Utilities count cost of CAIR ruling as PPL makes $100m charge

PPL Corporation became the first US electric utility to quantify the cost to its business of the US Court of Appeals ruling of 11 July invalidating the Clean Air Interstate Rule (CAIR), when it announced an impairment charge of around $100m related to emissions allowances.

Estimates have put the total loss of value from SO2 emission allowances under CAIR at around $15-20bn with NOx allowance values put at a further $21bn. In addition, utilities have invested heavily in retrofitting plants for the 2009 NOx and 2010 SO2 requirements, according to Francisco Padua from Amerex Brokers.

For once, the power industry and environmentalists have been united in decrying the unanimous ruling, which blocks the Environmental Protection Agency’s (EPA) cap-and-trade programme for utilities emission allowances for sulphurous and nitrous oxides.

The EPA has claimed that CAIR would have prevented about 17000 premature deaths each year and saved up to $100bn in health benefits, but the District of Columbia Circuit court found that the EPA had overstepped its bounds by calling for stricter standards than the amendments in the Clean Air Act enacted in 1990.

Provinces take the lead in driving Canadian climate change policies

Canada’s provincial and territorial leaders have agreed to implement policies aimed at tackling climate change, although a single strategy to reduce greenhouse gas emissions remained elusive.

The leaders committed to a 20 per cent increase in energy efficiency by 2020 in their provinces and territories and to boost energy conservation efforts to lower consumer power bills, emissions and overall demand. Ontario announced it was joining the Western Climate Initiate, a regional cap-and-trade system involving British Columbia, Manitoba, Quebec and seven U.S. states.

Alberta announced the creation of a CAN$2bn ($1.98bn) fund to advance carbon capture and storage projects.

FPL taps into “Sunshine State” resources

Florida Light & Power (FPL) has received approval from the Florida Public Service Commission to start building three solar energy centers that will make Florida the second-largest supplier of utility-generated solar power in the USA.

The approved projects include 25 MW photovoltaic facility in DeSoto County – the world’s largest PV project – and the Martin project, which will provide up to 75 MW of thermal capacity in a hybrid design connected to a combined-cycle power plant.

Brazilian dam project faces cross-border opposition

The Brazilian government is facing opposition from indigenous groups in both its own country and neighbouring Bolivia to its plan to construct the Madera River hydroelectric complex.

Bolivian residents in the northern Amazon fear the Jirau and San Antonio dams constructed in Brazil may unleash environmental harm and thus devastate their lands.

If fully developed, the two main dams of the Madera project could have a capacity of up to 6450 MW plus locks for a 4200 km waterway, making it the largest project in Amazon history. The complex would cost more than $9bn and contracts for the construction of the San Antonio dam have gone to a consortium led by the government-owned company Furnas de Brasil and the construction group Odebrecht.

Opposition groups meeting in June declared an emergency and called on the Bolivian government not to negotiate or sign any type of agreement with Brazil. Meanwhile an independent environmental engineer researching the potential impact of the scheme in northern Bolivia has said that the environmental costs could outweigh the benefits.

Green light for TransCanada NE wind project

TransCanada Corporation has won final development plan approval for its 132 MW Kibby Wind Power Project located in Franklin County, Maine.

The project will consist of 44 wind turbines, each with a capacity of 3 MW, supplied by Vestas of Denmark.

The capital cost is estimated at $320m and the project will be the largest wind power development in New England.

The project recently received approval from the towns of Carrabassett Valley and Eustis for portions of the 115 kV transmission line that will connect the project to the ISO New England electrical grid.

Midwest starts injection at sequestration project

The Midwest Geological Sequestration Consortium (MGSC) has started injecting CO2 into the coal seam at its Wabash County II pilot project.

The MGDC is one of seven regional partnerships created by the US DoE to develop carbon sequestration technologies and it is the first to make such an announcement. The Phase II project is testing the viability of turning unmined coal deposits into a source of useable energy by extracting coal bed methane, trapped in the coal.

•••

Brazil: Tractebel Energia has purchased the shares in two small hydroelectric power plants in Mato Grosso state from Electrobras for 314m BRL ($199m), which through a PPA will continue to supply electricity to Electrabras until 2027.

Brazil: Alstom has secured maintenance contracts worth €85 ($133m) for a combined cycle plant that it is building for ThyssenKrupp CSA Siderurgica do Atlantico alongside a new steel mill in the industrial area of Santa Cruz, scheduled for completion in the summer of 2009.

Brazil: Brazil’s Mining and Energy Ministry is negotiating to build a 350 MW coal fired power plant in its southern Rio Grande do Sul state in cooperation with Uruguay.

Canada: Boralex has acquired the rights for a wind project in Ontario with potential capacity of 100 MW, under the Ontario Power Authority’s drive to develop 2000 MW of renewable energy.

Uruguay: Uruguay has received the promise of up to 72 MW of free hydroelectric power a day from Brazil during its period of winter peak demand, which it has agreed to return when winter demand eases.

USA: Three US utilities, El Paso Electric, Xcel Energy and Tri-State Generating and Transmission Authority, have issued a Request for Proposals for a solar parabolic trough project to be located in New Mexico to supply each of them with power by 2012.

USA: ABB has signed an agreement to acquire US transformer company Kuhlman Electric Corporation from The Carlyle Group for an undisclosed sum. Kuhlman has annual revenues of $250m and employs around 800 people.

USA: The Florida Public Service Commission has approved Progress Energy Florida’s plans to build two nuclear power plants at a site in Levy County. A final decision about whether to go ahead with the projects will be made by Progress Energy early next year.

USA: The Public Utility Commission of Texas has approved an application by AEP subsidiary Southwestern Electric Power Company (SWEPCO), to construct a 600 MW coal fired power plant in Hempstead County in Southwest Arkansas. SWEPCO will have 72 per cent stake in the $1.52bn facility.