HRW Briefings

Vattenfall to spend $1.93 billion on modernization

Sweden-based European energy conglomerate Vattenfall says it will invest about US$1.93 billion in modernizing and increasing production at its hydroelectric plants.

Amongst the biggest of Vattenfall’s projects is refurbishment of the 94 MW Storuman plant, which will see an increase in production of 8 GWh per year after two new turbines are installed. Vattenfall says the Storuman refurbishment will cost about $40 million and will begin in 2014.

Other facilities will receive more efficient turbines and generators that will provide more energy from current water volumes, the company says.

Already this year, Vattenfall has completed a $148.5 million investment in the 158 MW Akkats plant.

The company says hydropower accounts for about 20% of its total electricity generation and 41% of Sweden’s total supply.

Vietnamese plants raise discharges for drought relief

Operators of four hydro plants in Vietnam’s Quang Nam Province were asked in May to increase their water discharge to save about 15,000 hectares of drought-stricken rice growing areas.

Owners of the 190 MW Song Tranh 2, 70 MW Song Con, 210 MW A Vuong and 220 MW Dak Mi 4 complexes received the request from Vietnam’s Ministry of Industry and Trade and utility company Electricity of Vietnam. The four hydropower plants sit on the Vu Gia and Thu Bon rivers in central Vietnam.

Complying with the government’s requests might be difficult, however, as upstream water levels are already low at some of the facilities, say operators.

Brighter news came from the 170 MW A Luoi plant, which began producing power recently with the installation of the first of two turbines for the US$155.5 million complex, which has been under construction since 2007.

Owner Central Hydropower Joint Stock Co. announced that Cavico Corp. broke through A Luoi’s final section of tunnel in April 2011. The second turbine is expected to come online by the end of 2012.

The 94 MW Storuman project is one of three Vattenfall plants undergoing an upgrade valued at US$1.93 billion.

Switzerland, Germany and Austria agree to pumped-storage development initiative

A joint initiative signed by Germany, Austria and Switzerland calls for the development of more pumped-storage power plants.

The document — signed in May by Reinhold Mitterlehner of the Austrian Ministry of Economics and Technology; Phillipp Rosler of Germany’s Ministry of Economy, Family and Youth; and Doris Leuthard of the Swiss Council for the Environment, Transport, Energy and Communications — declares pumped storage is essential to Europe’s energy and climate objectives.

European countries have agreed to lower their greenhouse gas emissions 20% by the year 2020 — a goal fueled in large part by investments in forms of renewable generation like wind and solar power.

As the initiative notes, however, “pumped storage power plants are the only industrially available storage technology present,” and their development is essential to “offset the volatile supply of wind and solar systems.” The agreement not only calls for the expansion of existing pumped-storage facilities but also cross-border transmission of energy currently being produced.

Colbun not looking to dump holdings in Chile’s HidroAysen project…

Chilean power company Colbun denies reports it plans to unload part of its holding in the 2,750 MW HidroAysen project.

Colbun has essentially stopped HidroAysen’s development from progressing by suspending studies associated with the project’s transmission line, citing a lack of governmental support.

Since then, local media has speculated that Colbun was looking to divest part or all of its 49% interest in the project. Although the company has denied these reports, it has said it might be willing to modify its share if it would help the project progress through Chile’s securities regulator.

The HidroAysen project would entail the construction of five dams on the Baker and Pascua rivers, along with a 2,000 km-long transmission line to bring power from the generating sites to Santiago.

…while 640 MW Cuervo plant gets go-ahead

Meanwhile, Chile’s Environmental Evaluation Commission has approved the 640 MW Cuervo plant on the Cuervo River.

Energia Austral anticipated approval of the project some time in 2011 when it submitted the project for environmental evaluation in August 2009, although four rounds of review by various Chilean agencies delayed the go-ahead. The company says previous environmental impact assessments found the US$735 million project could have negative environmental and economic impacts, although those have been addressed. Concrete dams would be built on each of the branches of the Cuervo River. They will form a reservoir linking the Yulton and Meullin lakes, flooding an area of 5,863 hectares. Construction of the project is expected to take about 56 months.

