HRW Briefings

COMPANY NEWS

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Belgium to upgrade units on Meuse River

Belgium utility SPE N.V. plans to upgrade hydropower units on the Meuse River in southern Belgium.

SPE operates seven projects totaling 65 MW. Six are on the Meuse – Ivoz-Ramet, Monsin, Ampsin-Neuville, Andenne, Lixhe and Grand-Malades. The seventh, Floriffoux, is on the Sambre River.

SPE seeks design, delivery, assembly and commissioning of hydropower units at SPE sites on the Meuse. It said the project is to include disassembly of existing units.

The utility also seeks changes in existing civil structure and construction of new civil structure supporting new units at SPE sites on the Meuse.

GE acquires 90% of Converteam

GE Energy has entered into an agreement to acquire about 90% of Converteam, a provider of electrification and automation equipment and systems, from a controlling shareholder group that includes management, Barclays Private Equity and LBO France, for about $3.2 billion.

The transaction, endorsed by Converteam’s management team and employee representative groups, is expected to close during third quarter 2011, subject to customary closing conditions. Converteam is based in Massy, France.

Converteam’s senior management will retain about a 10% stake in the company. GE and Converteam senior management have entered into agreements pursuant to which GE would purchase the remaining shares in the company over the next two to five years. The price for the shares can vary based on the time of sale, business performance and other factors. GE expects that the price should be no greater than about $480 million.

Converteam’s portfolio includes drives and other power electronics, rotating machines, generators and controls.

Japanese firms plan consolidation of generation system business

Hitachi Ltd., Mitsubishi Electric Corporation and Mitsubishi Heavy Industries Ltd. announced that they have entered into an agreement calling for the three companies to consolidate their hydroelectric power generation system operations.

Discussions have been under way since 2010, when a basic agreement regarding the hydropower business consolidation was reached.

The three companies agreed to establish a preparatory company in May 2011 as a subsidiary of Hitachi and to transfer their hydroelectric power generation system operations to the preparatory company by way of simplified company split.

The companies reached a common recognition that the most effective means to strengthen and expand related business would be to pool their respective operating resources and engage jointly in hydroelectric power generation system operations.

Mott MacDonald expands renewable energy presence

Mott MacDonald, a global management, engineering and development consultancy, is expanding its renewable energy presence in North America with the opening of a dedicated office in Boston, Mass., and the appointment of a vice president for the firm’s renewables division.

Tremain Tanner has been appointed as vice president, Renewable Energy, Mott MacDonald reports. Tanner brings experience in the development of private sector renewable energy projects in wind, hydropower, wave and tidal, biomass and landfill gas.

CONTRACT AWARD

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ABB wins transmission orders in China, India

ABB has won an order worth about US$120 million to engineer and supply key equipment for the Jinping-Sunan 800 kV ultra-high-voltage direct current transmission project of the State Grid Corporation of China.

The 2,090 km power link will transport hydropower from Sichuan province in central-western China to the highly industrialized coastal area in the eastern province of Jiangsu. The UHVDC link will have a rated capacity of 7,200 MW and is expected to be energized in 2013.

The system and key equipment will be designed in close cooperation with SGCC and local Chinese partners, and ABB will also supply key components for both converter stations, including converter valves, the control and protection system and DC yard equipment.

In March 2011, ABB was selected by Power Grid Corp. of India Ltd. to deliver a UHV transmission system, worth about $900 million, to supply hydropower from northeastern India to the city of Agra over a distance of 1,728 km.

ABB was chosen to execute the North-East Agra transmission project together with BHEL, a leading Indian equipment manufacturer. BHEL will deliver the remainder of the project, worth more than $1.1 billion. The order will be booked on completion of financing requirements.

The UHVDC link operating at 800 kV will have a converter capacity of 8 GW, the highest ever built. When operating at full capacity, the link will be able to supply enough electricity to serve 90 million people based on average national consumption.

