Finding extraordinary engineers for exceptional clients

China Three Gorges prepares for diversified future

November 17th, 2014

The China Three Gorges Group are planning to diversify its engineering activities, as it prepares for the prospect of less opportunities in the hydroelectric power space.

Reuters reports that the firm's vice-general manager, Bi Yaxiong, told a forum this week that the country's biggest hydropower developer, plans to engage in wind power, solar and other new energy forms, with the market for giant new dams already in decline.
China Three Gorges Dam
Yaxiong added that there will be few worthwhile projects left once the group completes its sixth giant dam at the end of this decade, saying, "While the development and operation of large hydropower on the Yangtze River will remain our core business, we will actively develop domestic wind, solar and other new energies."

He said the firm has gained "competitive advantages" in the construction, financing and operation of giant hydro plants, but the market was now reaching a saturation point.

"Once the downstream Jinsha river project is completed in 2020, (we) face the serious situation of having no large-scale hydropower plants left to build, and we won't be able to take full advantage of our core expertise," he said.

The state-owned firm operates the world's largest hydropower plant at the Three Gorges on the Yangtze river. China Three Gorges, the parent of China Yangtze Power Co Ltd (600900.SS), also runs the huge Xiluodu and Xiangjiaba facilities upstream, both now nearing completion.

Brazilian firms to build 253 MW Nicaraguan hydro plant

November 17th, 2014

Brazil's state-owned utility Eletrobras and the Queiroz Galvao group are to build the Tumarin hydropower plant in Nicaragua.  

The project (pictured, artist's rendition) will be completed in 2019 and is expected to produce 253 MW, which will supply 21 per cent of the country's overall energy consumption.

Centrales Hidroeléctricas de Nicaragua (CHN), a subsidiary of Eletrobras, has announced that the works will cost $1.1bn.

The reservoir will be located 470 km northeast of Managua and will cover 41 square km. The project includes 81 km of electric transmission lines.

Uncertain future for Salvadoran hydro plant

November 17th, 2014

El Salvador's El Chaparral hydropower plant (pictured) does not have a clear future as the government has not announced a new tender to continue the works.

Roberto Lorenzana, head of the Technical and Planning Secretariat of the Presidency, said that the tender will not be opened until the technical and financial viability studies are finished.

The company Astaldi started El Chaparral's construction in 2008. The works were damaged in 2010 by a tropical storm and a new design was required.

The plant will produce 66 MW, or 8 per cent of the country's overall consumption. It is to include a roller-compacted-concrete dam, reservoir, powerhouse containing two 32.2 MW generating units and a 1.42 MW minimum flow unit, and a substation just upstream of the Torola River's confluence with the San Juan River.

Mexico’s energy reform ends its regulatory stage

November 17th, 2014

The energy reform carried out in Mexico has reached the final stage of its regulatory period. The approval of the rules that will develop the reform is imminent. This was announced by Pedro Joaquin Coldwell, Energy secretary of the federal government (pictured). Coldwell said during Mexico's Business Summit 2014 that there will be approved 25 rules.

The reform has entered its first stage of implementation, called Round One. There will be put out to tender exploration blocks and oil and gas extractions. Public and private companies will take part in the bid. There will be offered 169 blocks overall. According to news reports, 109 of those blocks are exploring projects, while the rest are extraction plans.

The federal government wants to hold two other rounds, one per year. An Investment of about $50bn is expected to come to Mexico within the 2015-2018 period.

The Energy secretary said that the previous rules of bidding will be classified according to the kind of deposit or field. The first classification includes shallow waters, whose bid will be held within November's first fortnight. After that, during December's first fortnight, will come extra-heavy oils. And in the first two weeks of January 2015 the bid for non-conventional resources will be held. Besides, in this last stage will be include the bids for Chicontepec oil field, located in the state of Veracruz.

Their previous rules of bidding will be issued within the first two weeks of February 2015 (terrestrial resources) and the same period of the following month (deep waters).

The Energy secretary said that the first contracts will be signed between June and September 2015. Thus by the end of that year the energy reform will be fully implemented.

One of the main changes that the energy reform will bring is the introduction of five-year plans for hydrocarbon tenders. The National Hydrocarbon Commission (CNH) will be the entity that submits each five-year plan to the Secretariat of Energy. This will be done every March in the year concerned. The Contract Areas Five-Year plan will include the tender plans and the contract areas characteristics at least. After that, the Secretariat of Energy will issue the first five-year plan within the first semester of 2015.

