GLOBAL ROUND UP

The northern state of Maranhao decreed optional holidays for public administrations on each Monday in July, as wall as a one-hour cut in the working day, to help cut electricity use, said governor Roseana Sarney.

The aim is to cut electricity use in the public sector by an initial 15 pct, rising to 35 pct.

Maranhao is not participating in the national energy rationing program.

Bush to send comprehensive energy legislation to Congress [28 June 2001]

President George Bush said he is sending legislation to Congress today that will revamp and modernize the nation's energy infrastructure.

"Our nation must have an energy strategy," Bush said in remarks at the Department of Energy, "we must modernize an aging, decrepit old energy inefficient infrastructure."

Key aspects of Bush's energy plan, unveiled last month, will review energy exploration moratoriums on federal lands, seek to expand nuclear capacity, and include provisions intended to improve the country's electricity transmission grid and natural gas supply pipelines.

Bush said his strategy "goes beyond the stale debate of whether or not we ought to drill for natural gas in Alaska," adding that while he believes that energy companies can explore for gas and oil in Alaska without harming the environment, his energy plan intends to focus on a broad range of measures to boost domestic energy supplies.

"We must conserve and we must advance technologies that are smart," the president added.

Bush was at the Energy Department today to announce a series of grants totalling 85.7 mln usd which will be given to 18 organizations and five universities to conduct research and development on cutting edge energy efficiency and clean energy science technologies.

Among the companies chosen was Caterpillar Inc, which was picked for a 2.5 mln usd cost shared contract to design and build ethanol fuel cells.

California exempts oil refineries from electrical blackouts                 [28 June 2001]

The California Public Utilities Commission Thursday voted 5-0 to exempt the state's refineries from rotating electrical outages this summer.

Several of California's 12 refineries had petitioned the PUC for waivers after a commission rule in April failed to give them automatic exemptions from blackouts.

Gov. Gray Davis also had urged the PUC to ensure electric power for refiners (OGJ Online, June 8, 2001). Davis wrote, "The California Energy Commission, in their submittals to you, has pointed out that petroleum refineries are very sensitive to electricity curtailments. Even a brief disruption of electricity can force a refinery into total shutdown for weeks. As a result of curtailment, the production and supply of critical petroleum products such as gasoline, diesel and aviation fuels can be jeopardized for several weeks.

"The availability of petroleum-derived transportation fuels is critical to the public health and safety of Californians. Public safety agencies such as law enforcement, emergency medical care responders, and the military all rely on these fuels. Without petroleum fuels, the ability of these essential-use customers to perform their critical functions would be seriously impaired.

"In addition, as an industry, California's refineries are net producers of much needed electricity. Shutting down these facilities during rotating outages contributes to an even tighter electrical supply that should be avoided," Davis said.

Spain's Fenosa sole bidder for Mexico power plant                         [27 June 2001]

A contract to build the 450-megawatt La Laguna II power plant in north-central Mexico fetched just one bid, from Spanish power utility Union Fenosa, an official from Mexican state power company CFE said on Wednesday.

The CFE, which oversees about 98 percent of Mexico's power supplies, said Union Fenosa presented the only bid ahead of a June 20 deadline for La Laguna II offers.

The CFE will open Union Fenosa's economic offer on July 23 and study the bid, said the official, adding that the project would be awarded on Aug. 7 if Fenosa's bid is accepted.

The La Laguna II combined-cycle plant in Durango State will require an estimated investment of $320 million, the CFE official said.

Construction is programmed to start in February 2002 at the plant, which will be powered by natural gas. It is scheduled to come into operation in April of 2004.

Union Fenosa, Spain's third largest power utility, appears to be on the hunt for new Mexican power project, saying earlier this month it plans to boost its current 1,500 megawatt Mexico capacity to 5,000 megawatts in four years.

And Mexico is in dire need of new power supplies. Experts say Latin America's No. 2 economy could face blackouts by about 2004 if it does not drastically expand its 35,000-megawatt grid.

While Mexico has opened its largely state-run power sector to some private investment in recent years, officials have acknowledged that the nation must liberalize the industry further to lure new private investment.