Dam monitoring contract awarded in Bosnia

Utility Elektroprivreda of Bosnia and Herzegovina has awarded a contract to Austria-based Strabag AG to rehab-ilitate and modernize the dam safety monitoring system of three hydro projects in Bosnia and Herzegovina. The contract is valued at €2.98 million (US$4.7 million).

Elektroprivreda BiH seeks supply, delivery and installation or rehabilitation of monitoring equipment for the 181.2 MW Jablanica, 57 MW Grabovica, and 210 MW Salakovac projects. Work is to include reconstruction of geodetic marks and installation of geodetic equipment, as well as implementation of a statistical and mathematical monitoring model and related data acquisition system.

The European Investment Bank approved a loan to Bosnia and Herzegovina for rehabilitation of hydro plants and electricity distribution systems as part of the Energy Community of Southeast Europe APL 3 Project.

Toshiba to overhaul pumped-storage plant

Toshiba Corp. announced that its subsidiary, Toshiba International Corp., has signed a contract with Consumers Energy and Detroit Edison for the overhaul of equipment at the Ludington pumped-storage plant in Michigan. The contract has a value of about US$500 million.

Ludington was built between 1969 and 1973 and at that time was the world’s largest pumped-storage plant.

The scope of work covers the replacement of six 312 MW pump turbines and upgrades of their motor generators and associated equipment and will boost capacity up to 50 MW per unit. Installation of the new equipment will start in June 2013, and all units are expected to be commissioned and on line by the end of 2019.

FINACE

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NIB to finance plant in Iceland

The Nordic Investment Bank (NIB) will provide a loan for Iceland utility Landsvirkjun to finance a new hydro project in southern Iceland, the bank announced.

NIB is the common international financial institution of the eight Nordic and Baltic countries.

The 16-year maturity loan totaling US$70 million (€52.5 million) will help build the 80 MW Budarhals plant, which is expected to produce 585 GWh of electricity annually. Landsvirkjun plans to hire a company to provide construction supervision of civil works for the project.

Landsvirkjun took bids in 2010 for construction of major civil works of Budarhals on the Tungnaa and Kaldakvisl rivers. The project includes Spordalda Reservoir, two rockfill dams, a spillway, a 4 km headrace tunnel, a surge basin, steel-lined penstocks, a tailrace canal and a concrete powerhouse containing two Kaplan turbines.

USAID provides rehab funding for Tarbela

The United States Agency for International Development (USAID) has released US$6.66 million to the Pakistan Water and Power Development Authority (WAPDA) for repair and rehabilitation of the Tarbela station.

USAID signed an agreement with WAPDA to provide assistance amounting to US$16.5 million for 3,478 MW Tarbela Power Station. The assistance is to be used for repair and rehabilitation of three units in the powerhouse.

Rehabi of the units will add another 60 MW to the installed capacity of Tarbela. Major activities include replacement of class B stator winding with class F insulation winding. The work is expected to be completed by end of 2011.

Zambia secures loan to upgrade plant

Zambia has secured a loan of US$50 million from India’s government to develop the 120 MW Ithezi Thezi project.

The loan, secured through TATA Africa, will be used for rehabilitation of the hydro plant through an equal stake joint venture between Zambia’s Electricity Supply Corp. Ltd and TATA Africa.

The funding is part of the US$240 million required to enhance Ithezi Thezi and provide an additional 120 MW of power.

Under the agreement, Zambia’s state power utility and TATA Africa are expected to ensure the plant is rehabilitated and commissioned before the end of 2011.

Papua New Guinea secures ADB loan for hydro plants

The Asian Development Bank (ADB) has agreed to a US$57.3 million loan to Papua New Guinea’s state power utility, PNG Power Ltd, to fund new renewable energy projects, including run-of-river hydro plants and transmission systems, ADB reports.

