Country affirms commitment to Rogun, funds modernization of Kayrakkum
Facing chronic electricity shortages during winter months as demand for electricity exceeds supply by 24%, Tajikistan is moving forward on work to increase installed capacity by building a new plant and modernizing an existing hydropower facility.
Tajik Deputy Minister of Energy and Water Resources Poulod Muhiddinov affirmed the country’s commitment to the 3,600 MW Rogun project in mid-June, and in early August funding approved modernization of the 126 MW Kayrakkum Dam project.
Muhiddinov said the Rogun project, being developed by Barki Tojik, and the Central Asia South Asia Electricity Transmission and Trade Project (CASA 1000), are “strategic goals” for the country.
Work on the Rogun plant (also spelled Roghun) began in 1980 but stalled at the end of the Soviet era. The World Bank Group committed to helping Tajikistan assess resumed work on the project http://www.hydroworld.com/articles/2009/03/world-bank-urges-regional-hydropower-trade-in-central-asia.html in March 2009.
For Kayrakkum Dam, the European Bank for Reconstruction and Development (EBRD) and other donors approved US$75 million in funding for the first phase of modernization of the project on the Syr Darya River. Kayrakkum (also spelled Kairakkum or Qairokkum) was commissioned in 1957.
Total cost of the first phase of modernization is US$75.7 million. This will be provided by EBRD (US$50 million), along with a US$10 million loan and a US$11 million grant from the Pilot Program for Climate Resilience under the Climate Investment Funds. The remaining US$4.7 million includes donor financing from the governments of Austria and the UK and EBRD’s Shareholder Special Fund for consultancy services.
The first phase of the upgrade is to increase capacity to 142 MW from 126 MW by the installation of two new and larger turbines.
APG, Aquila Capital partnering for development in multiple countries
Investment firms APG Asset Management and Aquila Capital have formed a partnership to invest an anticipated US$678.8 million in the development and acquisition of European hydroelectric plants.
Holland-based APG said it has commissioned Germany’s http://www.hydroworld.com/articles/2012/03/germany-s-aquila-interested.html Aquila Capital to “establish an investment vehicle dedicated to hydropower infrastructure,” with APG contributing about $340 million to the venture. The remainder of the projected investment will come in the form of debt financing.
“Hydropower is the most efficient of all main energy sources and ticks the right boxes for us in terms of the risk-return profile and the high cash flow visibility, as well as its strong, sustainable profile,” APG Managing Director of Global Real Estate and Infrastructure Patrick Kanters said. “There are relatively few companies with the expertise and industry networks to access the best opportunities in the sector, which is why we have teamed up with Aquila Capital.”
Aquila Capital will provide operational management of the hydropower assets and portfolio management services for the partnership.
“These investments are supported by macroeconomic fundamentals and offer the potential to generate above average returns on a sustainable basis that are uncorrelated with mainstream financial markets,” Aquila Capital Chief Executive Officer and Co-Founder Roman Rosslenbroich said. “APG is similarly recognized as a global leader in investing in these areas, so we are particularly pleased to be partnering with them in this venture.”
The companies said European investment yields on hydro projects are in the high single-digits depending on plant location, electricity prices, construction and regulatory risks involved.
EIB provides loan for development of pumped-storage project
Austria’s state-owned utility Illwerke AG has received a US$381 million loan from the European Investment Bank to support construction of the Obervermuntwerk 2 pumped-storage project, according to a contract signed in Bregenz.
The 360 MW pumped-storage plant is designed to reduce network losses, http://www.hydroworld.com/articles/2014/04/eib-increases-loan-for-20-mw-vranduk-hydroelectric-plant.html EIB said, and will add balancing capacity to the network and provide additional regulating energy.
“Europe is dependent on a secure, efficient and flexible power supply,” EIB Vice President Wilhelm Molterer said. “And the EIB sees this as one of the core goals of its financing. Obervermuntwerk 2 will play a key role in generating environmentally friendly power.”
