R-R breaks into Brazil

Industrial group Rolls-Royce has announced its first contract in the Brazilian power market – a £30m ($43m) order to construct a combined cycle power plant in Bahia state.

Rolls-Royce won the contract from Electridade de Portugal (EDP) which is developing the plant at a Petrobras fertilizer factory site at Fafen. EDP’s local Brazilian company Energen will operate the plant, which will supply power and steam to the Petrobras facility and to other industrial users.

John Gaskell, President of Energy Business for Rolls-Royce, said: “This order is an important energy contract for Rolls-Royce and represents a significant breakthrough into the Brazilian market.” Rolls-Royce will supply two RB211 Dry Low Emission gas turbines to fire a heat recovery steam generator and a steam turbine.

FERC urged to order refunds

One of California’s three utilities which has suffered as a result of the price spikes in the market this summer has asked the Federal Energy Regulatory Commission (FERC) to implement price controls to protect consumers from high prices. The move came after FERC published its findings on an investigation into the market.

San Diego Gas & Electric (SDG&E) made a filing in November that it believes would help to protect customers and improve the operation of the market. The utility has proposed a capping mechanism based on generators’ actual costs to replace FERC’s ‘soft cap’ of $150/MWh on wholesale power prices, and also advocates issuing customer refunds where electric rates were out of line with competitive market rates.

In a November report, FERC stated that rates in California over the summer were neither just nor reasonable.

Valle de Mexico to be repowered

Mexico’s Comision Federal de Electricidad (CFE) has awarded a $216m contract to repower Unit 4 of the Valle de Mexico thermal power plant to Alstom. The project will increase the unit’s output from 300 MW to 550 MW and the unit will be the first combined cycle plant in Mexico able to operate in pure combined cycle or hybrid mode.

Alstom Power will supply three 115 MW GT11N2 gas turbine generator units, three heat recovery steam generators, associated systems and a high voltage switchyard. The turnkey contract also includes site preparation, civil works, erection and commissioning.

The project will involve interconnection of the new equipment with an existing boiler and steam turbine on site. Hybrid operation involves running the gas turbine generator sets at base load while running the boiler at part load to ensure that the steam turbine runs at full load. The plant will be fully operational in 2004.

  • Alstom and Sithe Energies have completed the financing of the second phase of the 460 MW generating plant at Taumin in Mexico. The total cost of the project is $700m – the largest single generation project in Mexico so far.

Brazil orders 4600 MW

Brazilian energy companies have placed orders with GE Power Systems of the US for gas turbines, additional equipment and services worth a total of $1.5bn. The orders, for 4600 MW of capacity between 15 projects, are part of the country’s plans to add 15 GW of additional power capacity by 2001.

GE has taken orders for 54 gas turbines in recent months, including 29 LM6000 aeroderivative gas turbines, 19 F technology machines and six 7EA technology units. Of the 29 LM6000 units, 16 are being purchased by El Paso Energy for a project in Macae.

Brazilian oil group Petrobras is developing four of the projects. GE will supply the company with eight 7FA units, four for two projects supplying power to Petrobras refineries, and four for a plant in Cubatao.

AES launches offer for Gener

US-based AES Corporation has launched a tender offer for an 80 per cent stake in Chile’s second largest power generator, Gener. If successful, the $1.056bn deal will enhance AES’ position in Latin America following its acquisition of Venezuelan generator EDC earlier in 2000.

AES plans to acquire all Gener American Depository Shares as well as Chile-listed shares. Copec, Gener’s largest single shareholder with a 19.7 per cent stake, has agreed to tender its shares.

Gener controls power assets in Chile, Argentina, Colombia and the Dominican Republic. In October it agreed a deal with French oil company TotalFinaElf to issue new capital and divest the majority of its Argentine assets. AES has stated that its offer is conditional on this deal not taking place, and has reached an agreement with TotalFinaElf to this effect.

AES and TotalFinaElf have agreed that if AES’s offer for the Chilean company is successful, Gener will sell all of its Argentine generation and transmission assets to TotalFinaElf for approximately $652m.