Mexican President Vicente Fox is expected to submit an electricity power reform bill to Congress in September in order to pave the way to new private sector capital, which the government is hoping will pick up the cost of about half of the $50 billion Mexico needs in new power infrastructure over the next 10 years.

First New Power Plant In 13 Years Opens                                          [27 June 2001]

The first new power plant to come online in 13 years in California joined the power grid Wednesday in Bakersfield.

Gov. Gray Davis (news - web sites) said that the grand opening of the power plant could signal a turnaround for California's ongoing energy crisis.

But, according to CBS 2 News, Davis says that the state will still see blackouts this summer in spite of the added energy supply.

Another new power plant is also in the works in San Jose. The San Jose city council has approved construction of a new power plant, after rejecting the same proposal in recent months.

Great Plains Power Inc., a generation subsidiary of Kansas City Power & Light Co. (KCP&L) (NYSE:KLT - news), signed a memorandum of understanding with Babcock & Wilcox to develop and build up to five power plants in the Central U.S. in the range of 500 to 900 megawatts each, a Great Plains Power spokesman said Tuesday.

Great Plains Power is developing several sites that are suitable for coal-fired generation and is initially focusing on a site near Weston, Missouri, where the 670-megawatt coal-fired Iatan plant owned by KCP&L is located.

The new plant is expected to begin operating by 2005, the company said in a statement.

Great Plains Power will soon issue a request for proposals allowing interested parties to participate in the project by purchasing power from the plant, which will likely be sold in increments of at least 50 megawatts.

Company spokesman Tom Robinson could not provide any details on investment costs or the potential locations of other power plants.

``We're still in the permitting process. We're in the pretty early stages here,'' he said.

Great Plains Power, a wholly owned unit of Kansas City, Mo.-based Kansas City Power & Light, develops competitive generation for the wholesale market.

Siemens of Germany will supply equipment for two compressor stations for the Blue Stream pipeline worth over $20 million in 2002. Currently the company is designing the equipment. This will be followed by training of personnel and then the equipment will be supplied. Siemens won a Gazprom tender to participate in the Blue Stream project in 1998. Turkey will receive 16 billion cubic meters of Russian gas per annum through the Blue Stream pipeline. The pipeline will have a 370 km section along the bed of the Black Sea. Italy's ENI will also participate in the construction of the underwater section.

The Hungarian representative of French Electricite de France (EdF) has been accorded approval by the Hungarian State Privatisation Agency to buy the Budapest power plant. Electricite de France's subsidiary EdF International bought 87 per cent of the same plant in 2000, in a consortium with the Fin-Japanese Company, Fortun-Tomen. EdF also owns shares in Hungarian Demasz and Edasz companies.

Vattenfall sells South American assets to NRG                                   [9 June, 2001]    

Swedish state-owned power company, Vattenfall AB has decided to sell its South American interests to NRG Energy Inc. (NRG) of the US for an undisclosed sum. The divestment, to be conducted through subsidiary Nordic Power Invest (NPI), is part of Vattenfall's strategy to focus on its core operations in northern Europe. The deal includes NPI's shares in two power companies in Bolivia, namely Compania Boliviana de Energia Electrica SA - Bolivian Power Company Limited (Cobee) and Compania Electrica Central Bulo Bulo SA. Vattenfall will also sell its holding in Brazil's Itiquira Energetica SA. NRG has also agreed to purchase NPI's interests in two Peruvian assets, Cahua SA and Cementos Norte Pacasmayo SA (CNP). NPI owns 100 per cent of CNP and 60 per cent of Cahua. It has also been a 50 per cent partner with NRG in Cobee, Bulo Bulo and Itiquira plants.

