen to gain control of Veag.

Italy: German utility EON has dropped its plans to join forces with Finmeccanica of Italy to bid for one of the electricity generating companies to be sold by the Italian government in 2001. It said that it changed its strategy after realising that owning power generation assets would not allow it access to the distribution or retail markets.

UK: Energy market regulator Ofgem has said that the ‘go live’ day for NETA, the new electricity trading system for England and Wales, has been scheduled for 27 March 2001. The system, which will bring an end to the power pool mechanism currently used for power trading, was originally scheduled to be implemented in October 2000.

UK: Power supplier Scottish and Southern has announced plans to further diversify its operations away from traditional utilities into financial services. The company already offers pensions through a subsidiary organization, but said that it would soon start to offer mortgages and saving schemes.


International

Czech Republic: The European Commission has proposed that a report from the Western European Nuclear Regulatory Association should be used to settle the dispute between the Czech and Austrian governments over the safety of the Temelin nuclear plant. The report states that there are concerns over safety levels at the plant, but that once these are resolved, it would reach safety levels comparable to reactors in the West.

Ghana: The Volta River Authority has commissioned the first phase of the Takoradi power plant at Aboadze, 15 km east of Sekondi. The $410m project was supported by the International Development Association, the European Investment Bank, the Commonwealth Development Corporation and other financial institutions. The project will diversify the country’s power resources away from hydropower.

Jordan: The Ministry of Energy and Natural Resources is inviting international power firms to submit proposals to build a power plant fired with oil shale. The plant would be built on a build-own-operate basis in the Sultani area where large reserves of oil shale exist. Proposals must be submitted by May 31, 2001.

Russia: Russia’s Atomic Energy Ministry has offered final nuclear waste storage facilities to German utility RWE in exchange for RWE using MOX fuel extracted from weapons-grade plutonium. Similar proposals have also been sent to EON and EnBW of Germany, although none of the companies has made a decision.

Serbia: State power company EPS has stepped up power restrictions in an attempt to fight the country’s worst energy crisis in years. Low reservoir levels coupled with a power system crippled from years of underinvestment and bomb damage have left the country with severe power shortages. The European Commission and Bulgaria have signed deals with Serbia to supply the country with power over the coming winter.

Syria: A 600 MW oil-fired power plant constructed by Mitsubishi Heavy Industries (MHI) has entered operation. The Al-Zara power station, built near Hama in central Syria, entered into service on November 13, 2000. MHI is also constructing a 1000 MW power plant in Aleppo, northern Syria.

Tanzania: The Tanzanian Electric Supply Company has imposed severe power rationing measures throughout the country, saying that it cannot afford to buy fuel because government offices have not paid their power bills. It is aiming to cut national power consumption by 35 per cent, and will cut power off for 16 hours per day until March 2001.


Companies

Foster Wheeler reports: US-based Foster Wheeler Corporation has reported increased third quarter and nine month earnings. Net earnings for the quarter stood at $10.1m on $1022m in revenues, up from a net loss of $22.9m and revenues of $956m for the third quarter 1999. The company has also increased new orders booked by 48 per cent from the same period in 1999, and reduced its backlog. Chairman and CEO Richard Swift said that demand for the company’s heat recovery steam generators and selective catalytic reduction units had been strong.

GE invests in Hungary: GE Power Systems is constructing a new 13 900 m2) manufacturing facility in Veresegyhaz, near Budapest, in Hungary. The facility will manufacture several product lines including gas turbines of up to 50 MW. The facility will begin production in 2001, and will serve primarily 50 Hz applications in Europe and other parts of the world.

Harza sets sights on Europe: Harza Engineering Company and Paris-based engineering company ISL have formed a joint venture to develop energy and water resource projects in Europe. Harza-ISL will plan, design and carry out construction management of dams and hydropower plants. Harza said that it has been looking for a European presence to be closer to European clients and to gain access to European financing.

RWE boosted: German energy group RWE has increased group turnover in the first quarter of the business year 2000-2001 by 25.6 per cent to a12.7bn ($10.8bn). Operating profits rose 6.7 per cent to a605m while net profits fell by 5.3 per cent to a250m.

Siemens strengthens: Siemens Power Generation Group (KWU) is to acquire the Demag Delaval Group from Atecs Mannesmann AG in a move designed to strengthen its industrial turbine and power plant production business. Demag Delaval is a leading supplier of turbo compressors and has a workforce of around 2600. The acquired company will be merged into the Industrial Turbines and Power Plants division from 1 April 2001 subject to the approval of competition authorities.

Vattenfall cuts back: Swedish utility Vattenfall has said that it is planning to cut costs and improve efficiency after announcing a sharp fall in its profits. Operating profits excluding extraordinary items for the first nine months of the year were SKr3.3bn ($330m), lower than last year. The utility, which has been expanding rapidly in Europe through acquisitions, said it was hit by low power prices.

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