News digest

Brazil: The Brazilian government said it expects an investment of more than $10bn in electric power plants until 2007 to expand the country’s generation capacity by about 25 per cent.

Canada: Newfoundland-based energy company Fortis Inc. is paying nearly C$1.4bn ($1bn) to acquire Alberta and British Columbia electricity businesses owned by Aquila Networks.

Canada: Atco said it will build a $68m power line between Edmonton and Fort McMurray, Alberta, where new generating plants are being constructed to fuel multi-billion dollar oil sands projects.

Chile: A six year protest that has blocked the construction of the $570m Ralco hydroelectric dam in southern Chile has ended after four elderly women accepted $1.2m and 761 acres of land in exchange for allowing Endesa to flood their ancestral land.

Columbia: Columbia’s government has decided to privatize the natural gas transport company Ecogas to encourage rapid growth of the country’s natural gas sector.

Honduras: The Hounduran government has cancelled a 12-year, $477m contract to buy power from AES Honduras, a unit of AES Corp. Empresa Nacional de Energia Electrica claims that AES Honduras did not fulfil certain clauses in a 200 MW supply contract.

Mexico: Calpine and Mitsui & Co have won a bid to build, own and operate a 525 MW gas-fired power plant in Mexico. The project on the Yucatan Peninsula will deliver electricity to Comision Federal de Electricidad for 25 years.

Puerto Rico: VA Tech T&D won its first outdoor GIS switchgear contract in Puerto Rico. The contract, valued at nearly g1.65m and awarded by Prepa Utility, is for the Viaducto Isla Grande project in Puerto Rico and was signed in July.

USA: The North American fuel cell industry enjoyed a 71 per cent rise in revenues to $219m in 2002, up from $128m in 2001. But according to PricewaterhouseCoopers’ 2003 Fuel Cell Industry Survey, the sector also experienced operational losses as heavy spending on research and development continued.

USA: Aker Kvaerner’s North American Union Construction division, Kvaerner Songer, has signed a MOU with Hitachi America to construct MidAmerican Energies’ 790 MW Council Bluffs power generation unit in Iowa.

USA: Fluor Corp. has been awarded a turnkey contract by Brazos Electric Power Cooperatives to provide EPC and commissioning services for the 620 MW Jack County Generation Facility, near Texas.

Exelon to acquire British Energy’s AmerGen share

US-based Exelon Corp. will acquire British Energy’s 50 per cent interest in AmerGen Energy for $276.5m.

The deal would give Exelon sole ownership of AmerGen, whose assets include the 1017 MW Clinton power station in Illinois, Three Mile Island Unit 1 (840 MW) near Harrisburg and the Oyster Creek generating station (630 MW) on the New Jersey shore. The offer by Exelon matches an earlier one made by FPL Energy in September 2003, but under an agreement between Exelon and British Energy, Exelon has a right of first refusal to purchase British Energy’s AmerGen share.

Buying the asset will add 1250 MW to Exelon’s nuclear generating capacity, which at 15 000 MW accounts for around two per cent of US generating capacity. The company will remain as the third largest nuclear generator in the world. The sale is expected to be completed in the first half of 2004.

First sale of fuel cell plant in CA

Caterpillar and FuelCell Energy announced their first joint sale of an ultra-low emissions, 250 kW fuel cell power generation plant in California.

The acquirors, Los Angeles County Sanitation Districts will receive $1 125 000 from the California Public Utilities Commission, as part of an incentive for using the clean energy. The Districts are a group of independent special districts serving about 5.4m residents in LA county. Delivery is scheduled for late 2004. FuelCell Energy and Caterpillar signed an agreement to distribute and develop ultra-low emission fuel cell generation for industrial and commercial use. They agreed to jointly develop the fuel cell power plants within the 2.5 to 3 MW category.

Meanwhile FuelCell Energy is operating the world’s first fuel cell powered by coal mine methane. The DoE-funded project will mean the 2 MW plant will supply power to some 40 homes.

Brazil’s BDNES to fund power companies

Brazil’s development bank, BNDES, is to implement a BRL3.0bn ($1bn) capitalization programme to help improve the finances of the country’s power distributors.

BNDES will acquire ten-year debentures, convertible into shares, in the utilities that succeed in restructuring part of their liabilities. Around 18 distributors are currently thought to be candidates for the programme, and more could be added in the future. AES-owned Eletropaulo is not a candidate, although the group recently struck a deal with BNDES to restructure $1.2bn of debt.

The programme is designed to give companies a financial boost ahead of the new power sector model, which is expected to be announced this month. The 18 eligible distributors have a combined debt of around $10bn.

Canada restarts mothballed unit

Canada’s Ontario Power Generation (OPG) has restarted Unit 4 of its Pickering nuclear complex. The plant’s remaining three units are also expected to be restarted, although exactly when is unclear.

The reactors were taken out of service in 1997. OPG had planned to restart the plant in 2000 at a cost of C$1.3bn ($0.97bn). Bringing the first reactor on-line has cost an estimated C$1.2bn alone. Unit 4 of the plant reached 70 per cent capacity in late September and was expected to reach full capacity by October 2003.

The Ontario government has been warned that the state will suffer blackouts unless it moves forward with power industry restructuring. The government has delayed plans to sell OPG-owned plants and has also capped electricity prices.

Peru delays privatization plan

Peru has delayed the privatization of the 130 MW Yucan hydropower project in order to give potential bidders more evaluation time.

The government was scheduled to collect bids for the $262m project last month but has delayed the deadline until December 15, 2003. It expects to sign the contract on December 22, 2003.

So far, three companies have shown interest in the project and have prequalified: US-based Public Service Enterprise Group, Belgium’s Tractebel, and Peru’s Volcan Mining. All have agreed that the project must be online by mid-2005 since it is already partly complete. The minimum price for the concession has been set at $200m.

The plant is being constructed in the Pasco region. Some 60 per cent of the project has already been completed at a cost of $134m. The privatization has been delayed several times due to disputes between the regional and central governments over proceeds from the sale.