Edf, E.ON, RWE, Tractebel seen as frontrunners for the CEZ stake   [2 June, 2001]

The privatisation of CEZ, the Czech Republic's national power utility, is likely to be completed by the end of the current financial year. The privatisation agency (Czech National Property Fund - FNM) was due to sign a contract with the strategic investor in June 2001. However, the plan may get delayed due to the long drawn process of choosing an advisor on the sale of the state's 64 per cent equity. Earlier, FNM had selected Deloitte & Touche and N.M. Rothschild to carry out the CEZ sale and Salomon Brothers International and Citibank to handle its counterpart in gas, Transgas. However, a separate cabinet committee later selected ABN Amro to carry out both sales, triggering a major dispute in the Czech government. In addition, the government's plan, whereby CEZ's shares will be lumped with majority stakes in six of the eight regional distribution companies has also led to difficulties and delays. CEZ has 10,150 MW of installed capacity, which is set to rise to over 12,000 MW once the second unit of Temelin's controversial nuclear plant comes on line. The frontrunners for the CEZ shares are Electricite de France, Belgian Tractebal and Germany's E.ON and RWE.

Bulgaria to sign power contracts with US firms                            [2 June, 2001]

Bulgarian cabinet has approved signing two power deals worth over $1.4 billion with US-based AES Corporation and Entergy. The deals are expected to be signed in early June 2001 and their implementation should start in October 2001. One of the projects will be a joint venture between the National Electricity Company (NEC) and Entergy to upgrade and operate an 840 MW coal-fired plant at Maritsa East Three section. Another project is a joint venture between NEC and AES Corporation to build a new, 670 MW coal-fired plant at Maritsa East One. The two Maritsa East plants are located at the biggest lignite coal-mining complex which generates 30 per cent of Bulgaria's power.

Siemens starts renovation work at Syrdarya TPP                        [2 June, 2001]

Siemens AG has started reconstructing the largest thermal power plant in Uzbekistan, the Syrdarya power plant. The reconstruction project, involving renovation and modernisation of two out of ten power units, will increase the plant's capacity by 600 MW. Current capacity at the Syrdarya plant is 3,000 MW. The reconstruction is to be completed by mid-2002. The project, estimated at $45.44 million, is partially financed by a $27.8 million loan from the European Bank for Reconstruction and Development. The plant is likely to be privatised by the end of the year. The state plans to sell 48 per cent of shares to foreign investors.

Termoelectrica signs contract with Electrica                                [2 June, 2001]

Termoelectrica has recently signed a contract with the Electrica electric power distribution company in order to grant daily supply of almost 300 MWh, for a price of 916,000 lei per MWh, meant for covering the electricity consumption, which was contracted by means of the competition market. The contract is valid till end 2001, but the price for the electric power supplied by Termoelectrica will be reviewed on a monthly basis. Termoelectrica sells electric power on the regulated market for a price of 827,750 lei per MWh, representing 85 per cent of the electric power transactions in Romania.

Brazilians get ready for long power                                                [29 May, 2001]

As Brazilians rushed to snap up power-saving lamps, candles and generators before the June 1 start of energy rationing, Government lawyers manned the legal barricades on Sunday in an effort to protect the plan.

Latin America’s largest country and biggest economy is in the grips of an acute electricity crisis and, under the Government rationing plan, must reduce power consumption an average of 20 per cent or face forced blackouts later this year.

Energy cuts for industry, commerce and homes are expected to brake economic growth, trigger layoffs, cut foreign investment and hurt Brazil’s trade balance.

At a meeting with consumers on Monday, lawyers and the taskforce set up to overcome the crisis have to convince the public to accept a decree that overrides consumer lights while rationing is in place. That measure was meant to prevent a rising wave of lawsuits against the plan, which imposes surcharges and even blackouts on those who do not cut power use, but it only set off yet more court challenges.

Brazilians are already taking action. Consumption so far in May in the Southeast has already fallen by eight per cent.