The ADB loan is part of a broader Town Electrification Investment Program approved by ADB in late 2010 that will improve the power supply in provincial urban centers by replacing diesel power generation with renewable generation. It will also establish transmission links along major population corridors that will boost connectivity outside the main provincial centers and help address a significant investment hurdle for provincial governments responsible for rural electrification. The total cost of the program is estimated to be $150 million.

The projects to be implemented under the first tranche of funding include run-of-the-river hydro plants in Northern Province and the Autonomous Region of Bougainville, as well as a 66 kV transmission line in West New Britain.

Japan to help finance plant in Vietnam

Nippon Export and Investment Insurance (NEXI) of Japan will provide US$50 million as Overseas United Loan Insurance to Vietnam to build the 42 MW Bac River plant in the northern Ha Giang province.

A contract to this effect was signed in February 2011 between NEXI and the project’s investor, the Bac River Hydro Power Joint Stock Co., wire services report.

The loan will be provided through Sumitomo Mitsui Banking of Japan with a period of 14 years, including a five-year grace period.

The Bac River Hydro Power Joint Stock Company is the first private Vietnamese investor to have received such kind of loan, reports indicate.

ONLINE REPORT

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Two new plants operating in Brazil

Brazilian utility sector regulator Aneel has authorized test operations at the 51 MW Sao Jose and 11.4 MW Areia hydro projects, Business News America reports.

Alupar owns Sao Jose, in the southern state of Rio Grande do Sul. The plant will be allowed to test Unit 1, which has a capacity of 25.5 MW.

Local firm Areia Energia owns Areia, in the northern state of Tocantins. The project will be able to operate commercially after test results are submitted.

Mpanga plant commissioned in Uganda

The 18 MW Mpanga project in the Kabeeza Kamwenge District of Uganda began operating in February 2011.

Electricity from the project is being sold to the national grid and distributed to local communities, state minster for energy Simon D’Ujanga said during commissioning. He said the power will boost industries in the region, including cement, tea, cobalt and agro-processing. It will also light hospitals, schools and community centers.

The project was developed by the South Asia Energy Management System. In 2008, the government partnered with African EMS Mpanga to start off the project.

POLICY

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Scottish government announces changes to hydro planning

The planning process for hydroelectric schemes is set to be simpler and quicker, the Scottish government reports.

Starting in June 2011, new applications up to 50 MW will be determined by councils rather than ministers. Currently, hydro schemes greater than 1 MW are decided by ministers. The changes will bring hydro into line with the thresholds for determining wind farms, the government says.

The changes follow a consultation carried out from September to December 2010. An order to change the threshold back to its original level has been laid in Parliament.

From June 1, new applications for hydro plants with capacities oof 50 MW or below will be for planning authorities to determine. The Scottish government is processing three applications for hydro schemes.

REEEP calls for project proposals in new funding cycle

The Renewable Energy and Energy Efficiency Partnership opened its 8th program cycle with a call for energy projects targeting Brazil, China, India, Indonesia and South Africa.

The partnership expects to fund about 30 projects with €4.5 million (US$6.56 million) contributed by the governments of the UK and Norway. Funding available per project has been increased by 50% to €150,000 ($218,600).

Preference will be given to proposals that address key barriers to the uptake of renewable energy and energyefficiency. Proposals covering one of the following four program priorities will have funding priority:

– Promotion of successful and innovative business models for clean energy solutions;

– Supporting innovative financing approaches including clean energy finance facilities and instruments;

– Clean energy policy support for national and regional governments to accelerate the development of the RE and EE markets; and

– Strengthening of energy regulatory mechanisms and standards such as building codes, grid codes and appliance standards and labeling.

The application process is being streamlined and the final project selection will take place by the end of June.

PROJECT DEVELOPMENT

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Panama developing 16 projects

Panama has begun developing 16 hydro projects with a total investment of more than US$1 billion to satisfy domestic power demand.

The new projects should add 700 MW of capacity to the power grid of the Central American country, according to People’s Daily Online. These private sector projects are expected to be completed by 2015.

