Russia’s timetable for new national grid company

Russia’s new national grid company will be set up in three stages beginning with its registration as a 100 per cent subsidiary to United Energy Systems (UES) from whom it will inherit current transmission assets. The methodology for calculating transmission fees will have to be approved by the regulator.

The necessary reorganization within UES, personnel changes and preparation of grid contracts will take place during the first half of 2002.

In the third stage, from July 2002, the national grid company will start to operate and will begin redeeming transmission assets that are owned by regional energos.

The plans must be approved at a meeting of the UES board of directors to take place later this year.

According to the proposals for the new tariff regulation body – ETO in Russia – the new company will use the Federal Energy Commission as a platform to concentrate functions of the regional energy commissions, which regulate tariffs on the regional levels at present.

Private company formed for Qatar plant

The Gulf Arab state of Qatar has established the Ras Laffan Electricity Company Ltd., a private sector firm that will undertake the $700m water and power project.

AES Energy will hold a 55 per cent stake in the venture, while majority privately-owned Qatar Electricity and Water Company will hold 25 per cent. The rest of the equity will be equally held by state-run Qatar Petroleum and Kuwait-based Gulf Investment Corp.

The plant is planned to generate 430 MW of electricity from mid-2003, subsequently rising to 750 MW within three years, and produce 182m litres a day of water by desalination.

Qatar General Electricity and Water Corp (Kahramaa), a regulatory body set up last July to replace the ministry of electricity and water, will purchase output under a 25-year agreement.

Kahramaa is expected to operate on a commercial basis, eventually abolishing subsidies. Qataris are exempt from power and water charges, while expatriates and commercial establishments pay a subsidised tariff.

Seven banks finance Adwea 1500 MW power and desalination project

The Abu Dhabi Water and Electricity Authority’s (Adwea) 1500 MW Shuweihat 1 power and desalination project will be financed by a seven-strong consortium of banks and financial institutions led by Barclays Capital and Citibank. Financing of up to $1.2bn will be available towards the $1.6bn project.

The BOT contract was awarded earlier this year to a consortium of International Power and CMS Energy who together will own 40 per cent of the project on a 50-50 basis. The balance will be held by a special purpose company to be formed by Adwea.

Separately, Dubai’s Electricity and Water Authority (Dewa) is executing the second phase of its water desalination and electricity generation plant in Jebel Ali and will be appointing an international company to undertake the Dh2.1bn ($572m) project.

The plant will generate 880 MW of power and 180m litres of water by 2003. It will include three gas turbines along with three heat recovery boilers and two steam turbines to recycle the excess steam back into water, in addition to three units for water desalination.

Dewa is also in the process of completing a project to increase the efficiency of networks that supply natural gas to its power plants in Jebel Ali.

Privatization price cuts

The Czech power producer CEZ has announced 25 per cent price cuts for electricity sold to regional distributors from 2002. The cuts will strengthen the company’s position in the market at a time when bidding is underway for the 64 per cent stake in CEZ being sold by the government.

The privatization process is being rushed through with bidding having closed on September 10, 2001. The government’s recommendations on final bidders is expected in mid-December. The sale of energy assets will generate much needed cash for the Czech government which is facing a growing budget deficit.

CEZ has seen its market share decline in recent years as smaller suppliers have entered the field. Prices set by CEZ will be the lowest in the region for 2002.

Opposition to power plant sale

The president of Estonia has joined calls for the cancellation of a deal concluded with NRG Energy for the sale of the Narva power plants – responsible for 95 per cent of the country’s electricity generation. Prime Minister, Mart Laar has defended the plan which will allow for vital modernization.

Critics claim the deal is too secretive and contradicts a decision made by parliament in 1998.