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Saturday, January 9, 2010
Today's News Headlines
* Maule geothermal exploitation license imminent - Magma - Chile
* Biogas Technology to invest US$35mn in waste-to-energy projects - Mexico
* Long-term blackout real threat to Chávez - analyst - Venezuela
* Plans to concession 600MW cold reserve advance - Peru
* Roundup: Record demand, energy savings, transmission concession - Regional
* CAF greenlights US$65mn for Maple ethanol, biomass project - Peru
* Government, Bandes approve US$380mn in capital for CAF - Venezuela
* Countries to review Andean interconnection project - Regional
* IDB places CDM financing package in 2010 pipeline - Regional
* Ministry sets US$2.2bn rural electrification investment target - Peru
* Twelve registered for Paute-Sopladora hydro project - Ecuador
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* Maule geothermal exploitation license imminent - Magma - Chile
Vancouver's Magma Energy (TSX: MXY) believes the exploitation license for its Maule geothermal concession 300km south of Chilean capital Santiago is imminent, a company official told BNamericas.
Magma in July 2009 announced it had discovered a geothermal resource on the Maule block that could be used to develop a 140MW plant.
Magma is currently constructing a road to carry drilling equipment to the geothermal block.
"The road construction is continuing on budget and schedule," the official added.
If the road is not completed by the end of the southern hemisphere summer, the geothermal project would be delayed a further year, Magma said previously.
Magma currently has one geothermal power plant operating in the US state of Nevada and has exploration properties in the US, Chile, Argentina and Peru.
By Christopher Lenton
Business News Americas
* Biogas Technology to invest US$35mn in waste-to-energy projects - Mexico
UK-based firm Biogas Technology will invest up to US$35mn in waste-to-energy projects in Mexico over the next five years, the company's director for Latin America, Francisco Blanco, told BNamericas.
"We believe there is potential for dozens of sites to become [clean development mechanisms] CDMs at the moment, and we will continue to invest to bring these potential projects to fruition," Blanco said.
While the company had originally planned to develop 23 CDM projects throughout Mexico by 2011, bureaucracy and inefficiency at a municipal level will make that goal difficult to reach, according to Blanco.
"Municipalities have their own agendas which means that often any benefit that does not fall within their three-year term is of no interest to them," said Blanco.
At the same time, the UN Framework Convention on Climate Change (UNFCC) must relax its requirements for small-scale projects in order to encourage more waste-to-energy initiatives in Mexico, according to the executive.
"The costs involved in registering a project and keeping it verified are very high, which means a certain scale of project is just not feasible," Blanco said.
Biogas Technology currently operates waste-to-energy projects in Ecatepec and Tultitlán, both in Mexico state, as well as in Chile, Peru and Brazil.
By Catherine Setterfield
Business News Americas
* Long-term blackout real threat to Chávez - analyst - Venezuela
Venezuela's current power crisis, triggered both by low hydro levels because of El Niño and investment shortfalls, has received widespread press coverage around the world, especially after authorities began to ration water as well. Ordinary Venezuelans now face the threat of both water and power cuts, and industries and shopping malls have also been ordered to reduce activity to conserve resources.
Venezuelans, though, are used to problems that may seem absurd in other parts of the world. From sugar and milk shortages to political blacklists, the power and water cuts are simply the latest challenges that complicate daily life across the country.
For a sense of the reaction from the front lines, BNamericas spoke with Thomas O'Donnell, a nuclear physicist with the New School University in New York City and Caracas-based Venezuelan energy analyst.
BNamericas: The international press has really made a big deal about the water and power cuts going on at the moment. Some have even predicted that Chávez could be overthrown because of the popular discontent. Is there any truth to this? Or is the situation being blown out of proportion?
O'Donnell: Some of the coverage has been right. I don't think it's affecting people here in Caracas too much, but some of the interior states are really being affected. It's hitting industrial production. In Caracas, it's hitting the shopping malls. They limited the hours, and there are now big lines of people waiting to get in. It's the only place where people can really go and be secure. So people are really angry.
BNamericas: But enough to bring down a government?
O'Donnell: The political opposition is not sufficiently organized to really take advantage of things like this. There are a lot of new limitations they are dealing with. After the elections last year, Chávez came down really hard on the opposition and changed all the rules. It would take any opposition a couple of years to adapt to a new situation like that. We'll see if they're capable of that here.
