Bush energy plan revives coal and nuclear projects

US president George W. Bush’s recent energy policy review is already making a major impact, with two developers announcing plans for coal fired plants in June. The review sought to solve the current problems in the country’s energy industry.

Dominion and Anker Energy Corporation announced plans to develop a new coal and coal waste fired power plant in Upshur County, West Virginia, while Reliant Energy broke ground on the first major coal fired power plant to be built in Pennsylvania in 20 years.

Dominion will construct, own and operate the 450 MW plant, while Anker Energy will provide all of the facility’s fuel from on-site surface mining operations.

Reliant Energy will develop a $800m, 520 MW circulating fluidized bed (CFB)-based Seward power plant in Indiana County. Reliant has contracted Alstom to supply the major equipment for the project, which will begin operation in May 2004.

In May, Exelon, the largest nuclear operator in the USA, said that it hoped to announce a new nuclear power plant within the next year.

Brazil orders power line

Global technology group ABB has won a $300m contract to build two high voltage power transmission systems in Brazil. The project will reinforce the country’s power infrastructure and help the country to overcome its current energy crisis.

ABB will construct two power lines with a combined length of nearly 1300 km. The order stems from a concession agreement granted by Brazil’s Federal National Electric Energy Agency for a consortium of developers to build, own and operate power lines in the north of the country.

ABB will design and construct all the transmission line components, including six 500 kV substations and reactive power compensation equipment.

Altamira will be largest plant of its kind in Mexico

Iberdrola Energia Altamira SA de CV, a subsidiary of Grupo Iberdrola, has awarded a contract for the construction of the Altamira power plant in Mexico to ICA Fluor Daniel. The 1036 MW independent power plant (IPP) will be the largest of its kind in the country.

ICA Fluor Daniel will construct the combined cycle plant under a $195m, 27-month lump sum turnkey contract. It is a key part of the Mexican regulator’s (CFE) programme to develop IPP plants to help Mexico meet its growing demand for power.

Altamira will supply power to the growing northern industrial part of Mexico. Iberdrola signed a power purchase agreement with CFE in January 2001.

NRG acquires South American stakes

NRG Energy has acquired Vattenfall’s interests in three South American projects and the ownership interest of Inepar Energia (Inepar) in the Itiquira project. The move is part of NRG’s aim to increase its presence in the Southern Cone.

The Vattenfall interests include Compania Boliviana de Energia Electrica SA (Cobee), a Bolivian power company; Compania Electrica Central Bulo Bulo SA, also in Bolivia; and Itiquira Energetica SA of Brazil.

“This acquisition provides a strong base for NRG’s continued development in the Southern Cone region,” said David H. Peterson, chairman, president and CEO of NRG.

NRG was a 50 per cent partner with Sweden’s Vattenfall in the three companies, and now owns 98.9 per cent of Cobee, 60 per cent of Bulo Bulo, and 99 per cent of the common shares of Itiquira.

FERC curbs prices

The Federal Energy Regulatory Commission (FERC) has promised to put in place a wholesale ‘price mitigation’ plan for California and ten other states in an attempt to bring relief for electricity customers in the western USA. It has also widened an investigation into alleged market power abuse.

The wholesale price caps will be limited to days when emergencies are declared in California, and will last until October 2002. The move was criticized by some analysts and consultants, and has led other regions to ask regulators for similar caps.

FERC has joined other regulatory bodies in its investigation of alleged market abuse. It is following up a complaint made by the California Public Utilities Commission last year that El Paso Corp., the largest supplier of natural gas to California, manipulated the natural gas market and contributed to the state’s record-high wholesale electricity prices.

Cambridge Energy Research Associates’ senior director for electric power, Larry Makovich, told the US Senate Governmental Affairs Committee that price caps would “make a bad situation worse and do nothing to fix the flaws.” He continued: “Price caps, although well-intentioned, usually distort the market and create unintentioned consequences … We can be sure that price caps on power in California today will do one thing: prolong California’s agony.”