E.ON seeks US investment
Europe’s biggest power producer E.ON is looking to acquire a series of power assets in the US to establish its presence in the American Energy market.
Ulrich Hartmann, E.ON’s chief executive, revealed that the company had built up a €l40bn ($35bn) war chest. He said: “We plan to purchase two big American energy companies in the near future. We want to belong to the top energy providers in the US.”
Due to the cash pile and potential asset sales, Hartmann said it could fund acquisitions without tapping banks. He added: “In 2002 we want to sell the units VAW Aluminium, Stinnes, a logistic provider along with Degussa, E.ON’s speciality chemical arm and Viterra, a property service division.”
Following Enron’s demise, the acquisitions would make E.ON the largest electricity group if other US deals are approved such as the Powergen buy.
Endesa joins six power companies in Central America venture
Spain’s biggest power company, Endesa, has joined forces with six other power companies in a bid to link a $320m interconnection line through Central America joining Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama.
Empresa Propietaria de la Linea (EPL), the special purpose vehicle, will build, operate and maintain the 1880 km long network for the Central American countries. Endesa, which equally owns one-seventh of the new project, will take on general management duties.
During a shareholders’ extraordinary meeting, the countries involved inked a deal that ensured the implementation of a regional interconnection treaty. They created and developed two regional bodies: the Comision Reguladora de Energia and the Ente Operador de la Red, which will provide both financial stability and institutional coverage.
An official at Endesa denied its participation in the project as a means of taking a solid foothold of the US market. Fernando Edwards, Business development director, Endesa, Madrid says: “The reasons for getting involved in the project are not related with the US market. There will be opportunities to export electricity to neighbouring markets like Mexico, also trading and energy management opportunities once the creation of an interconnected central American market”.
US in emission talks with Canada and Mexico
The US, Canada and Mexico will continue their round of talks throughout this year to discuss the initial steps towards a permit trading system to reduce greenhouse gases in North America.
Private sector advisers have urged that a regional permit trading scheme, conducted under the North American Free Trade Agreement, be included in the plans.
According to a commission study, planned increases in electricity production could increase Mexico’s carbon dioxide emission by 76 per cent by 2007. Emissions in the US could rise as much as 38 per cent and Canada, 16 per cent.
Tractebel wins Brazil bid
Tractebel’s Brazilian subsidiary, Tractebel Sul Ltda, was awarded the concession to build, own and operate (BOO) a $245m, 241 MW hydroelectric power plant in Sao Salvador, by the Brazilian state.
The Belgium-based company offered yearly royalties of $7.4m for the concession. The plant is scheduled for operation by 2005 and power purchase agreements are expected to be concluded with the local distribution companies and industrial customers that are able to buy electricity directly from power generation companies.
The power will supply energy to the central-west and south-east electricity markets.
Tractebel has good relations with the Brazilian power authorities. It invested in a similar project four years ago, which saw it win the concession for the 450 MW Cana Brava project, which will be operational later this year.
Hydro to build Lake Erie line
A subsidiary of Canada’s Hydro Quebec, Hydro One, has teamed up with US-based Transenergie US to build a 975 MW high voltage direct current transmission project beneath Lake Erie between Ontario, Canada, and the US by mid-2004.
The project will link the Hydro One transmission system near Simcoe, Ontario with the American Transmission Systems network at Ashtabula, Ohio or the GPU Energy network at Erie West in Pennsylvania.
The new underwater links will have a bidirectional transmission and the option of connecting with both US terminals.
Elenor Clitheroe, Hydro One CEO, said: “The new interconnection will be funded totally via the sale of transmission rights with no impact on the regulated cost of transmission service in Ontario.”
Brazil: Centrais Elétricas do Norte do Brazil S.A (Eletronorte) has awarded MTU Maintenance Berlin-Brandenburg a $30m contract for maintenance, repair and engineering support for its LM2500 and LM6000 industrial gas turbines.
Brazil: Energy generator Gerasul is to invest R$88m ($37.5m) to increase the capacity of the William Arjona thermoelectric plant in Campo Grande – the first unit to receive Bolivian natural gas.
Brazil: The Brazilian authorities have been discussing the creation of a strategic energy reserve as part of their response to the country’s energy crisis. Mario Santos, the president of the electricity industry operators, indicated that electricity with no firm contracts could be used in a reserve system if the government guaranteed that this would be profitable for the companies concerned.
Canada: As part of a €23m deal, Austrian company NEM Energietechnik GmbH is to supply two heat recovery steam boilers of a vertical natural circulation design for the Brighton Beach CCPP project in Windsor, Ontario.
Canada: Hydrogenics Corp., a designer and manufacturer of proton-exchange membrane (PEM) fuel cell systems, has signed an agreement with Nextel Communications to demonstrate their new HyUPS regenerative fuel cell power generator at a site in California.
Latin America: Endesa is delaying the start of its Latin American investment programme until 2003. The company will spend the first two years of its five year investment programme focusing on improving group company efficiency.
USA: NRG Energy Inc. will buy four mainly coal-fired generating stations from FirstEnergy Corp. NRG will pay FirstEnergy $1.35bn in cash and will assume $145m in debts associated with the plants.
USA: Wärtsilä North America has won two contracts worth a combined total of $20m to supply its PeakingPlus gas turbine to a publicly owned utility in Shelton, WA, and to an investor-owned utility in Spokane, WA. Since its release one year ago, the gas-fired plants have become the fastest growing power product in the company’s 22-year history.
USA: Washington Group International Inc. is to head one of two teams which will provide construction services to support the stabilization and closure of the largest high-level radioactive waste project in the US. The two teams were selected by CH2M Hill Handford Group, which holds the prime contract to manage 204m l of nuclear waste in 77 tanks on the US Department of Energy’s Hanford site in western Washington.