Poland’s 100 MW Niedzica facility changing hands

The Polish Ministry of Treasury has signed a preliminary agreement that would sell the 100 MW Niedzica plant to Czech utility company Energo-Pro. The company has been in talks with the Polish government since September 2011, although finalization of the transaction has been postponed several times due to legal issues with land surrounding the facility.

Niedzica is currently owned by the Polish government and is in the Pieniny Mountains in the southern part of the country.

Financial details of the transaction were not disclosed, but it is expected that the deal will be completed in the first half of 2013.

The 100 MW Niedzica hydropower facility has found a buyer in Czech energy company Energo Pro, the Polish government says. Plans to complete the sale are being finalized.


Island nations banding together for hydroelectric, renewable power development

A declaration adopted by 20 small island states could potentially increase the percentage of hydroelectric power in their overall energy mixes.

The plan — called “The Barbados Declaration” — was adopted at the United Nations’ Achieving Sustainable Energy for All in Small Island Developing States Conference recently hosted by Barbados.

The declaration calls for “universal access to modern and affordable renewable energy services,” while also helping to alleviate poverty through economic opportunity.

The declaration says delegates “remain deeply concerned that most small island developing states are highly dependent on imported oil and other fossil fuels for transport and electricity generation. This is a major source of economic vulnerability.”

Amongst the hydropower-related measures included in the declaration are Barbados’ pledge to increase its share of renewable energy to 29% by 2029; Mauritius’ commitment to increase its share to 35% by 2025; Maldives’ goal of carbon neutrality by 2020; and Seychelles’ promise to produce 15% of its energy supply from renewable sources by 2030.

Meridian Energy backs out of Mokihinui project, another New Zealand project progresses

Meridian Energy has announced it will not proceed with its 100 MW Mokihinui plant in New Zealand by withdrawing the project from the Environment Court process.

The New Zealand-based company says it intended the US$300 million facility to be built on the Mokihinui River north of Westport but pulled the plug after spending more than $18 million on development, planning and legal work.

The controversial project won resource consents in April 2010 but faced appeals from environmental groups and the country’s Department of Conservation. Meridian Energy would have also been required to meet separate Conservation Act processes because the project would have had an effect on public conservation land.

“Our recent commercial review of the project determined it was not prudent to proceed further given the high costs and the risks of the process involved,” says Meridian Energy Chief Executive Mark Binns.

Another hydro project has found more success in the midst of the regulatory process. State-owned mining company Solid Energy received resource consents for a scheme that will use water from its Stockton Mine in Buller, New Zealand. The scheme would produce 195 GWh of electricity annually.

Solid Energy’s application was turned down by the Buller District and West Coast Regional Councils in mid-2010, but the company’s appeal to the region’s environmental court was approved essentially as proposed.

“The environmental impact of this hydro scheme is extremely low in comparison to other generation options,” says Solid Energy Chief Operating Officer Barry Bragg. “It doesn’t involve damming large rivers, it sits alongside existing mine infrastructure and would actually support the mine’s program by further improving the quality of water leaving the site.”

Solid Energy’s scheme is actually the second of two hydro plans that would use the Stockton water. The first — a plan by Hydro Developments Ltd. — received consents in 2010 for a plan to harness the same water catchments as those proposed by Solid Energy. However, the companies reached a usage agreement in October 2010 that will prevent conflict. The company did not specify a timeline for construction of the project.

Serbia’s Brodarevo 1 and 2 projects another step closer to reality

Developer Reservoir Capital Corporation has recently received approval from the Republic of Serbia for its 58.4 MW Brodarevo 1 and 2 projects.

The Serbian government published its approval of Reservoir’s Spatial Plan for Special Purposes, which includes the dams and powerhouses for both complexes, two new sections of road between Mijoska and the Montenegro border, and a 110 kV transmission line that will run from Brodarevo to Sjenica.

