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Thursday, January 21, 2010
Today's News Headlines
* HidroAysén plotting strategy to answer new questions - Chile
* Globeleq acquires control of Central American wind developer - Regional
* Power sector emissions could be reduced by 28.3% through 2030, says World Bank - Mexico
* Edeeste aims to bring on board 60,000-plus users - Dominican R.
* Roundup: Thermo concession, supervision contracts, energy policies - Regional
* Magma awarded Pellado geothermal exploration permit - Chile
* Eletrobrás seeks World Bank financing for US$699mn project - Brazil
* At least 10 potential bidders for La Yesca transmission lines - Mexico
* CTEEP to invest US$1.07bn in 2010-12 - Brazil
* December demand higher on SIC, lower on SING - Chile
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* HidroAysén plotting strategy to answer new questions - Chile
The HidroAysén JV developing the US$3.2bn hydro project in southern Chile's Aysén region is currently plotting its strategy to respond to 1,114 new questions and observations submitted by regulatory bodies in response to the project EIS, a company spokesperson told BNamericas.
The company in October last year submitted answers to close to 2,700 questions and observations. Chile's national environmental regulator Conama and the regional Corema regulator for Aysén in November 2008 granted HidroAysén a nine-month extension to respond to the original questions.
"HidroAysén is currently evaluating the amount of time it will take to respond to the new observations," the spokesperson said. "The process will be similar to the first round of questions and observations, although nothing formal has yet been set."
HidroAysén submitted the original EIS in August 2008.
Close to US$12mn was spent on the EIS over three years. The final document included more than 10,500 pages of analysis on the environmental impact of the proposed plan to construct five dams on the Baker and Pascua rivers.
The first of the five dams would come online at the end of 2013, pending environmental approval. The project timeline, however, could be delayed with the new round of questions, according to local press reports.
The project will supply nearly 21% of total capacity on Chile's central SIC grid when the final stage of the project comes online at the end of 2020.
Environmentalists have protested the HidroAysén project and object to a 2,000km transmission line that would connect to Chile's central SIC grid, arguing the works would do irreparable harm to pristine lands in Patagonia.
HidroAysén argues the 2.75GW project is fundamental to Chile's energy independence and that it will save millions of dollars in reduced energy imports annually.
Chilean generators Endesa Chile and Colbún each hold 50% of the JV.
By Nathan Crooks
Business News Americas
* Globeleq acquires control of Central American wind developer - Regional
Company Globeleq Generation announced it has acquired a 70% interest in Central American wind project developer Energías Renovables de Mesoamerica (ERM or Mesoamerica Energy).
"It was a mutual good opportunity between us and the sellers," Globeleq CFO Susan Wilkins told BNamericas, adding "the Americas is certainly our focus market." Wilkins could not comment on other M&A plans in the region.
Globeleq will acquire the controlling interest from business groups in Central America, represented by M&A advisory, strategic consulting and private equity firm Mesoamerica. Current shareholders will hold the remaining interest.
ERM owns and operates a 23MW wind farm in Tilaran, Costa Rica and is developing the 100MW Cerro de Hula project in Honduras. Last month, Mesoamerica Honduras manager José Morán announced the planned signing of a loan with the US Ex-Im Bank in March for the latter project.
"We would expect that all the development aspects [of the Honduras project] would be completed by mid-2010, and we would certainly look to start construction as soon as we could thereafter," she added.
ERM also owns the rights for several potential renewable energy projects in the region.
By David Casallas
Business News Americas
* Power sector emissions could be reduced by 28.3% through 2030, says World Bank - Mexico
Mexico could reduce its carbon emissions from the energy sector by 91Mt in 2030 compared to a baseline scenario (business as usual) of 322Mt, according to a World Bank study on reducing Mexico's carbon emissions (Medec).
A baseline scenario for Mexico's power sector would see CO2 emissions increase by 230% from 142Mt in 2008 to 322Mt in 2030 (21.5% and 28.3% of the total emissions, respectively). Coal and natural gas would account for 37% and 25% of new installed capacity.
The Medec scenario, however, would replace much of the fossil fuel generation with renewables, biomass and cogeneration.
Wind generation in 2030 would make up 6% of generated power, up from 1.4% in the baseline. Geothermal would reach 11% compared to 2%, biomass 8% rather than 0.1%, and small hydroelectric 16% instead of 14%.
Cogeneration would provide 13% of new capacity. Cogeneration in state oil company Pemex's facilities alone would account for more than 6% of national capacity.
"Developing this [cogeneration] potential will require a regulatory framework that enables and encourages the sale of excess energy and capacity to the electricity grid," according to the report.
Investment in cogeneration is less attractive to Pemex than E&P projects. Furthermore, the firm will face troubles financing such efforts due to its high debt that presents an obstacle for tapping credit markets at reasonable terms, as well as fiscal constraints related to burdensome tax obligations.
