Two major ordersfor microturbines
Capstone Turbine Corporation announced in December two major agreements for the sale of its microturbines throughout the USA. It signed a deal with Invensys Building Systems for the purchase of at least 100 turbines, and also sealed an agreement with Energy Co-Opportunity (ECO) to distribute turbines to electric cooperatives.
Invensys will serve as a national energy service provider of Capstone’s microturbines through its national network. It aims to focus on areas with power delivery problems, such as California, and will also integrate the product into its demand side management solutions.
ECO, a non-profit energy services cooperative owned by hundreds of electric utility cooperatives in the USA, has entered a contractual relationship with Capstone under which it will be the preferred provider of Capstone’s microturbines to the electric cooperative industry.
Invensys will purchase over 100 turbines over the next 12 months, while ECO has made an initial purchase order for 76 units.
Cesp Paraná sale fails
The planned privatization of Brazilian power generator Cesp Paraná was suspended in December after all six prequalified bidders pulled out of the auction. The six companies cited uncertainty over several unresolved issues surrounding the generator and asked the government to postpone the sale.
Electricité de France (EDF), Spain’s Endesa, Electricdade de Portugal (EDP), and AES, Duke Energy and Southern Energy of the USA all failed to deposit the required funds to guarantee their participation. The minimum asking price for Cesp, Brazil’s third largest generator, was R$1.74bn ($877m).
AES said that Cesp’s high debts combined with doubts over the licensing of the company’s main unit – the Sergio Motta power plant – led AES to reconsider its strategy. An environmental license for the expansion of the Porto Primavera hydropower station was also thought to be an issue. Endesa said that it would only stay in the bidding if the auction was postponed.
Cesp controls approximately 12 per cent of the country’s power generation market and represents one of the last chances for investors to buy into Brazil’s power market.
ISA shares offered
Colombia has opened an offer for the sale of shares in ISA, the country’s main transmission company. The offer, aimed at small investors, is unlikely to be fully subscribed due to low investor confidence and security problems affecting the power sector.
The government has placed 28 per cent of ISA under offer. Small investors can buy up to 300m shares at a discount, with a minimum investment of Peso500 000 ($234). The government, which owns 76 per cent of ISA, is planning to sell its stake in the utility in 2001 in line with International Monetary Fund requirements.
The government has sweetened the offer by guaranteeing dividend payment for two years, but ISA believes that the offer will only be one-third subscribed. Colombia is recuperating from a deep economic recession, and factions opposed to power sector privatization plans routinely blow up power lines.
AES, EDF gain control of Light
US-based AES Corp. and Electricité de France (EDF) have gained control of Brazilian generation and distribution company Light Servi?os de Eletricidade SA (Light) through the acquisition of stakes held by Reliant Energy and Companhia Sider#rgica Nacional (CSN). AES has also made further investment in Latin America through the acquisition of KMR Power Corporation for $53m.
AES and EDF announced in December that they had brought a 9.2 per cent stake in Light from a subsidiary of CSN for $362m. This followed an agreement to purchase all of Reliant Energy’s shares in the utility for $430m. In both deals, EDF bought 70 per cent of the stake and AES the remainder.
AES also acquired a 100 per cent stake in KMR Power Corporation, giving it a controlling interest in three natural gas fired power plants in Colombia.
California woes continue
California’s beleaguered power system continued to face problems in December as the state’s Independent System Operator (ISO) declared its first stage three emergency. Air quality regulators allowed the restart of several plants while the California Energy Commission expedited the approval of new power plants.
Blackouts have been narrowly avoided due to load shedding and emergency assistance in meeting peak demand. Utilities had been expecting the situation to improve over the winter as temperatures fell but water shortages, unusually cold weather and plant outages have prolonged the problem.
In early December, a stage three emergency – when power reserves fall below 1.5 per cent – was declared by the ISO. In mid-December, air quality regulators allowed the start-up of several power units in order to restore capacity lost through outages.