Other variation brought by the energy reform's regulations is a change in the energy devices' security rules if they use natural gas or liquefied oil gas. The changes in security matters will affect the supply installations, among other things.

The reform will bring changes in the Mexican Oil Institute (IMP), which will keep belonging to the Secretariat of Energy but from now on will be ruled by a board of directors composed of nine members.

Geothermal energy will receive special treatment. This renewable energy source has a potential of 61,178 GWh per year, but currently only 10 per cent of that amount is generated, according to figures from the National Energy Institute. Mexico is the world's fourth country with biggest geothermal reserves. This fact drove the approval of a Geothermal Law that establishes specialities for this energy source. For instance, exploration permits and concessions will be directly negotiated with the Secretariat of Energy. Before the Geothermal Law it was compulsory talking to the Energy Regulatory Commission (CRE).

An article by CNN Expansion mentioned four key points for the energy reform's success. The first point is transparency, which will be achieved if the contracts signed by the companies always respect the law. The contract's concession will not depend just on one institution but four entities: the Secretariats of Energy and Finance, the National Hydrocarbon Commission and, in the case of petrol, the Mexican Petroleum Fund.

The second point is the clarity of the rules, especially what concerns to environmental protection and conditions of participation.

Protection of competition is the third point. The Mexican government will guarantee competition rules that allow home companies to compete under the same conditions with big multinational companies.

And the last key fact is the state-owned company Pemex's transformation. During the last seven decades Pemex held a monopoly in the energy sector. Now it is the time for Pemex start to "think as a business" as was claimed by its finance manager Mario Beauregard.

Brazil to leapfrog US as world’s biggest biopower market

November 14th, 2014

Brazil is poised to overtake the US as the world’s leading biopower market according to new research.

A report from analysts at GlobalData states that Brazil’s biopower installed capacity was 11.51 GW in 2013 and forecasts that this will rise to an estimated 17.10 GW by 2018, which will make the country the world number one biopower market.

GlobalData says that the US had the world’s largest biopower installed capacity in 2013, with 15.43 GW, but this will only rise to 16.49 GW by 2018. The report states that the country will see slow growth “due to its large existing capacity, which has saturated the market”.Biomass power plant

GlobalData’s alternative energy analyst Harshavardhan Reddy Nagatham said: “A major share of the US’ biopower capacity was installed in the 1980s and 1990s, meaning the country already had 12.82 GW by 2006, while Brazil only had 3.59 GW by that time.

“The nascent Brazilian market is being driven by the government, which has made it necessary for local utility service providers to obtain at least 2 GW of installed biomass capacity through auctions annually, for ten years from 2007.”

Nagatham notes that while there is a possibility of feedstock supply interruptions due to increased deforestation in certain areas, the rise in sugarcane plantations is expected to compensate for this.

“The abundance of sugarcane in Brazil makes the installation of biomass technology a very viable option for power generation.

“Biomass projects will also generate electricity from both sugarcane waste and non-food energy crops, such as eucalyptus and pine trees.”

However Nagatham warns that biopower faces competition from other sectors, such as hydropower, natural gas and wind.

“The biggest challenge to bioenergy will be Brazilian utility companies’ inclination towards wind power and the large drop in wind energy capital expenditure.

“Furthermore, the Brazilian Development Bank, which provides low-interest loans for renewable projects, does not give biomass ventures free access to finance, and instead shows preference towards wind power.”

Aggreko goes top of FTSE 100

November 14th, 2014

Aggreko, the provider of temporary generators, powered to the top of the FTSE 100 on Friday after a reassuring trading update.

The company, which provides equipment used at major sporting events and music festivals, including the US Super Bowl and World Cups, said growth in its Americas business reached 15 per cent in the third quarter. It stood by its existing guidance for full-year profits to hold steady.
“A number of new contracts have been won and contracts renewed, though areas such as Australia, Brazil and Europe remain more challenging,” said Paul Jones, analyst at Panmure Gordon. “Lower oil prices will of course make fuel costs more attractive for major projects.”

Shares in Aggreko rose 3.9 per cent to £16.02.

Enel set to prioritise investment for Latin America ahead of Europe

November 14th, 2014

Enel’s CEO, Francesco Starace says Italy’s largest utility is considering shifting its focus away from Europe altogether, preferring the growing market of Latin America.

With Europe still not emerging from recession, Rome-based Enel is looking at increasing its spending in Latin America from its existing target of $8.7bn over the next five years.