GE wins Termogaucha contract in Brazil                                        [23 May, 2001]

The US-based turbine manufacturer General Electric International has received a contract of over $100 million to supply equipment and associated services to a 500 MW Termogaucha thermal power plant at the Triunfo petrochemical complex in Rio Grande do Sul state. Termogaucha-Usina Termeletrica SA is the special purpose company that awarded the project, and is a consortium made up of Rio Grande do Sul's state owned power distributor CEEE, and oil and gas companies Companhia Brasileira de Petroleo Ipiranga, Brazil's state owned Petrobras and the local unit of Spanish oil company Repsol. The oil and gas companies are partners in the consortium that will supply the gas. Installation, commissioning and testing of the power plant is likely to be completed by the end of 2003. As per the contract, GE will supply two PG7241FA gas turbine-generators and one GE steam turbine for the plant. The contract also includes technical advisory services and training. The steam turbine will be provided by Hitachi of Japan, a GE business associate, and will be shipped in third quarter of 2002. The generators for the gas turbines will be supplied by Mitsubishi Electric Company of Japan.

Beijing Datang to increase stake in Kaiyuan JV                              [21 May, 2001]

Beijing Datang Power Generation Company has decided to increase its stake in the joint venture Yunnan Kaiyuan power plant to 70 per cent from 15 per cent. The company's new controlling stake in the plant will increase its investment from the original 80.7 million yuan to 376.6 million yuan. The company is likely to hold a special general meeting on August 14 to seek shareholders' approval on the joint venture. Total investment in the plant is estimated at 2.69 billion yuan. In January 2001, Beijing Datang signed an agreement to establish the plant with four other companies, Honghe Tobacco Factory, Yunnan Power Group Company, Yunnan Province Xiaolongtan Mining Bureau and Yunnan Province Development and Investment Company. According to the initial agreement, the equity interests held by the four other companies were 32 per cent, 19 per cent, 18 per cent and 16 per cent respectively. Beijing Datang was to hold the smallest stake of 15 per cent. However, in a supplemental investment agreement entered in May, the four companies agreed to reduce their stakes in the joint venture to 5 per cent, 10 per cent, 10 per cent and 5 per cent respectively. Construction of the new power plant is expected to begin in 2002. It will comprise two 300 MW coal fired generation units.

Industry Ministry approves the legislative framework for the new power exchange…                                                                                           [21 May, 2001]

Italy's Industry Ministry has approved the legislative framework for the country's new power exchange which is likely to start operations by early 2002 at the earliest. Energy Authority chairman, which has the task of regulating the new market, and the Gestore Mercato Elettrico or GME, which will operate the exchange, however, admitted that the dominant market position of state-controlled utility Enel risks distorting competition in the fledgling market. The officials were of the opinion that it would be better to start the exchange after Enel sells off its three generating companies, freeing up 15,000 MW of capacity and creating considerable market competition. Once the wholesale market is up and running, virtually all the power sold in Italy will go through the pool. According to the plan, the electricity exchange will be divided into five markets: a day-ahead market, an adjustment market, a congestion-management market, a balancing market and a reserve market. The day-ahead market will enable trading of electricity for hourly periods for the following day and the bulk of trading is likely to take place on this market. The exchange will eventually include derivative and risk protection products that will be traded in an over-the-counter exchange or a regulated market.

APV sells hydel power station to Innoventa                                 [May 17, 2001]  

Hungary's privatisation agency APV has sold country’s only private hydroelectric power station - Hernadviz Vizeromu - to the Hungarian Innoventa 2001, owned by the German Innoventa Energy AG.

The power station was previously owned by a retired teacher, who bought the station in 1997 for 200 million Hungarian forints. Subsequently, however, he could not invest anything in the station under the privatization agreement signed with APV.

Bulgaria to liquidate JV with Turkish Ceylan                                  [May 17, 2001]  

Bulgaria might liquidate the joint venture between cash-strapped Turkish construction company Ceylan Holding and the Bulgarian National Electricity Company (NEC) after the Turkish company refused to sell its stake in the JV.

The joint venture was set up for the construction of the Gorna Arda hydropower complex. Ceylan owns a 30.1 per cent stake of the joint venture company and NEC holds the remaining shares.

AES buys Ukrainian power firm                                                        [May 16, 2001]  

US-based AES Corporation has paid $45.9 million for a 75 per cent plus-one-share stake in Ukrainian regional power distributor KievOblEnergo. AES offered the highest bid, beating a rival offer by Electricite de France.

