Brazil announces financing measures to fend off crisis

Brazil’s National Development Bank (BDNES) announced financing measures aimed at stimulating investment in the electricity sector to help fend off the current energy crisis.

BDNES said it approved a measure to extend financing to companies that want to import equipment or machinery as part of generation or transmission projects – as long as the equipment is not made by any Brazilian competitors.

The bank also increased the amount of finance it would provide for generation, cogeneration, transmission and energy efficiency projects. In many cases BDNES’s stake will double and in others the bank will finance the entire project.

Recent investment in Brazil’s energy sector has been forthcoming. US company, El Paso Energy, will invest $3bn by 2005 in six new thermal plants, each capable of producing 400-500 MW. This is in addition to five similar projects, which are either in operation or in the planning stage, at an investment of another $3bn.

EDF’s Brazilian subsidiary, Light, has said the government’s electricity rationing programme is expected to lead to a decline in turnover of ten per cent this year.

Meanwhile, the Brazilian government said the three-month rationing programme had worked well. Pedro Parente the minister in charge of resolving the crisis said: “With the cooperation of society, I am certain we will have overcome the worst of the crisis by the end of this year.”

GE recently announced that the first two of 54 heavy duty gas turbines have arrived in the country to help meet urgent demand.

Small scale generation moves forward

Capstone Turbine Corporation and Siemens Westinghouse have separately announced orders for small scale power plants.

Capstone California, a wholly-owned subsidiary of Capstone Turbine Corp. announced that the installation of its largest commercial Capstone Microturbine landfill gas system to date is now completed at Los Angeles’ Lopez Canyon landfill.

The 50- microturbine system, owned by the Los Angeles Department of Water and Power, will convert methane collected at the site to produce 1.5 MW of electricity.

Meanwhile, Siemens Westinghouse has signed a contract with BP to install a 250 kW solid oxide fuel cell (SOFC) at BP’s gas-to-liquids test facility in Nikiski, Alaska. The prototype SOFC system will be installed in 2003 and will run on natural gas.

BP plans to use about 150 kW of the unit’s output to power the warehouse and administration building of the gas-to-liquids facility.

National Grid eyes further US investments

National Grid, operator of the UK’s high voltage network, may invest a further $2.4bn in the US after being appointed to manage a new independent transmission organization covering 11 states.

National Grid said it would invest $75m in initial capital and draw an annual management fee of $14m under its initial seven-year contract to run the new company, called the Alliance Regional Transmission Organisation.

The Alliance comprises the transmission systems of ten companies covering Indiana, Illinois, Kentucky, Michigan, Missouri, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia. The region covers about 41m people and has a peak load of about 108 GW.

National Grid already owns New England Electric System and Niagara Mohawk in the northeastern US.

AES acquires Argentine interests

US power developer, AES Corporation announced that one of its subsidiaries has agreed to purchase all of PSEG Global’s interests in five jointly held businesses in Argentina. The purchase price for the transaction is $376m. Ninety per cent of the transaction will be seller financed by PSEG Global on a non-recourse basis.

AES will acquire interests in three distribution companies: a 30 per cent interest in distribution company Empresa de La Plata S.A. (Edelap); and 30 per cent of the distribution companies Empresa Distribuidora de Energia Norte S.A (Eden) and Empresa Distribuidora de Energia Sur S.A. (Edes). They have also acquired interests in two generation companies.

Shell abandons retail market

Shell Energy said it will drop out of the Ohio retail electricity market and would not participate in Texas’ planned deregulation programme when it starts in January 2002.

It said that the slow pace of deregulation would take too long for it to become profitable. It will seek another marketer for its 30 000 Ohio customers