“The growth is here,” Starace told reporters at Enersis’s headquarters in Santiago. “I don’t think we are going to invest much more in Europe.”
Economic growth in Latin America, where Enersis already serves 14.5 million clients, will quicken to 2.3 per cent next year while European economies will expand by 1.6 per cent, according to the average estimate of economists tracked by Bloomberg.

Enersis SA, the company’s Latin American unit will drive the investment. Meanwhile Enel Green Power SpA has budgeted 2.1 billion euros of investments in the region to 2020.

The Italian company’s main European preoccupations at the moment centre around sales of assets. It is looking to sell 4.4 billion euros of assets including units in Romania and Slovakia after it completed a 1.3 billion-euro sale of a stake in SeverEnergia to OAO Rosneft in 2013.

It is also closing the sale of a 17 per cent stake in Spain’s Endesa SA and earlier this year boosted its ownership of Enersis through the purchase of a 60.6 percent stake in the Santiago-listed company held by Endesa.

A reorganization of its Chile and Brazil units will be completed by the first half of next year and its Colombia and Peru units by the end of 2015, Starace said, with Chile especially prominent in its thinking. Enel will spend 2 billion euros in the South American country over the next five years, he said.

Demand response system installed in New York City

November 13th, 2014

A demand response management system has been installed for utility Con Edison and its 3.3 million electricity customers in New York City and Westchester County, New York.

Part of the Smart Grid Demonstration Program funded by the US Department of Energy, project will help Con Edison manage its growing demand response activities and data within a single platform allowing it to integrates residential, commercial and industrial demand response programmes and distributed device and generation technologies.

Based on Alstom’s e-terraDRBizNet 3.0, the system provides utilities the digital intelligence to make fast decisions to compensate energy flow to optimise existing assets. It can be used from small pilot deployments to large industrial-grade needs, such as efficiently calling on a large complex portfolio of energy resources. It can also manage groups of aggregators and their resources, enabling Con Edison to reduce load within targeted overloaded areas, the company says.

In addition to automating Con Edison’s processes, Alstom technology also provides the utility with advanced performance and settlement capabilities, measuring groups of aggregator resources’ performance and automatically applying the current tariff rules to calculate the payment for participating load reduction.

The system forecasts available load curtailment capacity and has been deployed with the capability to send signals for automatic load control to aggregators.

Low carbon residential heating and hybrid market set to triple by 2017

November 13th, 2014

New research into the UK residential market for low carbon heating and hybrid heat and power products suggests the market will grow from 30,000 installations in 2014 to 90,000 installations in 2017. 

The research identifies a number of important drivers contributing to the growth of low carbon heat and power including new products entering the market such as hybrid heat pumps and fuel cell micro-CHP (pictured) becoming commercially available to UK customers and new financing schemes to remove the high up-front cost for customers as well as expectations of rising energy prices to 2020 and beyond and cost reductions arising from economies of scale in manufacturing and a more competitive installer market.

However, Delta-ee’s latest research also reveals that while a key driver for growth is the domestic Renewable Heat Incentive (RHI), introduced in spring 2014, there are problems. For example, the RHI does not address the high upfront cost barrier of such systems, and does not address the issue of local electricity grid connection – which can be a significant additional cost for heat and power systems. It is also is administratively complex, the report adds.

Steven Ashurst, Senior Analyst at Delta-ee comments: ‘It’s still early days for the low carbon heat market in the UK, but by 2017 we expect it to capture around 1-in-20 of the installation market.’

New microgrid project backed by US DoE

November 13th, 2014

US Department of Energy cash is to fund R&D and testing of advanced microgrid controllers capable of managing and controlling such systems to improve viability, reliability and resiliency of the electric distribution grid.

Under the auspices of a $1.2 million Microgrid Research Development and System Design (RD&D) project, Alstom is one of seven organisations to receive microgrid funding ($8 million total) from the DoE.

The company will research and design community microgrid systems for the Philadelphia Industrial Development Corporation (PIDC) and the Philadelphia Water Department (PWD) in the state of Pennsylvania, through a demonstration project that will be implemented at the Philadelphia Navy Yard, a 1200-acre former naval shipyard and now a business campus with more than 145 companies occupying more than two million square metres.

Upon completion, part of the campus will be self-sufficient in generating, managing and storing electricity and will be able to operate independently from the main grid, in particular in case of an outage due to extreme weather or other extraordinary event.

Follow us: