Duke cancels three power projects in the USA

Duke Energy has suspended construction of three natural gas fuelled power projects in the western USA that were due to enter commercial operation by 2003. The announcement is representative of a trend that has spread throughout the USA following an economic downturn and the collapse of merchant generation and trading.

The Duke Energy suspensions will stay in place until market conditions pick up, which is not predicted to happen in the short term for the western region. The three plants concerned are the the 620 MW Grays Harbor Energy Facility and the 1200 MW Moapa Energy Facility in Clark County, Washington; and the 600 MW Deming Energy Facility in Luna County, New Mexico.

There is concern that the slowdown could lead to tight supplies when the US economy picks up. According to data by Platts Newgen, 90 000 MW of generation capacity was planned and 86 000 MW was shelved between January 2000 and July 2002.

Enron executive pleads guilty to charges

A former Enron executive has pleaded guilty for playing his part in money laundering.

Michael Kopper pleaded guilty last month after being questioned under the US government’s investigation into the Enron scandal. As part of a mercy plea, Kopper will cooperate with prosecutors and pay back $12m, but this may not be enough to keep him out of jail, where he could face a 15-year term.

US officials are content with the breakthrough, but admit there is a long way to go before the case can be fully unravelled. Kopper worked in Enron’s Global Finance unit and took a lead role in the formation of the off-balance sheet partnerships central to Enron’s collapse.

The partnerships were used to hide $1bn of debt and make Enron look financially healthier than it was. Reports allege that in one instance, Kopper earned $10.5m from an original investment of $125 000.

Sequestration project venture

Alstom is to help the US Department of Energy (DOE) develop and test new ways to capture and use carbon dioxide (CO2) emitted from coal fired power plants.

Alstom will evaluate new ways of capturing CO2 by firing coal in oxygen rather than air in advanced boiler designs It will also examine how feasible it is to sell the captured CO2 as a product.

Possibilities for this include injecting CO2 underground to recover oil reserves.

Ontario sets up trading system

ABB has finished a $70m contract to develop and integrate the IT systems for the trading desk for Ontario’s deregulated electricity marketplace.

The Independent Electricity Market Operator (IMO) is the hub of the marketplace, connecting 250 participants. The system uses ABB’s e-commerce infrastructure to enable participants to electronically submit bids and offers, and automatically receive real-time dispatch instructions and market information.

Brazil utilities seek state aid as debts mount

The weakening of the real and the impact of the power rationing programme has left Brazilian utilities in poor financial shape and they are now pressuring the state for financial support.

Distributors in particular are faced with severe cashflow problems. Light Servicos de Electricidade recently failed to make a BRL10bn ($2.7bn) payment to generator Furnas Centrais Eletricas, while PPL-owned Companhia Energetica do Maranhao (Cemar) filed in August for debt protection.

Brazil’s largest energy company, Eletropaulo Metro-politana, was granted a reprieve from creditors to delay a $225m loan repayment. The company owes $700m in loan payments due by the end of the year. The company admits it is feeling the financial squeeze along with all the other power plants in the country.

LADWP revamps substations

SchlumbergerSema has announced the signing of a contract worth $56m with the Los Angeles Department of Water and Power (LADWP) to provide consulting services and equipment to automate the utility’s existing electrical substations.

The project will be one of the world’s largest substation automation projects.

SchlumbergerSema will assist with the refurbishment of 179 existing substations and will supply two development/testing systems as well as a training simulator. The project is expected to commence this year and is expected to take up to five years to complete.

News digest

Brazil: Petroleo Brasileiro (Petrobras) of Brazil has awarded service contracts totalling more than $340m to GE Power Systems, covering nine GE gas turbines in three Brazilian power plants. Each of the agreements spans 12 years.

Brazil: Alstom has been awarded a ten-year operation support and maintenance contract for the Nova Piratininga power plant, located on the outskirts of Sao Paulo, Brazil. The total contract, worth around $127m, was placed by Petrobras, the Brazilian state-owned oil and gas company.

Brazil: Spanish energy company, Iberdrola, plans to build the biggest wind power generation park in Brazil costing about $175m. Iberdrola aides confirmed such plans and said the company was studying projects to generate more energy from wind in Latin America’s largest country.

Canada: A British Columbia lobby group has launched a lawsuit aimed at stopping the breakup and privatization of provincially-owned B.C. Hydro. The lawsuit was prompted by B.C. Hydro’s plans to outsource some of its services to Accenture. The lobby group claims that this step is the first towards the breakup of the utility.

Mexico: Mexico’s state-owned electric utility, the Federal Electricity Commission (CFE) said it is seeking bids to build a major hydroelectricity project in northwestern Nayarit state. The commission said it planned a 750 MW plant, which will include a 186 m-high curtain dam. Construction on the plant is expected to begin in January 2003.

USA: The US Department of the Interior’s Bureau of Reclamation has awarded GE Power Systems a $3.8m contract for a generator refurbishment project at the Grand Coulee power plant in Washington State. GE Power Systems will supply two identical 125 MVA, 13.8 kV generator stator cores and windings, which will improve generator reliability and maintainability.

USA: Kvaerner has been awarded the contract for construction of the planned Magnolia Power Project, a 250 MW natural gas fired, combined cycle power plant in Burbank, California. Work will be performed on site and from Kvaerner’s San Ramon, California office and the value of the total Kvaerner scope is around $112m.

USA: ABB has completed the turnkey delivery of $10m static var compensator for PG&E, the gas and electric utility in northern and central California. The new installation will improve the stability and reliability of the 230 kV network in the San Francisco/Silicon Valley area.