CERA study says USA industry must change

A study of the US electric power industry by Cambridge Energy Research Associates (CERA), sponsored by consulting group Accenture, concludes that more change is needed if the US is to have a workable, deregulated marketplace for electricity.

The CERA study, which involved 40 energy companies, industry associations and regulators, points to twelve policy and structural changes that it sees as being the minimum needed if the sector is to overcome the current crisis of confidence.

One lesson is clear, according to the study. “Close is not good enough. Getting most but not all of the structural elements in place can still lead to major, even catastrophic failures.”

With an eye to the Californian power shortage, the study warns that problems of experimental deregulation have destroyed momentum in power restructuring and may cause a rebound to regulation.

Municipality blocks Ecuador utility sale

Ecuador’s plan to sell off 51 per cent stakes in 17 of its state-owned electricity distribution companies have been altered following public opposition and the refusal of the Quito Municipality to sell its blocking stake in Empresa Electrica Quito (EEQ). The sale of the ten Group A distributors, of which EEQ was part, has been cancelled but the privatization of seven coastal companies comprising Group B will go ahead on April 12.

Ecuador has been pushing the privatization of its electricity industry for several years and the sale of the distribution companies is designed to improve efficiency and stimulate investment.

To enhance the attractiveness of the utilities to investors, the state will assume $700m in debt belonging to the utilities.

Encouraging results from upgraded ECO technology tests

Powerspan Corporation has declared the initial results of testing of its upgraded Electro-Catalytic Oxidation (ECO) technology as encouraging and offering exciting potential.

A 1 MW pilot unit demonstrating the multi-pollutant control system for coal fired power plants at R. E. Burger Plant near Shadyside, Ohio, has reduced SO2 by 97 per cent and NOx by 90 per cent based on typical inlet NOx conditions.

Testing of the all-in-one, integrated ECO system, which is also designed to remove high percentages of mercury and fine particulate matter, has been jointly funded by Powerspan and FirstEnergy along with a $2.25m DOE grant.

A commercial ECO demonstration unit of approximately 50 MW is now being installed at the R.E. Burger Plant.

Rolls Royce wins Brazil order

Rolls-Royce has won a £25m ($35.5m) order for equipment in Brazil. The order includes a third RB211 Dry Low Emission gas turbine for a power station and is in addition to a new long-term service agreement valued at £11m.

The power station, built by Rolls-Royce at a fertiliser plant in Bahia, will be converted to combined cycle operation. The new equipment complements two RB211 units ordered in 2000.

The six-year service agreement will improve the plant’s cycle efficiency and operating economics of the station, which began operating in November last year.

Alstom wins mini-hydro order

Alstom has won a further order for its mini-hydro product, Mini-Aqua, in Brazil, bringing to over 50 the number of units since its introduction last summer. Half of these orders have gone to Brazil.

The latest contract is worth g22m and is to supply a 45 MW hydroelectric plant in the city of Ourinhos, San Paulo State.

The plant will consist of three 15 MW units, each incorporating Mini-Aqua technology in its PIT configuration. All the units are scheduled to be operational by the end of 2003.

Mini-Aqua is Alstom’s standardized solution with hydro turbine, generator and control systems integrated into a single optimized product.

Bush energy plans

President George W. Bush has introduced proposals for a comprehensive energy programme as well measures to address global climate change, a year after his rejection of the Kyoto Protocol.

The programme aims to reduce US dependence on oil imports, and gives a boost to gas, oil, coal, as well as nuclear and renewable energy.

The Bush Administration is unwilling to agree to mandatory pollution reduction targets while developing countries remain exempt. It proposes voluntary actions by utilities, clean technology development and market-based solutions such as emission trading.

News digest

Brazil: Portugal’s national utility EdP, along with Brazilian partner Grupo Rede, are to build a hydroelectric generator in Tocantins in Brazil requiring an investment of $370m. The generator will have total capacity of 452 MW and will be operational in 2005.

Brazil: United Technologies company, UTC Fuel Cells, will supply Brazilian energy company Petrobras with a PC25 fuel cell power plant to provide assured power at its research centre in Rio de Janeiro. The unit produces 200 kW of electricity and 900 000 BTU of useful heat per hour.

Brazil: The Brazilian state of Rio Grande do Sul has granted a preliminary licence for the $300m, 500 MW Termogaucha combined cycle plant project to be built at the Triunfo petrochemicals complex near Porto Alegre. Equipment and services are to be supplied by GE with Bechtel and Odebrecht reported to be in negotiations for the EPC contract.

Canada: Provincial regulators have agreed TransAlta Corporation’s request to build two 450 MW coal fired plants at its Keephills site 70 km west of Edmonton. Approval for the $1.8bn expansion was conditional upon compliance with stricter emission standards.

Chile: The Argentinean currency devaluation and consequent fall in electricity tariffs is predicted to cost Chile’s Enersis $112m this year, said the group. The lost revenue amounts to 18.7 per cent of its Latin America operations.

Curaçao: Alstom has signed a €23m contract with water and power utility Aqualectra Curaçao to upgrade the power transmission network on the Caribbean island, in order to accommodate 25 MW of power from the new Isla power plant, due for completion early 2003.

Mexico: Spanish energy group Iberdrola’s new strategic plan highlights Mexico as it main pillar of overseas operations. Power stations with over 5000 MW of installed capacity will be constructed by Iberdrola in Mexico within five years. Brazil will see 1800 MW of growth in the same period.

USA: Electricity and gas marketeer NewPower Holdings has been bought by Britain’s Centrica for $130m. NewPower, which was 43 per cent Enron-owned, reported net losses of $212m after taking a $110m charge for its exposure to Enron.

USA: Pennsylvania power company PECO Energy has announced its largest ever programme of capital investment. A sum of $200m will be spent on its electric and natural gas system in 2002 to ensure service reliability for customers.