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Update on regional utilities projects

Brazil/Argentina | US | Norway/Sweden | Germany | Spain | Middle East | China | India | South Africa | Japan | Malaysia/Indonesia | CIS


Brazil/Argentina

Power sharing

Brazil and Argentina are planning a joint venture to manage electricity projects on their border, which will also strengthen ties in the region. The partnership will equally divide generation from the 2,000 MW Garabi-Panambi hydroelectric complex. The Brazilian Government is participating via its state-controlled utility Centrais Eletricas Brasileiras1.

US

Nuclear reactors approved

Federal regulators granted a combined operating license for two new reactors at Southern Company's Plant Vogtle in Georgia, the first US nuclear plant approved for construction since 1978.

The Government has offered US$8.3 billion in loan guarantees as part of a pledge to expand nuclear power. More than two dozen reactors have been proposed in recent years but only five will probably be completed by 2020.

The economic slowdown, the sharp drop in the price of natural gas, and the March 2011 Japanese nuclear disaster, have all added to the significant slowing of the anticipated nuclear renaissance2.

Norway/Sweden

Trading electricity certificates

As of 1 January 2012, Norway and Sweden are part of a joint electricity certificate market. They aim to bring 26.4 terawatt hours (TWh) of new renewable energy generation online by 2020. The joint market will permit trading in both Swedish and Norwegian certificates, and receipt of certificates for renewable electricity production in either country. Sweden has had a green certificate market since 20033.

The system is the first cross-border support scheme for renewable energy between two countries.

Germany

Gas plants on hold

The rising cost of gas linked to oil prices, low power prices and weak demand due to Europe's financial crisis are threatening plans to build new gas-fired power generation capacity in Germany.

Statkraft, Norway's state-owned electricity company, will abandon plans to build a new gas-fired power plant in Emden and put its existing 430-MW gas plant at the same site in cold reserve.

Advanced Power, a Swiss-based independent power plant developer, has postponed construction of a 420-MW gas-fired station in Bocholt until 20134.

Spain

Green subsidies cut

The green energy subsidy scheme has become the latest victim of Spain's ongoing debt crisis. In January the Government announced it would not offer subsidies to new renewable energy plants, though it will continue to make payments to those already registered and approved for subsidies. It denies this will affect its ability to meet demanding EU renewable energy targets.

Middle East

Integrated energy market

Countries in the Middle East and North Africa region are planning to create a single energy market by integrating energy networks5.

The Kuwait-based development fund, The Arab Fund for Economic and Social Development, has contracted CESI Middle East, a power systems consulting company, to develop a plan for integrating the electricity and gas networks of 20 Arab countries across the region by 20306.

China

Investments in Europe

China's state-owned power companies continue to invest in assets of European utilities. Portugal has sold a 25% stake in its power grid operator, REN, to China's State Grid Corporation. The €387 million transaction was part of Portugal's privatization initiative to meet the terms of its €78-billion European Union and International Monetary Fund bailout loan.

The China Three Gorges Project Corporation has agreed to pay €2.7 billion for a 21% stake in Energias de Portugal (EDP)7.

India

Coal crisis resolved

The Government has directed state-owned Coal India, the country's main domestic coal supplier to sign 20-year fuel supply agreements for power projects due to be commissioned by 2015. This is expected to help development of more than 50 GW of generation capacity8.

South Africa

Nuclear expansion

According to the budget proposal released in February 2012, South Africa has announced an initial US$39.55 billion investment for its nuclear program9.

It is looking at nuclear power to support growth of its energy-intensive mining and manufacturing sectors and create jobs. It is expected to open bidding for 9,600 MW of nuclear power in 201210.

Japan

High gas imports

The near-total nuclear shutdown after the March 2011 Great East Japan Earthquake has increased reliance on gas-fired plants and Japan is exploring the possibility of importing LNG from the US11.

Japan saw a 28% year-on-year rise in LNG imports for the 12 months ending January 201212. There has also been a recent trend of Japanese trading houses buying stakes in North American unconventional plays to secure fuel supplies.

Malaysia/Indonesia

Power trade

Indonesia plans to start large-scale electricity trading with Malaysia in 2014, after the completion of the 275 kV transmission line connecting Indonesia's West Kalimantan region and Malaysia's Sarawak region.

Indonesia imports less than 1 MW of electricity from a micro-hydro plant in Sarawak. The two countries also plan to lay a 250 kV subsea cable to deliver electricity from Indonesia's South Sumatera coal-fired power plants to Peninsular Malaysia13.

CIS

Pipeline construction expected

A final investment decision on the off-shore section of the South Stream project is expected by November 2012, with construction expected to start in December 2012.

South Stream, a transnational gas pipeline project starting in Russia and connecting other parts of Europe, is designed for a maximum annual throughput of 63 billion cubic meters. The project is expected to diversify Russia's natural gas supply routes and improve Europe's energy security.



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1"Brazil, Argentina to create company for electric projects – report," Dow Jones International News, 17 February 2012, via Dow Jones Factiva.

2Matthew Daly, "First new nuclear plot in three decades is approved," Associated Press, 10 February 2012, via Dow Jones Factiva.

3"Sweden-Norway green tags market to take shape over several years, observers say", Renewable Energy Report, 20 February 2012, via Factiva.

4"Power-profit collapse threatens German gas-plant closures", Mist News, 8 March 2012, via Factiva.

5"Country to Ink Power Projects With Six Countries," All Africa, 3 January 2012, via Factiva, ©2012 AllAfrica.

6"Arab countries study pan-Mena energy market," Al Bawaba, 27 February 2012, via ISI Emerging Markets.

7"Chinese power firms rev up European shopping binge," China Business News, 10 February 2012, via Factiva, ©2012 Contify.com.

8"Coal India to sign supply guarantee agreements," Financial Chronicle, 15 February 2012, via Factiva, ©2012 Deccan Chronicle Holdings Ltd.

9"UPDATE 1-S.Africa plans more funding for nuclear plants," Daily News, 29 February 2012, via Factiva, ©2012 Independent Newspapers (Pty) Ltd.

10"REFILE-S.Africa goes big on nuclear a year on from Fukushima," Reuters News, 9 March 2012, via Factiva, ©2012 Reuters Limited.

11"Japan reported to be in talks with potential US LNG exporters," IHS Global Insight Daily Analysis, 2 March 2012, via Factiva, ©2012 IHS Global Insight Limited.

12"Japan Still on LNG Buying Spree," International Oil Daily, 21 February 2012, via Factiva, ©2012 Energy Intelligence Group Inc.

13"RI-Malaysia power trade to begin 2014," The Jakarta Post, 28 February 2012, via Factiva, ©2012 The Jakarta Post.

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