The plan was received by Commission of the Ministry of Spatial Planning in December 2011 before being opened to public scrutiny by affected communities.

Canadian-based Reservoir Capital began filing licenses for the Brodarevo project in March 2008 before being joined by French developer Global EcoPower in March 2009.

Sri Lankan, Japanese officials open 150 MW Upper Kotmale project

Although final additions are still being made to Sri Lanka’s 150 MW Upper Kotmale plant, the project was officially opened by Sri Lankan President Mahinda Rajapaksa in May. Rajapaksa, joined by Japanese deputy prime minister Katsuya Okada, opened three of the dam’s sluice gates and unveiled a plaque commemorating the event.

The US$475 million run-of-river project was 96% complete in May, according to project developers, with both of the plant’s 75 MW turbine-generator units having been installed.

The Upper Kotmale project is being financed in part by the Japan Bank for International Cooperation, which announced a $270 million commitment to the facility in October 2006.

Sri Lanka’s 150 MW Upper Kotmale project was officially opened in May and is now generating power, government officials say.


Study aims to increase African hydroelectric development investment

Hydroelectric development in the Baro-Akobo-Sobat region of the Nile Basin could receive a boost if a development study attracts the sorts of investments its creators intend. Led by the Eastern Nile Technical Regional Office, which is the technical arm of the Nile Basin Initiative, the development study will support investments to finance not only hydropower but also water supply and sanitation, irrigation, flood control, drought management, navigation, fisheries, watershed management and tourism projects in the Baro-Akobo-Sobat area.

The project is also being supported by the New Partnership for Africa’s Development-Infrastructure Project Preparation Facility and the African Development Bank, which approved a US$3 million loan for the study in May. ADB says the study will be implemented over the span of three years and includes:

— Development of an integrated water resources management and development plan for the BAS sub-basin;

— Identification of investment packages and feasibility studies of select priority investments;

— Identification of multi-purpose, long-term development projects; and

— Consultation with stakeholders, including financial agencies and the private sector.

Chinese Bank approves loan for Pakistan’s Neelum-Jhelum project

The Export-Import Bank of China has approved a loan worth US$448 million for construction of Pakistan’s Neelum-Jhelum hydropower complex.

The $2 billion project is expected to be commissioned in 2016, although developer Water and Power Development Authority wants to expedite construction due to stipulations of the Indus Water Treaty.

Both Pakistan’s Neelum-Jhelum plant and India’s 330 MW Kishanganga plant are being built on tributaries to the Neelum River. According to the Indus Water Treaty, the country that completes its project first will have priority rights to the river’s waters.

Costa Rica’s Reventazon hydro plant gets IDB loan

The Inter-American Development Bank has approved a loan worth US$670 million to finance Costa Rica’s Reventazon project, according to documents provided by the bank.

IDB says funding will go to the “design, construction, operation and maintenance” of the 305.5 MW plant, including its transmission lines, substations and access roads. The Reventazon facility is expected to cost $1.1 billion, with a commissioning scheduled for 2016.

Project developer Instituto Costarricense de Electricidad previously announced it has awarded contracts to Andritz Hydro and Sistemas de Potencia de Centroamerica for equipment and Cemex for cement work.

The Reventazon plant is part of IDB’s increased investment in renewable energies.

Tractebel announces Estreito completion date, first quarter financial report

The 1,090 MW Estreito facility will be fully operational by the end of 2012, according to information released in May during an investors’ conference call by project developer Tractebel Energia.

Testing of the Brazilian facility — located on the Tocantins River on the border between Tocantins and Moranhao states — began in late-2010/early-2011, with additional turbines coming online since then.

Tractebel says five of the facility’s eight turbine-generators are already producing power, with the sixth expected to begin generating by the end of June. The company also released its first quarter financial report, which shows a 7.4% (US$171.3 million) increase in profit from the same period in 2011. Tractebel operates a dozen hydro plants that have an installed capacity of 6,908 MW.

ASEAN, ADB launch new infrastructure fund

A new fund established for the development of infrastructure could have implications for hydroelectric projects in Asia.

