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Monday, January 18, 2010
Today's News Headlines
* Generators facing regulatory uncertainty as election approaches - Chile
* Government to build thermo plants at Sidor and Venalum - Venezuela
* Cabei agrees to US$22.9mn further financing for 17MW hydro project - Nicaragua
* Eletrobrás to complete 2.2GW Inambari feasibility study in March - Brazil, Peru
* Government to lower power rates using revenue from exports - Ecuador, Peru
* Energy integration treaty could be ready by February - official - Brazil, Peru
* Colbún issues US$500mn bonds - Chile
* Nuclear plants to be located on São Francisco banks - report - Brazil
* FI-FGTS fund to buy additional stake in Santo Antônio hydro plant - Brazil
* EDC to launch operations at two thermos by year-end - Venezuela
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* Generators facing regulatory uncertainty as election approaches - Chile
Both large-scale hydro and thermo generators in Chile are facing new regulatory uncertainty as the government of President Michelle Bachelet gets ready to hand over the reins to whoever wins the presidential runoff election on January 17.
Bachelet's government will leave two administrative innovations important to the industry including the creation of both energy and environment ministries. As her government was preparing to end, however, both the energy and environment ministries began turf wars that will likely continue regardless of who becomes the next president.
The new environmental ministry will be given more centralized power over environmental control and regulation. The current national environmental regulator Conama will disappear, and its former head, Ana Lya Uriarte, was put in charge of the new ministry. Uriarte's position though, will likely end when Bachelet leaves office.
The regional environmental commissions (Corema) will stay intact, but their clout is expected to lessen with the change.
Uriarte has recently been in the headlines for her role in the proposed new rules for particulate emissions from the country's thermo plants, which sparked disagreement with Chile's energy minister Marcelo Tokman, according to local press reports.
According to the proposed rules, thermo plants already built would have 10 years to make the required investment in emissions mitigation systems, while proposed new plants would have three years to adapt to the new regulations.
The new regulations are expected to cost the industry up to US$1bn, according to reports, but Tokman has been quoted as saying that plans for a study are underway to clarify the new position.
Tokman criticized the proposed rules, which were announced during the Copenhagen meeting, according to reports. He was allegedly surprised, as were generators, about how strict the new rules were, remarking that they are even stricter than those put into effect in the EU.
This minor tussle between the ministers could lead to future disagreements over major issues currently facing the power sector including whether Chile will continue its move toward more coal capacity, the decision over the 2.75GW HidroAysén plant, or the country's possible investment in nuclear energy.
Depending on whom the next president will choose to head the two ministries in the next administration, the nascent ministries may be sources of conflict before the roles and powers of each have time to congeal.
By Michael Lagiglia
Business News Americas
* Government to build thermo plants at Sidor and Venalum - Venezuela
The Venezuelan basic industry and mining ministry (Mibam) will be installing a 300MW thermoelectric power plant at state steelmaker Sidor in order to keep production levels up, state news agency ABN reported.
Mibam head Rodolfo Sanz made the announcement several days after Sidor president, Víctor Álvarez, said that the company would be purchasing six hybrid gasoil and gas plants to supply its mill with extra energy and prevent production from falling.
In the last week of December Sidor reduced its power consumption by 200MW by shutting down four furnaces in the plating area and one in the billet area as part of the government-implemented rationing program.
VENALUM
Mibam also said that it would be building a 100MW thermoelectric plant at state aluminum reducer Venalum, where 360 cells have been shut down as well.
Aluminum and steel companies in the Guayana region must comply with this power rationing plan due to falling levels at the Guri dam, which provides energy for the region.
These companies consume about as much power as Caracas, electricity minister Ángel Rodríguez said previously.
By Business News Americas staff reporters
* Cabei agrees to US$22.9mn further financing for 17MW hydro project - Nicaragua
Nicaragua's government signed a financing agreement with the Central American Bank for Economic Integration (Cabei) for the 17MW Larreynaga hydroelectric project, according to a presidential statement.