AES also won tender to buy 75 per cent plus-one-share stake in RivneOblEnergo, another regional power distributor. AES offered about $23.2 million for the stake in RivneOblEnergo as against the government's initial price of $18.6 million.

Ecuador to auction stake in distribution companies                   [May 16, 2001]

Two US-based companies and Spanish Union Fenosa have shown keen interest in participating in the auction of 51 percent of shares in Ecuador's state electric distribution companies.

The companies have time till the end of May 2001 to pre-qualify for the auction. The auction is scheduled for July 2001. Ecuador started off with an aggressive privatization campaign after signing a $300 million credit accord with the International Monetary Fund in April 2000.

VA Tech wins 100 million euro orders from China                        [May 15, 2001]  

Austrian engineering group VA Techologie has claimed that its VA Tech Hydro unit has won two orders in China worth a total of around 100 million euros. One order, from the Anhui Langyashan Power Company, is to build a 700 MW pumped storage power plant in the province of Anhui. The plant is likely to go into operation within four years.

The other order, from the Liuzhou Guiliu Hydropower Company, is for electro-mechanical equipment such as bulb turbines, generators and transformers for the Dapu hydropower plant in the province of Guangxi. Completion of Dapu power plant is scheduled for 2003.

Canadian firms ink $2.1 bn nuclear power deal                            [14 May, 2001]

In one of the largest transactions in Canadian history, Ontario Power Generation and Bruce Power announced the close of an eagerly anticipated lease agreement on the Bruce Nuclear Power facility in south-western Ontario.

The C$3.2 billion ($2.1 billion) deal will make Bruce Power, a partnership between British Energy Plc and Canadian uranium supplier Cameco Corp., the operator of the Bruce A and B stations until 2018, with an option to extend the lease an additional 25 years.

"Today's transaction is positive news for employees, the community, the electricity consumer and the nuclear industry," Ron Osborne, OPG president and chief executive officer, said in a statement.

"This agreement injects private equity into the Bruce facilities and represents a major step towards opening the Ontario electricity marketplace to competition."

The transaction had been widely anticipated since Canada's Nuclear Safety Commission announced it had approved an application by Bruce Power to operate the Bruce Nuclear Power stations.

The Bruce Nuclear Power stations include the four operating reactors at the Bruce B station, with a capacity or 3,140 megawatts, and the four inactive reactors at the A station, located about 125 kilometers (78 miles) northwest of Toronto.

Peru to sell control of 4 distributors                                                 [21 April  2001]

Peru's privatisation committee Copri will sell on the Lima stock market 70 per cent stakes in four electricity distributors in the north of the country, after local company Jorbsa decided not to exercise its purchase option for 30 per cent of the distributors. Gloria group subsidiary Jorbsa acquired 30 per cent of distributors ElectroNorte, ElectroNorteMedio, ElectroCentro and ElectroNoroeste in 1998, with the option to purchase a further 30 per cent. Copri's capital market privatisation committee (Cepri) will announce in the next few days the investment bank selected to advise the state on the sale.

Alliant to develop power plant in China                                          [21 April  2001]

Alliant Energy International, a wholly owned subsidiary of Alliant Energy Resources has recently announced a $14 million investment in an 80 MW cogeneration combined heat and power (CHP) plant project in China. The plant, Anhui New Energy Heat & Power Company is located in Bengbu City, Anhui Province. Bengbu Thermal Power Plant is the partner in the project. The cogeneration plant is the only CHP plant in Bengbu City. Steam from the plant is sold mainly for industrial production of synthetic citric acid, beer/liquor, chemicals, plastics, textile, matches, glass and nails. The investment also includes $1 million for upgradation of plant.

Posco to bid for Kepco generator                                                     [21 April  2001]

Pohang Iron & Steel Company (Posco) is planning to buy one of the power generation companies that were split from Korea Electric Power Corporation (Kepco). This was declared by the company in a recent press conference. The Korean government plans to privatise five non-nuclear power generation companies starting early 2002. To expand its energy business, Posco has recently taken a decision to increase the capital of its energy unit, Posenergy Company to KRW45 billion.