The Association of South East Asian Nations’ board met at the Asian Development Bank’s 45th Annual Meeting in Manila, Philippines, and began operations of its ASEAN Infrastructure Fund. ASEAN says the fund is the largest ASEAN-led initiative in the association’s history and will help finance the development of power, road, rail and water projects.

The infrastructure fund is expected to lend a total of about US$4 billion through 2020, which, with co-financing by ADB and other financiers, could be leveraged to more than $13 billion. ADB will administer the fund. The fund will finance about six projects per year, with a $75 million lending cap per project.

Projects will be selected based on “sound economic and financial rates of return, and the potential impact for poverty reduction.”

ABB selected for Axpo generator refurbishments

Power and automation group ABB has received orders worth about US$20 million to refurbish generators at two Axpo-managed facilities in Switzerland.

The Mattmark and Mauvoism plants, located in the canton of Valais, combine for a capacity of 680 MW.

“The upgrade and refurbishment of these hydropower plants will increase the availability of power supplies and enhance efficiency and reliability,” says Franz-Josef Mongede, an executive from ABB’s power systems division.

The Mattmark project, pictured here, and the Mauvoism project, both in Switzerland, are slated for refurbishment of their generators.


Companies embrace IHA sustainability assessment

Icelandic utility Landsvirkjun’s 84 MW Hvammur hydropower project has undergone a Hydropower Sustainability Assessment Protocol assessment. The protocol, developed by the International Hydropower Association, covers three pillars of sustainability defined by IHA as the “social, economic and environmental” effects of a project, amongst numerous other factors.

“By becoming an IHA Sustainability Partner and implementing the Hydropower Sustainability Assessment Protocol on the Hvammur Hydropower Project, Landsvirkjun has demonstrated their commitment to thoroughly and effectively assessing sustainability,” says IHA sustainability specialist Douglas Smith.

Landsvirkjun operates 13 hydro stations and produces more than 75% of Iceland’s power, making an emphasis on renewable sources essential, says Chief Executive Officer Hordur Arnarson.

“Landsvirkjun places great emphasis on utilizing Iceland’s resources in a sustainable manner and on assessing the possible impact of projects on the economy, society and the environment,” Arnarson says. “We believe that the International Hydropower Sustainability Assessment Protocol can improve the sustainability of plant operation and the preparation and implementation measures for future projects.”

In April, employees of Brazilian hydropower producer Itaipu Binacional completed training in the Hydropower Sustainability Assessment Protocol. The association says 22 members of Itaipu Binacional took part in the week-long course.

“The protocol, a tool to guide sustainability in the sector, provides a common language around which issues of sustainability can be discussed and understood,” Smith says.

Itaipu Binacional is jointly owned and operated by Brazil and Paraguay and operates the Itaipu facility, which has 20 hydroelectric generating units that combine for a total of 14,000 MW of installed power.

The training will help pave the way for an official protocol assessment due to take place later this year, IHA says.

IHA says representatives from Eletrobras, the Brazilian Ministry of Mines and Energy, Cepel Energy Research and ISAGEN were also present at the training.

And in March, Electricite de France confirmed its commitment to using and integrating IHA’s Hydropower Sustainability Assessment Protocol.

“For us, the important thing is the successful future of hydropower, and the future reality of hydropower development and operation is sustainability,” says Xavier Ursat, EDF’s deputy vice president of hydro generation and engineering. “The (assessment) is for us a means to realize this.”

Group to become Bhutan’s first hydroelectric construction company

An application filed in May with Bhutan’s Ministry of Economic Affairs should give the south Asian country its first hydropower construction company.

The company — to be called the Bhutan Energy and Infrastructure Limited — hopes to capitalize on the country’s natural resources by constructing new hydro facilities and accelerating current projects.

BEIL says there are about 30 investors in the company — each of which will contribute a minimum of about US$10,000 of the company’s startup capital. That investment will be used to fund BEIL’s first phase, which includes setting up the company, conducting feasibility studies and other relevant survey work required. The second phase includes the purchase of equipment and the construction of hydropower plants, and money for this will be raised through the sale of public shares.

