Energy companies scale back new plant developments
In the wake of the dramatic collapse of Enron and falling wholesale electricity prices, a trend has emerged among US power plant developers to cut back their new build programmes. The Energy Insight research group revealed that 18 per cent of announced US generating projects have now been scrapped or delayed.
Calpine Corporation said it would be placing on hold 34 advanced stage development projects in order to reduce capital expenditure by $2bn. Calpine forecast a long-term need for these power projects and intends to proceed with them when the economy improves.
PPL Corporation also said it would be scaling back on new generation capital expenditure. It intends to cancel about 2100 MW of planned development, blaming significantly lower long-term wholesale energy prices in the regions in which it operates.
Mirant Corporation, Dynegy Inc., and El Paso Corporation have also said they would scale back on some projects.
UBS Warburg wins Enron’s trading unit
The reorganization of Enron within Chapter 11 bankruptcy protection has continued with the sale of a number of its assets including Enron’s flagship wholesale electricity and gas trading business. UBS Warburg successfully bid for Enron Online, which generated most of the company’s $101bn in 2000 and accounted for 25 per cent of all trades in a market it helped pioneer.
A bankruptcy judge also approved the sale of Enron Wind Development Corporation’s two newly completed wind generating plants in west Texas for $175m to integrated utility American Electric Power Co. Inc. Enron Canada Power Corp. has sold its interest in electricity generated in Alberta, Canada for $135m to a partnership of AltaGas Services Inc. and TransCanada Energy.
Enron says that only 23 of its 3500 units are part of the bankruptcy filing and that it has continued to receive offers for turbines, power plant projects and emission credits.
Enron is facing numerous investigations and criminal inquiries, one of which is looking into allegations of document shredding. Kenneth Lay has stepped down as chairman of the board of Enron Corporation but remains a director.
Mexico-Guatemala power link to be completed by end-2002
The Inter-American Development Bank (IDB) is to fund the building of an 80 km, 400 kV grid interconnector linking Mexico and Guatemala. Technical studies are being conducted and both governments have agreed to complete the project by year-end.
The IDB said the agreement to build the line between a Mexican substation at Tapachula in southern Chiapas state and a Guatemalan substation at Los Brillantes, is part of the Puebla-Panama regional delelopment plan. The project is estimated to cost $30m.
Three generators kick off privatization in Brazil
The long-awaited privatization of Brazil’s power generation sector will start with the split-up of the country’s three largest state-owned generators. The privatization council has told the Brazilian Development Bank (BNDES) and holding company Electrobrás that they have until May 31 2002 to separate the different interests within Furnas Centrais Elétricas, Chesf and Eletronorte.
The government wants to initiate privatization after restructuring. It believes that dividing up the generators will encourage greater competition and an appreciation of the assets on capital markets.
BNDES said it will grant $2.3bn in compensation to companies for losses incurred during the rationing plan.
ABB has won an order from Venezuelan utility Enelven worth $28m to upgrade existing transmission lines serving the petroleum centre of Maracaibo. ABB is to design, build and commission five series compensation stations, one for each of five existing 400 kV transmission lines.
“Enelven is gaining a substantial and almost immediate increase in available power, at around one fifth of the cost of adding new transmission capacity,” said Richard Siudek, executive vice president and head of ABB Utilities division.
DOE funds gasification study
The US Department of Energy is to fund a feasibility study for an add-on fluidized bed biomass gasifier at Nebraska Public Power District’s 225 MW coal- fired Sheldon Station.
The study will be carried out by Black & Veatch and Energy Products of Idaho (EPI) and aims to integrate an EPI biomass gasifier with the existing coal boiler to replace 15 per cent of the coal with gas produced from waste wood.
Brazil: Celesc, the state-owned utility serving 1.7m customers in Southern Brazil has gained government approval to split into three subsidiaries under a holding company. The units will manage its power generation, power distribution and telephony businesses.
Canada: Ontario Power Generation has signed a licence agreement with Industrial Peer-to-Peer LLC, a subsidiary of Instep Software LLC, allowing it to install the eDNA real-time data system in its 77 power stations.
Canada: GE Power Systems’ new variable frequency transformer (VFT) will be installed for the first time at TransEnergie’s Langlois Station southwest of Montreal. The VFT interconnection, due to go into commercial operation in May 2003, will permit the substation to transfer an additional 100 MW of power to and from neighbouring power grids.
Guatemala: International Guatemala Operaciones, a subsidiary of Duke Energy, has appointed Finnish engineering group Wärtsilä to supply a 160 MW heavy fuel oil-fired power plant in San Jose in a deal worth $115m.
Hawaii: Mauni Lani Resort has deployed a sun-tracking 250 kW photovoltaic PowerTracker system supplied by PowerLight Corporation. In total Mauni Lani has 0.5 MW of photovoltaic systems – more solar electric generating capacity than any resort in the world.
Mexico: Alstom has received an order from TransAlta for a ST6/ST5 steam turbine combination for delivery to Chihuahua, Mexico. The turbine, with an output of just over 100 MW, will be used in a combined cycle plant and will be delivered in July 2002.
Uruguay: Bidding to supply up to 400 MW to the Uruguayan state utility UTE through the construction of a combined cycle plant will start in February. Union Fenosa of Spain, Central Puerto and Epec of Argentina and Skanska of Sweden are expected to take part.
USA: Houston-based Entergy Corporation has made its first investment in wind powered generation by acquiring a majority stake in the 80 MW Top of Iowa Wind Farm. 100 per cent of the electricity generated supplied to Alliant Energy under a long-term contract.
USA: The US Environmental Protection Agency has selected environmental service specialists CH2MHILL to help design a new national programme aimed at encouraging industrial companies to monitor greenhouse gas output and to set aggressive reduction targets.
USA: The $3bn acquisition of New York utility Niagara Mohawk by Britain’s National Grid has been approved by the Securities and Exchange Commission.