Under the terms of the agreement, the bank will provide up to US$22.9mn, which will supplement the US$36.7mn originally approved for the project.
Spain's Cobra began construction of the plant in Jinotega province on the Cacao river, 161km north of capital Managua last year. It is considered the first stage of the hydroelectric development of the Viejo river basin.
Its reservoir will cover 5.4ha and hold 178,070m3 of water.
The plant, which will be operated by state power firm Enel, will increase the country's physical generation by 2.8% and installed capacity by 3.4%, Cabei's Nicaragua country manager Silvio Conrado said.
It will generate CO2 emissions reductions of some 53,658t/y.
The project aims to reduce Nicaragua's dependence on thermo generation.
"In the future, also at the request of the government, the financing of an important quantity of projects in this sector is planned, for very significant amounts, some of those from the private sector and others from the public sector," Conrado said.
By Business News Americas staff reporters
* Eletrobrás to complete 2.2GW Inambari feasibility study in March - Brazil, Peru
Brazilian federal power holding group Eletrobrás (NYSE: EBR) will complete a feasibility study in March for Peru's 2.2GW Inambari hydroelectric plant, local news agency Andina reported, citing the company.
The plant would be located on the border of Puno, Madre de Dios and Cusco departments and 300km from the Brazilian border.
It would require an investment of US$3bn, and be developed by a consortium of Eletrobrás and fellow Brazilian firm OAS.
The plant would supply Peruvian demand and also export output to Brazil.
Other Peruvian projects in which Eletrobrás has expressed interest are Sumabeni (1.07GW), Paquitzapango (2GW), Urubamba (940MW), Vizcatán (750MW) and Cuquipampa (800MW), according to a previous BNamericas report.
Eletrobrás will resume prefeasibility studies for the Urubamba and Paquitzapango plants during this quarter, and wrap up by mid-year, the company said.
It would develop the plants with Brazilian firms Odebrecht and Andrade Gutierrez, respectively.
Currently the biggest hydro plant in Peru is state-owned Mantaro, at 850MW.
By Business News Americas staff reporters
* Government to lower power rates using revenue from exports - Ecuador, Peru
Peruvian power rates will drop in the coming months due to revenues from power exports to Ecuador, state news agency Andina reported, citing the energy and mines ministry (MEM).
Power exports to Ecuador were authorized in mid-November 2008 due to supply shortages in the country associated with low output from the Paute hydroelectric plant.
Part of the revenues obtained from exports will go to paying generators' production costs, with the remainder to be directed toward readjusting power rates, the report cited deputy energy ministry Daniel Cámac as saying.
Cámac did not elaborate on the value of the power exports, nor what percent would go to decreasing power rates.
Energy and mining investment regulator Osinergmin is currently drafting the procedure for the power rate reduction to ensure compliance with the legal framework.
Power exports to Ecuador are expected to conclude in April, Cámac said.
By Business News Americas staff reporters
* Energy integration treaty could be ready by February - official - Brazil, Peru
Peru's government expects an energy treaty proposal with Brazil to be ready by February, a statement from energy and mines ministry (MEM) cited deputy energy minister Daniel Cámac as saying.
Officials from the two countries are meeting this week in Lima to assess the social, economic and technical aspects of power sector integration. The meeting will also address regulation, power generation, environment, the development of hydroelectric plants, and interconnection.
The benefits for Peru of an energy integration with its eastern neighbor include harnessing renewable resources, large-scale investments, sharing complementary resources and improving the reliability of power systems, MEM minister Pedro Sánchez said, adding that benefits will also be seen on a local level, including economic development of the areas where specific projects are located, improvement in urban conditions and job creation.
The Peru-Brazil energy integration seminar concluded January 15.
By Business News Americas staff reporters
* Colbún issues US$500mn bonds - Chile
Chilean generator Colbún has issued US$500mn in bonds to help refinance its liabilities and finance future investments, the company said in a statement to securities regulator SVS.
