Government approval secures Russia reform

The Russian government has taken an important step in the process of liberalizing its electricity industry with the approval of laws allowing for the listing of generating assets on foreign exchanges. The chairman of power monopoly Unified Energy Systems (RAO UES) and architect of the reforms Anatoly Chubais said in response, “The fight is over. I believe there is no chance for any political opponent to stop this programme now.”

RAO UES believes that new generating companies will need to be created through IPOs to meet an annual estimated rise in energy consumption of between 1.8 and 2.2 per cent until 2010 and that investment in the sector of some 2 trillion rubles ($74bn) is required. This investment programme would see an additional 20 GW of capacity being added, of which 17.2 GW would come from RAO with the balance from investors.

The reforms will see the separation of power generation from transmission assets.

Alternative energy axis formed

The governments of Georgia, Azerbaijan, Moldova and Ukraine have agreed to strengthen their alliance of 1997 and will undertake co-operation in the energy sector. The meeting in the Ukrainian capital of Kiev was also attended by representatives from Lithuania, Poland, Romania and Bulgaria.

The four lead nations are understood to favour diversification in energy and the creation of new delivery routes to Europe for Caspian oil and natural gas. The formation of the alliance arises from a desire to establish a genuine central European alternative to Russian energy domination.

UAE launches renewable energy park backed by energy giants

Abu Dhabi in the United Arab Emirates is to host a renewable energy research and development project in partnership with many of the world’s leading energy sector companies including BP, Shell, Total, Occidental, GE, Rolls Royce, Fiat and Mitsubishi. The Abu Dhabi government will donate 4 km2 of land for the so-called Masdar Initiative along with $100m for a “clean technology fund”, to encourage further investment by domestic and foreign companies in emerging technologies.

The Masdar Initiative will focus on energy and water conservation and developing alternative energy technology. The park will be a special economic zone for investors and developers of renewable technologies and products and an educational institute will offer graduates degrees in renewable and sustainable energy in partnership with leading UK and German universities.

Suez projects commence operation

Belgium-based Suez Energy International has reported the commencement of power deliveries from two major projects in the Middle East region.

In Oman, the first phase of the Independent Power and Water Project (IWPP) at the Port of Sohar, in which Suez has a 50 per cent stake, was completed. An initial generation capacity of 360 MW is now online with the plant’s full capacity of 585 MW and 6125 m3/hour of water desalination capacity scheduled for dispatch next April.

A 470 MW unit of Bahrain’s first IPP, the 950 MW Al Ezzel plant, has also begun operating. Suez is a joint owner of this project, which is scheduled for completion in May next year. Earlier this year, Suez acquired the Al Hidd power plant from the Bahrain government with a view to operating and expanding the facility to meet growing demand for electricity in the Kingdom.

Enel wins EMS privatization

Enel has won a tender for the Romanian power distribution company Electrica Muntenia Sud (EMS). EMS serves the capital Bucharest and surrounding regions and accounts for about 11 per cent of the Romanian electricity market.

Enel bid €820m ($1.04bn) for a 67.5 per cent stake in the company, with the price including both the sale of the shares and a capital increase. Enel has also recently bought power assets in Slovakia.

VA Tech Hydro supplies Ethiopia

Salin Costruttori, the turnkey supplier for Ethiopia’s largest hydropower station located on the Beles River, has awarded a supply contract to Austria’s VA Tech Hydro worth €70m ($88.4m).

The scope of the supply includes model test, design, manufacturing, transport, installation and commissioning of the complete electromechanical equipment including four vertical Francis turbines, digital governors and generators.

News digest

Bulgaria: AES Corporation has announced plans to begin construction of Maritza East I, a $1.4bn 670 MW lignite fired power plant in southeast Bulgaria. The plant will be built by Alstom and is scheduled to be completed in 2009.

Bulgaria: The Bulgarian government’s privatization Commission has agreed to sell the 1260 MW Varna coal fired power station near the Black Sea to CEZ of the Czech Republic for €306m ($386m).

Estonia: Work has begun in Estonia on laying the land section of the Estlink cable, the interconnector that will join the Baltic and Finnish electrical systems. The cable was manufactured in Sweden by ABB.

Kenya: A contract to supply 100 MW of temporary power to supplement the grid has been awarded to Aggreko by the Kenya Electricity Generating Company.

Latvia: GE Energy is to supply a Frame 9FB gas turbine-generator to the Riga Thermal Power Plant II. It will be the first application of 400 MW class F technology for combined cycle operation in Eastern Europe.

Qatar: ABB has won a $44m contract from General Electric to supply a substation and transformers for the extension of a gas fired power and water plant under construction near the Qatari capital of Dohar.

Rwanda: A 5 MW pilot project utilizing methane gas extracted from beneath Lake Kivu for power generation was began in April by Rwandan utility Electrogaz, with a view to developing the 35 MW Kibuye Phase 1 plant.

Saudi Arabia: Plans have been announced for the privatization of the Saline Water Conversion Corporation and for the establishment of a large IWPP in Jubail industrial City.

Sudan: Mott MacDonald has been appointed owner’s engineer by the National Electricity Corporation of Sudan for the development of the Khartoum North Phase III 2 x 100 MW extension.

Tanzania: GE Energy is supplying three JGS 616 GS-N.L Jenbacher gas engines to the Tanzania Electric Supply Company for a 6 MW power plant, forming part of the Songo Songo electricity infrastructure development project.

UAE: SembCorp Utilities has submitted a $1.7bn bid for the Fujairah independent water and power plant to the Abu Dhabi Water and Electricity Authority matching a similar bid from Suez Tractebel.

Ukraine: Mitsubishi Heavy Industries has received an order for two blast-furnace fired gas turbine combined cycle power generation units for Alchevsk Iron and Steel Works in the Ukraine.