“Though it is a long-term investment, the company is planning to give dividends to shareholders by the fifth or seventh year of installment,” says Gopal Waiba, secretary of BEIL’s interim executive committee.

BEIL says its primary focus will be on sites with a capacity of 15 to 50 MW.

Norsk Hydro ASA names two new board members

Norsk Hydro NSA recently named two new members of its board of directors. Dag Mejdell started his duties as a board member in May 2012. The board also expanded its ranks in naming Victoire de Margerie to its membership.

Mejdell, of Oslo, Norway, is president and chief executive officer for Posten Norge AS. He is chairman of the International Post Corporation and the Employers Association Spekter and deputy chairman of Evry ASA and SAS AB. Margerie, of Paris, France, is chairman and managing director of Rondol Technology Ltd. She is currently a board member for Ciments Francais, Morgan Crucible and Eurazeo.

Norsk Hydro is primarily an aluminum manufacturer but also owns and operates 17 hydropower facilities in Norway.

World Bank grant to be used for work at Guinea plant

Guinea’s 75 MW Garafiri hydro plant will benefit from a US$18.3 million International Development Association grant awarded by the World Bank. The IDA grant will be added to Guinea’s Electricity Sector Efficiency Improvement Project, which has been previously awarded US$7.2 million in financing from the World Bank and US$4.5 million from the Global Environment Facility. IDA’s grant will primarily be used to purchase distribution equipment and meters for the Kaloum area in downtown Conakry and spare parts for the Garafiri facility. The money will also allow the Guinean Electricity Company to improve its commercial management and energy savings pilot program.

“The aim of the PAESE is to support the efforts of the Guinean government to improve the technical, commercial and operational efficiency of the electricity sector through the funding of critical investments as well as capacity building,” says World Bank Senior Energy Economist Moez Cherif.

Peruvian, Chinese groups sign MOU for 750 MW Santa Maria project

Peruvian utility Energia Azul and the China Gezhouba Group have signed a memorandum of understanding in March that will advance development of the 750 MW Santa Maria plant. The US$1.6 billion facility received a concession from Peru’s Ministerio de Energia y Minas for feasibility studies in September 2008 and is scheduled to come online in 2020 should its development proceed as planned. The project will include a 137 meter-high dam wall, a 515 m3 reservoir, a 29 km-long diversion tunnel and four Pelton turbine-generator units.

Expansion of Namibia’s Ruacana plant complete

An expansion of Namibia’s Ruacana facility should serve as a catalyst in the country’s plan to overcome its energy debt, says President Hifikepunye Pohamba. Pohamba turned Ruacana’s new fourth turbine on at a ceremony in early June, raising the facility’s total generating capacity from 240 MW to about 330 MW.

Even combined with the country’s other sources, however, the government says its total generation falls short of Namibia’s 550 MW of demand. For the time being, Pohamba is encouraging Namibians to conserve energy, although he says he hopes the Ruacana expansion will spark the development of other proposed hydroelectric projects.

The country is still considering the 500 MW Baynes project that would be located at Epupa Falls, and Namibia’s Ministry of Mines and Energy says the area downstream from Ruacana still has as much as 2,000 MW of hydropower potential.

A recently completed expansion of Nambia’s Ruacana powerhouse, pictured here, raised its generating capacity from 240 MW to 330 MW.


Iranian province planning 1,350 MW of hydroelectric expansions

The Iranian province of Kurdistan is planning five hydropower projects that would have a total combined capacity of 1,305 MW, the regional government’s Ministry of Electricity announces.

Speaking at a conference in Istanbul in early June, Minister Kamal Salih said the plans include a 621 MW hydro plant at Mandaw, a 350 MW plant at Taq Taq, and a 261 MW plant at Rashawa. In addition, the ministry says it is planning two smaller run-of-river plants, including a 40 MW facility at Khawalesh and a 30 MW facility at Dereluk. A timetable for completion of the projects wasn’t announced.

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