The bonds have a 10-year term and a 6% interest rate.
Colbún is the second largest generator on Chile's central SIC grid with an installed capacity of 2.62GW.
The company generated a total of 10.6TWh in 2008.
By Business News Americas staff reporters
* Nuclear plants to be located on São Francisco banks - report - Brazil
The two next nuclear plants to be built in Brazil will be situated on the banks of the São Francisco river which crosses the northeast region, according to technical studies to be submitted to President Luiz Inácio Lula da Silva, local daily Folha de S Paulo reported.
Under Brazil's nuclear program, four 1GW units should be built by 2030, two of which in the northeast and two others in the southeast, where studies are behind schedule.
The government is expected to decide on the location of the northeastern units by March, Folha said.
The main arguments in favor of the São Francisco are the availability of water and the fact that the impoverished northeast needs to attract investments.
http://www.aebrazil.comAgência Estado
* FI-FGTS fund to buy additional stake in Santo Antônio hydro plant - Brazil
Brazil's FI-FGTS, an infrastructure fund managed by federal savings bank Caixa Econômica Federal (CEF), has reached a deal to buy an additional stake in the Santo Antônio hydroelectric plant from the Brazilian subsidiary of Santander, a source familiar with the negotiations told Agência Estado.
Santo Antônio is being constructed on the Madeira river in the northern state of Rondônia. The 3.15GW project is part of the Madeira complex along with the Jirau plant.
With the acquisition, the fund will boost its indirect stake in Santo Antônio to 9.98% from 4.98%.
The deal was submitted to antitrust regulators, the source said.
FI-FGTS has also been in talks to buy stakes in other energy businesses such as Nova Cibe Energia and J. Malucelli Energia e Hydrotérmica. In addition, the fund is a partner in Alupar, which operates in the generation and transmission areas.
FI-FGTS was created with funds from Brazil's FGTS severance and indemnity fund.
http://www.aebrazil.comAgência Estado
* EDC to launch operations at two thermos by year-end - Venezuela
Venezuelan state controlled utility EDC is planning to launch operations at two new thermo units before the end of the year, state news agency ABN reported.
The Josefa Joaquina Sánchez Bastidas plant in Vargas state will be expanded by 135MW, and the La Raisa plant in Miranda state will add 450MW of new capacity to the grid.
EDC has plans to add a total of 2.1GW of new capacity to the national grid by 2012, according to the report.
A total of US$4.1bn will be invested in the new capacity, which should reduce Venezuela's dependence on hydro levels at the Guri dam.
EDC currently has an installed generation capacity of 2.2GW.
Venezuela is currently facing a power crisis because of low levels at Guri. State-owned power company Corpoelec is also progressing with plans to add new thermo capacity to the grid.
By Business News Americas staff reporters
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In-deph interview
* Latin America still full of opportunities
Pablo Moysam
Corporate commercial manager
Santos CMI
Argentina, Chile, Mexico, Regional
http://www.bnamericas.com/interviews/electricpower/Pablo_Moysam_,Santos_CMI,/170324297
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Main companies covered in today's news
* Centrais Elétricas Brasileiras S.A.
http://www.bnamericas.com/company-profile/en/Centrais_Eletricas_Brasileiras_S,A,-Eletrobras/170324297
* Odebrecht Perú Ingeniería y Construcción S.A.C.
http://www.bnamericas.com/company-profile/en/Odebrecht_Peru_Ingenieria_y_Construccion_S,A,C,-Odebrecht_Peru/170324297
* International Finance Corporation
http://www.bnamericas.com/company-profile/en/International_Finance_Corporation-IFC/170324297
* The World Bank Group
http://www.bnamericas.com/company-profile/en/The_World_Bank_Group-World_Bank/170324297
* Banco Nacional de Desenvolvimento Econômico e Social
http://www.bnamericas.com/company-profile/en/Banco_Nacional_de_Desenvolvimento_Economico_e_Social-BNDES/170324297
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