BNamericas: Is Chávez really worried about this? Will heads roll?
O'Donnell: Chávez is concerned. He tries to blame it on El Niño and deny the problems with power and water infrastructure. He talks constantly on his television talk shows about it. There's just not enough water up at Guri dam. The rainfall has been significantly lower, and all of the infrastructure problems become exacerbated when there is a water shortage. If it starts raining hard and he gets lucky with a little infrastructure, he might pull out of this. But it's a serious problem.
There are serious conservation measures going on, too. All of that helps, but it doesn't solve the fundamental problems.
BNamericas: How bad would it have to get before people really get angry enough to revolt? Not everyone understands how important shopping malls are to Venezuelans!
O'Donnell: People are used to complaining about things. There was no sugar for awhile, and then there was no milk. It's like that. Right now, it's the latest irritant. There's a pretty high tolerance for this kind of stuff here in Venezuela. If there was a long-term blackout, that would be a serious matter. I'd guess that it's not as likely to happen with the demand reductions. But if there were to be a blackout in Caracas for a couple of days, things could get intense. It wouldn't necessarily mean a revolution, though.
BNamericas: Is there any progress being made?
O'Donnell: There is a plan to add all of this thermo capacity, but it's falling behind. The measures being taken are emergency ones and won't change the fundamentals. The problems aren't just caused by Guri dam, even though it accounts for 75% of the power produced in Venezuela. There is also the natural gas crisis. A number of things have come together. They need the gas precisely for these kinds of circumstances. These are long-term problems.
In a way, Chávez is lucky that the country is much less industrialized than it was a couple of years ago. It might not be as critical as it might have been if the country's industries were in decent shape.
By Nathan Crooks
Business News Americas
* Plans to concession 600MW cold reserve advance - Peru
The board of Peru's state agency for promoting private investment ProInversión has approved the promotion plan for putting out to concession 600MW of standby power, the official gazette reported.
An agency spokesperson confirmed to BNamericas that the project is on ProInversión's 2010 priority list but information on when a call for bids would be made was not immediately available.
The concessions would run 15-20 years, BNamericas reported previously.
The plants would increase the national grid's thermo reserve and be used in emergency situations.
Last month, President Alan García signed a decree that declared 20 public-private projects of national interest and a priority, including the 600MW of standby power.
By Business News Americas staff reporters
* Roundup: Record demand, energy savings, transmission concession - Regional
Paraguay's state power company Ande on January 5 registered demand of 1.92GW - which includes 92MW sold to Argentina - breaking the 1.85GW mark set in 2009, local press reported.
Peak demand in 2007, 2006 and 2005 reached 1.71GW, 1.60GW and 1.59GW, respectively.
***
Panama's public services regulator Asep announced it has ordered all lighted signs in the country to be turned off between 1am and 6am to avoid rationing due to the weather phenomenon El Niño.
The energy crunch is expected to worsen in coming weeks, according to a statement from the watchdog.
The order is part of a package of measures the government has adopted that include turning off air conditioning in government offices during non-work hours.
Asep also reported it has kicked off an "aggressive" inspection plan of thermoelectric plants to guarantee supply.
***
And Peru's state agency for promoting private investment ProInversión has published consolidated bidding rules for the Chilca-Marcona-Caravelí transmission concession project.
The 500kV project aims to reinforce the interconnection between the center and south of the country. Estimated investment is US$300mn.
The 30-year concession entails the design, finance and construction of the line and associated substations. Works are projected to take 30 months.
By Business News Americas staff reporters
* CAF greenlights US$65mn for Maple ethanol, biomass project - Peru
The Andean Development Corporation (CAF) has approved a US$65mn loan for Maple Energy's (AIM: MPLE) US$246mn, 35Mg/y (133Ml/y) ethanol and biomass project in northern Peru.
The financing is part of CAF's strategy to promote alternative clean energies and energy efficiency, said the lender's executive president Enrique García.
Additional financing will come from IDB (US$25mn), the Entrepreneurial Development Bank of the Netherlands (US$25mn) and Peru's Interbank (US$25mn).
A 37MW bagasse-fired plant will sell 17MW of surplus power to the grid via a 36km line.
Commercial operations are due to begin next year.
By Business News Americas staff reporters
* Government, Bandes approve US$380mn in capital for CAF - Venezuela
The Venezuelan government and state-owned development bank Bandes have signed two agreements to provide a total of US$380mn in capital to the Andean Development Corporation (CAF) to be paid until 2017, the multilateral said in a release.
The funds are part of the seven-year US$2.5bn paid-in capital increase for CAF approved by its board in August.
CAF predicts it will approve US$1bn in loans for Venezuelan projects in 2010, in the electric, public transport, social infrastructure and other sectors, and expects to disburse US$1.1bn over the next couple of years for projects already underway in the country.
The multilateral has approved nearly US$3bn in lending for projects in Venezuela in the past five years.
Caracas-based CAF has 16 shareholder countries from Latin America and the Caribbean, plus Spain and Portugal.
By Business News Americas staff reporters
* Countries to review Andean interconnection project - Regional
Power authorities from Bolivia, Chile, Colombia, Ecuador and Peru are due to meet in Chilean capital Santiago on January 21 to review advancement of a planned interconnection among the countries.
The news follows the publication of a supreme resolution in Peru's official gazette authorizing deputy energy minister Daniel Cámac to travel to the meeting.
Consortium Asociación de Consultores has been looking at the project's technical and economic prefeasibility.
The meeting will include the participation of energy experts, private sector representatives and specialized agencies, Peru's state news agency Andina reported.
By Business News Americas staff reporters
* IDB places CDM financing package in 2010 pipeline - Regional
IDB's Multilateral Investment Fund (MIF) could provide US$12mn for a planned fund that will structure investments in at least 7-10 CDM programs.
The MicroCarbon Development Fund (MCDF) will invest in demand-side energy efficiency programs, according to the regional lender.
MIF could commit up to US$10mn in capital and US$2mn in non-reimbursable grants for the US$50mn MCDF. The financing package is in the bank's 2010 pipeline.
MIF promotes private sector growth through grants and investments, with an emphasis on microenterprise.
By Business News Americas staff reporters
* Ministry sets US$2.2bn rural electrification investment target - Peru
Rural electrification works in Peru are due to receive US$2.20bn in investment through 2018, according to the energy and mines ministry's rural electrification department.
Of the total, US$1.25bn will come from the national government, US$373mn from regional governments, US$295mn from local governments and US$271mn from power companies.
The goal is to benefit 8.06mn residents, according to the department's 2009-18 national rural electrification plan.
The central government funds will go to T&D and small hydro and wind. The national government also plans to pump US$14.7mn into pre-investment studies.
In 2009, the ministry invested 520mn soles (US$181mn) in rural electrification works which benefitted 465,000 residents in 1,481 communities.
For the 266-page document, in Spanish, go to this link (http://dger.minem.gob.pe/ArchivosDger/PNER-2009-2018.pdf)
By Business News Americas staff reporters
* Twelve registered for Paute-Sopladora hydro project - Ecuador
A total of 12 companies have registered for the 487MW Paute-Sopladora hydro project in Ecuador, according to project developer Hidropaute.
The bidding is for the project's civil works and to supply the electromechanical equipment.
The groups are China Gezhouba, Hidrochina, CETC Internacional, Impreglio, Sinohydro, Voith Hydro, Siemens, Daewoo International, Impsa, Energomashexport, Alstom Hidroenergia and ABB.
The contract is due to be awarded in March.
The US$609mn project is planned for the Paute river in Azuay and Morona Santiago provinces. Works are scheduled to take 1,438 days.
Hidropaute is part of state power generation holding company Celec.
By Business News Americas staff reporters
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In-deph interview
* Colombia's power challenges
Luis Rico
CEO
Isagen
Colombia
http://www.bnamericas.com/interviews/electricpower/Luis_Rico_,Isagen,/169252721
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Main companies covered in today's news
* Administrador del Mercado Mayorista
http://www.bnamericas.com/company-profile/en/Administrador_del_Mercado_Mayorista-AMM/169252721
* Noble Energy, Inc.
http://www.bnamericas.com/company-profile/en/Noble_Energy,_Inc,-Noble/169252721
* Perenco PLC
http://www.bnamericas.com/company-profile/en/Perenco_PLC-Perenco/169252721
* Corporación Eléctrica del Ecuador.
http://www.bnamericas.com/company-profile/en/Corporacion_Electrica_del_Ecuador,-CELEC/169252721
* Banco Internacional del Perú S.A.A.
http://www.bnamericas.com/company-profile/en/Banco_Internacional_del_Peru_S,A,A,-Interbank_Peru/169252721
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