In other news, Brazilian state-run utility holding group and hydro generator Eletrobras will open an office in Panama as part of its internationalization process, a spokesperson for the company recently told Business News Americas.

This will be Eletrobras’ third international office. The group opened offices in Uruguay and Peru in 2010.

Peru opens renewables auction

Peru’s supervising agency for investment in energy and mining opened its second solicitation for electricity from renewable energy sources including small hydropower in April 2011.

Organismo Supervisor de la Inversion en Energia y Mineria (OSINERGMIN) held its first renewables auction in December 2009. Business News Americas reported by February 2011 that seven hydropower and one biomass plants were in operation as a result of that sale.

OSINERGMIN currently seeks 681 GWh from hydroelectric projects of no more than 20 MW each and 1.3 TWh from tidal, biomass, wind, solar and geothermal projects of similar size.

RusHydro plans pumped-storage plant

Russian hydropower producer RusHydro will start building a pumped-storage plant in the Leningrad Region of Russia some time between September and November, wire services report.

The plant will have a capacity of 1,560 MW and is expected to produce 2.9 TWh annually. The plant is to be 100 km from St. Petersburg.

Construction advances in Brazil

Work is under way to develop two projects in Brazil: the 334 MW Simplicio complex and 11,200 MW Belo Monte.

The Simplicio complex in the southeastern state of Minas Gerais is set to be concluded for inauguration in late August, according to a spokesperson for Brazilian state-run power company Eletrobras Furnas.

The BRL2.2 billion (US$1.3 billion) complex is being developed and will be operated by Eletrobras Furnas alone, Business News Americas reports. The Simplicio complex is part of the federal government infrastructure program, dubbed PAC.

For Belo Monte, Argentine renewable energy firm Impsa has signed a US$479 million contract with the Norte Energia consortium for the supply of four generating units. And Alstom of France has signed a contract worth about €500 million ($62.3 million) to provide power equipment for the project.

In a statement, Impsa said the four units will have a combined capacity of 2,500 MW. The contract also includes all the penstocks, lifting equipment and supervision of the assembly and start-up operations, reports indicate.

Of the total 14 611 MW Francis turbine-generator sets and six smaller bulb units needed, Alstom will supply seven Francis units, hydromechanical equipment and gas-insulated substations for the 14 large units.

Costa Rica advancing 305.5 MW Reventazon

Costa Rica’s electric utility is seeking electromechanical equipment for 305.5 MW Reventazon in Costa Rica.

Costa Rica’s government announced in February it included Reventazon, on the Reventazon River, in its 2011-2014 national development plan, with the aim of starting operations in 2016.

Instituto Costarricense de Electricidad (ICE) has received funding for the project from the Inter-American Development Bank and has applied for a loan from the European Investment Bank. ICE also has issued bonds for the US$1 billion project in Limon Province.

Reventazon is to include a 130 meter-tall, 527 meter-wide concrete-faced rockfill dam, a 1.68 km water transport tunnel and four Francis turbines. Equipment to be supplied includes turbines, auxiliary generators, control systems, balance of plant and a main bridge crane.

In related news, the Costa Rican Institute of Electrical power, which oversees the Reventazon construction, has chosen Cemex as cement supplier for the first phase of the project. Cemex will deliver 50,000 tons of cement.

Ethiopia plans hydro project along Nile River

Ethiopia will start building a major hydro project along the Nile River to increase electricity production, Prime Minister Meles Zenawi said.

The nation aims to provide 15,000 MW of power capacity within 10 years, part of a strategy to spend $12 billion over 25 years to improve power generation. Ethiopian Electric Power Corp. said the 5,000 MW project would be completed in five to 10 years.

Mexico’s La Parota could still go ahead

La Parota, a 900 MW and $900 million hydroelectric plant in the Mexican state of Guerrero, is achievable if concerns over its social and environmental impact are dealt with properly.