"Measures to allow contracting with the private sector to tap cogeneration and reduce gas flaring and leakage could reduce the need for public investment," the report said.
Adjusting Pemex and state power company CFE's procurement procedures to the particularities of such energy projects is required to reduce risks and transaction costs of small power producers.
Given the Medec scenario, coal-fired generation would comprise only 6% of generated power in 2030, down from 31% in the baseline.
The additional investment costs in the power sector under the Medec scenario would be US$10bn between 2009 and 2030, "much of which would be offset by lower operation costs," the report said.
The baseline scenario is based on government estimates that power demand will increase by 4.8% between 2007 and 2016. The Medec scenario assumes that generation technologies with a net cost below US$25/t CO2 will be deployed.
When also including the oil and gas, energy end-use, agriculture and forestry, and transportation sectors, Mexico could reduce its carbon emissions by 42% in 2030 compared to the baseline scenario. The baseline would see CO2 emissions increase by 72.5% from 659Mt in 2008 to 1,137Mt in 2030. The Medec scenario would thus keep 2030 emissions at virtually the same level as in 2008.
The World Bank described the Medec as "conservative" given that "only 40 interventions were considered and the analysis did not assume any major changes in technology.
"Almost all of the Medec measures have already been implemented in Mexico as commercial-scale investments projects or pilot programs, thus demonstrating the feasibility of implementing them in the near term."
To read a full copy of the 179-page report, go to this link (http://www.bnamericas.com/research_detalle.jsp?idioma=I&documento=1012774&id_sector=0)
By Business News Americas staff reporters
* Edeeste aims to bring on board 60,000-plus users - Dominican R.
Dominican Republic power distributor Edeeste will in coming days begin a campaign to formalize contracts with more than 60,000 users that do not currently pay for electricity.
The users represent 36.3GWh or roughly 290mn pesos (US$8mn), the company said in a statement.
The additional billing will help reduce non-technical losses by 1% by year-end, according to the utility.
Edeeste will allocate 130mn pesos to this effort which will target users in the national district and provinces Santo Domingo, Monte Plata, San Pedro de Macorís, La Romana, El Seibo, Hato Mayor and Higuey.
State power holding company CDEEE holds a 50% stake in the distributor which received US$128mn from the government in the first 11 months of 2009 to help cover its deficit, according to CDEEE's latest operational report.
Edeeste's revenue in the 11-month period totaled US$273mn and costs totaled US$425mn. Energy purchases made up the bulk of total costs at US$322mn.
In November, the distributor billed US$28.1mn and collected US$27mn. The number of billed clients in the month was 348,920 and the amount of power pulled from the grid totaled 271GWh (16.9% from spot market) at a cost of 1.18bn pesos.
In January-November last year, Edeeste purchased 2.82TWh at a cost of 11.585bn pesos.
At end-November, the country's other distributors Edenorte and Edesur boasted billed clients of 619,701 and 400,055, respectively.
By Business News Americas staff reporters
* Roundup: Thermo concession, supervision contracts, energy policies - Regional
Peru's energy and mines ministry has granted company Agro Industrial Paramonga the definitive concession to operate the Paramonga 1 thermoelectric plant. The 23MW plant is in Paramonga district of Barranca province, Lima region, the official gazette reported.
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Peru's energy and mining investment regulator Osinergmin has kicked off the process to select companies for its 2010 power sector supervision program.
Companies - which must be registered with the watchdog - have until January 25 to confirm participation with results due out February 22, according to an Osinergmin announcement.
The companies will supervise performance of generation units and T&D infrastructure, among other tasks.
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The World Bank announced it is preparing a new energy strategy due to be finalized early next year. The lender will hold online consultations and face-to-face meetings to gather views from sector agents from February through June in the first phase of consultations.
Comments and recommendations will be used to help draft the strategy, which is available at this link (http://siteresources.worldbank.org/EXTESC/Resources/Approach-paper.pdf)
***
And the Dominican Republic's national energy commission (CNE) announced it is continuing to hold meetings in the lead-up to the drafting of a 20-year national energy plan.
CNE was created in 2001 and is the government's energy policy arm for the power and oil and gas sectors. The plan is due to be ready in coming months.
By Business News Americas staff reporters
* Magma awarded Pellado geothermal exploration permit - Chile
Vancouver's Magma Energy (TSX: MXY) has been awarded a geothermal exploration permit for the 100,000ha Pellado property 300km south of Chile's capital Santiago, a company official told BNamericas.
Pellado adjoins Magma's Maule property, where a 140MW geothermal resource has been identified.
Magma expects that 320MW of geothermal capacity can be developed on the Mariposa resource that stretches across the two properties, Magma consultant Sinclair Knight Mertz said in a statement released by the company.
Magma in July 2009 submitted a geothermal development plan for a 50MW power project at the Maule property. The concession permit is pending.
Magma is currently completing a 13km access road that will enable additional drilling to commence in February 2010, according to the statement.
