Enel to cement its position in Russia’s power sector
Speaking to the Financial Times, Fulvio Conti, chief executive of Italian utility Enel, has said that his company will invest in excess of €2bn ($3.15bn) in Russia over the next five years to strengthen its position in what he described as Europe’s biggest power market that offers the “largest opportunity”.
The company would use the funds to upgrade facilities at its OGK-5 power generation company, in which Enel holds a 60 per cent controlling stake, and commence production at the three gas fields it jointly owns with Eni by 2010. Conti told the Financial Times he expected Enel to achieve a return on investment “in excess of 13 per cent” once Russia liberalizes electricity prices to industrial customers, which it has pledged to do by 2011.
Enel paid €2.6bn for a 59.8 per cent stake in OGK-5, and late last month fulfilled a mandatory offer to increase its stake to a controlling one.
Conti confirmed that Enel is in talks to sell up to a seven per cent stake in OGK-5 to the European Bank of Reconstruction and Development and the International Finance Corporation for €305m, but would retain a controlling stake.
Many analysts have expressed concern over the risk to investors in Russian electricity companies because of Gazprom’s monopoly on the gas distribution network, but Conti is not worried. He said that Enel had pursued a strategy that would protect the company against gas supply risks because it has built a vertically integrated company via its 40 per cent participation in gas producer Severnaya Energiya.
Abu Dhabi faces power shortfall if no new plants are commissioned
According to the latest demand projections by the Abu Dhabi Water & Electricity Company (Adwec), Abu Dhabi will need to decide on commissioning a further power and water plant this year.
Abu Dhabi had expected to suffer a 774 MW shortfall in power capacity by 2012, but without any new plants being developed, the shortfall is expected to reach 2000 MW by 2013. At the same time, 46 million gallons a day (g/d) of desalinated water will also be needed by 2013.
This means the emirate will have to develop independent water and power projects because extending the lifetime of existing plants or installing additional gas turbines, as it has done in the past, will not be sufficient to cover the shortfall.
In 2007, Adwec forecasted Abu Dhabi would need a total capacity of 14 340 MW of power by 2020. In its latest forecast Adwec increased this to close to 17 500 MW.
Significantly, the data from Adwec demonstrates that Abu Dhabi will not have much capacity to spare until a new plant is built. The lack of spare capacity could have a direct impact on the northern emirates, which in 2007 imported 500 MW from Abu Dhabi.
Eskom continues power sector investment
Eskom, South Africa’s national electricity provider has awarded two large contracts as part of its ongoing capital expansion programme of its electricity sector to meet the countries growing power demand.
The first contract is for the supply of key equipment for the 4740 MW coal fired supercritical Bravo power station to be located in the Mpumalanga province, east of Johannesburg. The €1.3bn ($2.05bn) contract was awarded to Alstom, which will provide six 790 MW steam turbine and turbogenerator packages, six air cooled condensers and related auxiliary equipment, as well as all associated erection and commissioning services.
The second contract, worth $21m, was won by power and automation technology group ABB. The scope of the project is the design, manufacture, delivery, erection and commissioning of series capacitor banks at Sermula on the Beta-Delphi 400 kV transmission line and at Iziko on the Hydra-Poseidon 400 kV transmission lines.
The project, expected to be completed by mid-2009, forms part of the southern Grid Strengthening Project in the Eastern Cape.
Electricity sharing scheme mooted for East Africa
The East African ‘Northern Corridor’ countries of Kenya, Uganda and the Democratic Republic of Congo (DR Congo), Rwanda and Burundi are pushing for electricity grid interconnections, as well as cooperatively exploring new sources of energy as a way of addressing the power crisis that has hit the region.
Grid interconnections would be made to enable power flow from areas where power is in excess to areas suffering from electricity deficits.
Alstom bags Uganda hydro power order
Alstom Hydro, which a joint venture between Alstom and Bouygues, is to supply hydro and electromechanical equipment worth €160m ($252m) for the new 255 MW Bujagali hydroelectric power plant on the River Nile in Uganda.
Under the turnkey contract, Alstom Hydro will provide five turbine/generator units, control and protection systems and balance of plant. The project is scheduled for completion by 2011.
The run-of-river scheme will reuse the water released from two existing hydro plants: 180 MW Nalubaale and 200 MW Kiira.
Ethiopia:Energy minister Alemayehu Tegenu has called for Chinese companies to come and help develop the country’s large hydropower potential. Currently only three per cent is exploited.
Kuwait: Siemens Electric & Electronic Services, a German-Kuwaiti joint venture has been named the lowest bidder for the project to link the national control centre at Jabiriya with the GCC grid. The company submitted a price of KD13.4m ($50m).
Namibia: The Ministry of Mines and Energy is to develop a Nuclear Regulatory Framework that will pave the way for the construction of nuclear power plants and allow the enrichment of uranium to take place within the country.
Nigeria: The Director-General of the Nigeria Atomic Energy Commission, Dr Franklin Ereamo Osasai has confirmed that the country has taken initial steps towards the construction of its first nuclear power plant. It would begin commercial operation in 2018.
Nigeria: The House of Representatives Committee on Power and Steel has begun an investigation into how approximately $16bn was allegedly wasted on the Nigerian power sector between 1997 and 2007. To date the committee has traced around $13bn of the total.
Qatar: A consortium of Belgium’s Suez Energy International and Japan’s Mitsui & Company has signed the contract for the Ras Laffan C independent water and power project in Qatar. The power and water produced will be bought by Qatar General Electricity & Water Corporation.
Saudi Arabia: KEC International has won a turnkey order worth close to $121m from Saudi Electric Company for the construction of a 380 kV overhead transmission line, which will have a total length of 268 km.
UAE: Areva has signed a €150m ($236m) deal with DEWA for the delivery of two high voltage (400 kV) substations in Dubai. The contract was awarded in partnership with Hyundai Heavy Industries, which will supply four power transformers.
Uganda: Tullow Oil has agreed with Jacobson AS Elektro of Norway to build an 85 MW heavy-fuel oil thermal plant in Hoima, where it plans to build a 4000 barrels-a-day refinery. The power will be fed to the national grid.