The executive director of German bank WestLB’s Global Energy Group told Business News Americas the hydro project has been delayed as a result of legal action taken by local communities trying to halt the project. The project is being developed by the Mexican state power company CFE.

Previously, WestLB provided the funding for construction of the 750 MW El Cajon and 750 MW La Yesca hydro plants.

Xekaman plant construction begins in Laos

Vietnam-based Viet Lao Power JSC has started construction of a 332 MW plant in Laos, which is to export part of it electricity output to Vietnam, wire services report.

The US$441 million Xekaman plant is being built 80 km from the border between the two countries. The plant, scheduled to start power generation in 2014, will sell its output to Laos’ southern region and central Vietnam, the government says.

Iran, China planning world’s tallest dam, hydro project

Iran and China are planning a deal for construction of Bakhtiari Dam in Iran, news agencies report. Bakhtiari would be the tallest concrete dam in the world.

Bakhtiari is to be a 315 meter-high arch dam on Bakhtiari River within the Zagros Mountains. The dam will have reservoir capacity of 4.8 billion m3 and would include a 1,500 MW hydropower plant.

Central America projects being studied

The United States Trade and Development Agency (TDA) plans to study funding opportunities for at least two projects in Panama and El Salvador.

TDA plans to hire consultants to carry out a definitional mission that involves traveling to Panama and El Salvador to follow up on projects that were presented in a TDA Mini-Hydroelectric Reverse Trade Mission.

In Panama, the consultant will examine the Panama Canal Authority’s 48 MW Alto Chagres project, proposed to be developed as part of its US$5.2 billion expansion of the Panama Canal. In El Salvador, the consultant will examine a proposal by Ingendehsa S.A. de C.V. to develop the 16 MW Ilopango-Aguacayo project on Lake Ilopango to generate power and help control annual flooding near Lake Ilopango.

Pumped storage activity in Germany

A consortium headed by ILF Consulting Engineers has been commissioned by Germany’s Schluchseewerk AG to provide design services for the 1,400 MW Atdorf pumped-storage plant in Baden—Wurttemberg, Germany.

The services include tender design, construction design, construction and site supervision as well as supervision of start-up, ILF reports. The value of the contract was not disclosed.

The new plant is scheduled to start operating in 2019.

Construction of Atdorf is meant to help improve the integration of variable renewable energy sources into the energy supply system and contribute to the future security of supply.

In related news, Vattenfall Europe Generation AG has awarded a contract to Stelba Hydro to refurbish pump-turbine sets at the 80 MW Wendefurth pumped-storage project in Germany’s Saxony-Anhalt State.

Vattenfall seeks refurbishment of 40 MW pumped-storage sets A and B. Work is to include modification or refurbishment of turbine parts, corrosion protection, turbine covers, guide vanes, servo-actuators, rotary shaft seal and other parts.

Energo Pro Georgia to invest in hydro plants, cable project

JSC Energo-Pro Georgia is planning a US$493 million project to build two hydropower plants and a power cable to connect Georgia and Turkey.

The stations, to be built in mountainous western Georgia, will have a combined capacity of about 71 MW and a total value of US$370 million, Bloomberg reports.

JSC Energo-Pro Georgia is a unit of Czech Republic-based Energo-Pro AS. Energo-Pro also plans a $123 million electricity line from Georgia to Turkey, reports indicate.

French department offers concession to build Ga hydro plant

The government of France’s Hautes-Alpes Department has offered a concession to build and operate a hydroelectric project on the stream of Ga in Hautes-Alpes.

The Prefecture des Hautes-Alpes owns several hydro projects, some of which are operated by concession holders. The prefecture offered a concession to design and manage development of a project of more than 4.5 MW to utilize flows of the Torrent du Ga. The concession holder will operate and maintain the project and sell its electricity for 40 years.

Concession award criteria include: energy efficiency in operation of the waterfall; respect for the environment and reconciliation of various uses of the resource; and economic condition and financial status of the concession.

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