Magma's US$15mn 2010 exploration program will include two wells on each of the Pellado and Maule properties, according to the statement.
"The award of the Pellado property now allows Magma to aggressively explore and develop the Mariposa geothermal resource," CEO Ross Beaty said in the statement. "This major geothermal discovery by our outstanding Chilean exploration team increases Magma's attributable geothermal resources to 784MW, in addition to Magma's producing reserves of 86MW."
By Business News Americas staff reporters
* Eletrobrás seeks World Bank financing for US$699mn project - Brazil
Brazilian state-run utility holding group Eletrobrás (NYSE: PBR) is seeking financing from the World Bank for a US$699mn program of distribution projects set for the northern and northeastern regions of Brazil.
According to a World Bank filing, the project will involve six Eletrobrás-managed distribution companies including Amazonas Energia, Eletroacre, Ceron, Boa Vista, Cepisa and Ceal.
Eletrobrás aims to conduct improvements on power distribution networks and expand and reinforce low and medium voltage grids. The company is also aiming to reduce distribution losses.
The federal power holding group will also invest in advanced metering infrastructure and update current management information systems.
Eletrobrás will finance US$214mn of the project and is looking to secure World Bank financing of US$485mn, according to the documents.
Project progress will be measured through performance indicators including a decrease in the number and duration of service interruptions; lower total losses (technical and non-technical); increase in collection rates; and institutional improvements.
The request will be put up for possible approval at a World Bank meeting in late May, according to the filing.
By Business News Americas staff reporters
* At least 10 potential bidders for La Yesca transmission lines - Mexico
At least 10 firms have purchased bidding rules for the international tender launched by Mexico's state power company CFE for two transmission lines in Jalisco state associated with the 750MW La Yesca hydroelectric project currently under construction as of the third and final project meeting, according to federal procurement website Compranet.
The lines will have 400kV capacities and stretch 220km. Works also include two 400kV substations and four feeders.
The companies that attended the meeting were: Siemens Innovaciones, Abengoa México, Prolec GE Internacional, JM Romero y Asociados Constructores, Elecnor, Iberdrola Ingenería y Construcción (Iberinco), Industrias IEM, Isolux de México, AGC Homes Construcción, and Techint.
Works are scheduled to begin on February 19 and run 510 days.
The tender number is 18164093-038-09.
La Yesca is being built on the Santiago river in Nayarit and Jalisco states. The retaining wall will be the second highest in the world at more than 200m. Construction is scheduled to wrap up in 2012.
By Business News Americas staff reporters
* CTEEP to invest US$1.07bn in 2010-12 - Brazil
Brazilian utility company CTEEP plans to invest 1.91bn reais (US$1.07bn) in the 2010-12 period, the company said in a statement to investors.
The investment plan was approved by CTEEP's board of directors early this week.
According to the statement, 794mn reais will be invested this year, 696mn reais in 2011 and the remaining 421mn reais in 2012.
The company said half of the total investment volume will go to its transmission business unit.
Colombian state transmission company ISA controls CTEEP, Brazil's largest private transmission company with 12,140km of lines and 102 substations.
By Business News Americas staff reporters
* December demand higher on SIC, lower on SING - Chile
Power demand in December on Chile's central SIC grid rose 3.6% from the same period the previous year to 3.7TWh, brokerage firm Celfin Capital said in a research note.
The figures represented a recovery in industrial activity tempered by energy savings by end consumers, Celfin said.
Total energy demand in 2009 on the SIC grid was down 0.2% from the previous year.
Hydro output in December was 28.8% higher over the same period 2008, while thermo output over the period fell 37.6%. Natural gas-fired output fell 92.1% because of lower natural gas imports from Argentina and the use of LNG for 27.2% of thermo generation.
Power demand in December on Chile's northern SING grid was down 2.4% over the same month 2008 to 1.27TWh, reflecting a high comparison base and modest industrial consumption growth.
To read the full Celfin report, go to this link (http://www.bnamericas.com/reports/133777.pdf)
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,/170884526
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Main companies covered in today's news
* Construtora Norberto Odebrecht S.A.
http://www.bnamericas.com/company-profile/en/Construtora_Norberto_Odebrecht_S,A,-CNO/170884526
* GasValpo S.A.
http://www.bnamericas.com/company-profile/en/GasValpo_S,A,-GasValpo/170884526
* Companhia Energética de Alagoas
http://www.bnamericas.com/company-profile/en/Companhia_Energetica_de_Alagoas-Ceal/170884526
* Centrais Elétricas de Rondônia S.A.
http://www.bnamericas.com/company-profile/en/Centrais_Eletricas_de_Rondonia_S,A,-Ceron/170884526
* Centrais Elétricas Brasileiras S.A.
http://www.bnamericas.com/company-profile/en/Centrais_Eletricas_Brasileiras_S,A,-Eletrobras/170884526
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