The project will be Illwerke’s second-largest power station once put into operation in 2018. It is designed as an underground station between the Silvretta and Vermunt reservoirs parallel to the existing Obervermuntwerk project.
“We are pleased to have found a competent and reliable financing partner for our projects in the European Investment Bank,” Illwerke AG Board Member Christof Germann said.
The EIB loan also included portions to help finance construction of the 13 MW Rellswerk hydropower plant and Burs substation.
Exim Bank of India adds line of credit for 64 MW Ketende project
The Export-Import Bank of India has extended a US$82 million line of credit to the Democratic Republic of Congo to finance the completion of its 64 MW Ketende project in Western Kasai province.
The agreement, signed at DRC’s embassy in New Delhi, is the second such Exim Bank loan for Ketende (also spelled “Katende”). The bank previously agreed to provide $168 million for the project in July 2011, in addition to a $42 million line of credit for the 9.3 MW Kakobola plant http://www.hydroworld.com/articles/2010/10/india-provides-loan.html in October 2010.
Developer submits EIS for 110 MW Oco 2010 project
Developer Ocona Hydro has filed an environmental impact assessment with Peru’s Ministerio de Energia y Minas for the development of a 110 MW hydro project.
The Oco 2010 plant will be located in Peru’s southern Arequipa region and use water from the Ocona and Chichas rivers, the assessment said, with its output being sent to the National Electric Interconnected System (SEIN).
The ministry’s office for energy and environmental affairs held a hearing on the assessment in July.
Last turbine operating at 5,850 MW Huaneng Nuozhadu
The last generating unit at China’s 5,850 MW Huaneng Nuozhadu plant is now in operation, developers have reported.
Located in China’s Yunnan Province on the lower reaches of the Lancang River, the plant is now the fourth-largest project in China.
The Huaneng Group said the complex’s powerhouse includes nine 650 MW generating units — the first of which was put into operation in September 2012.
http://www.hydroworld.com/articles/print/volume-16/issue-1/articles/chinarsquos-hydro-construction-activity-the-role-of-multi-purpose-projects.html The project’s vertical core-wall rockfill dam is the tallest in China and third highest in the world at more than 261 m high, according to the developer, while the spillway is Asia’s largest in size and No. 1 in the world in terms of flood discharge and flow velocity.
The plant is part of China’s initiative of making the http://www.hydroworld.com/articles/2013/07/alstom-commission-s-last-unit-at-china-s-6-400-mw-xiangjiaba-hydropower-plant.html Yunnan Province a power exporter for surrounding areas and is expected to save the equivalent of 9.56 million tons of coal annually.
Hydro Tasmania cuts workforce shortly after celebrating centennial
Hydro Tasmania is reducing the size of its workforce by 9% to “better manage the financial and market challenges it faces in the next few years,” the Australian utility and hydropower project operator said in a statement.
The company said it expects profits in the 2014-2015 fiscal year will fall below about US$18.9 million, which is less than a tenth of current levels.
http://www.hydroworld.com/articles/2014/06/hydro-tasmania-invites-public-to-take-part-in-company-s-centennial-celebration.html Hydro Tasmania said the turnaround was first flagged at the release of the past year’s financial results and is the “result of a range of factors,” including “the softening demand in the National Electricity Market and the effect of the repeal of the price on carbon market prices, uncertainty about the future of the Renewable Energy Target, the impact of the energy reform process and the ongoing downturn in the consulting market.”
The utility is implementing what it says are “business-wide process improvements,” with an internal restructuring having been under way since March.
Hydro Tasmania http://www.hydroworld.com/articles/2013/09/hydro-tasmania-names-steve-davy-as-new-ceo.html Chief Executive Officer Steve Davy previously requested expressions of interest from employees for voluntary redundancies, the company said, “and a number of people had left as a result.” Hydro Tasmania will now rely on voluntary redundancies, attrition and compulsory redundancies to reduce a further 50 positions, the company said. The process was expected to be completed by early September. The utility employed 1,092 people in late June.
This announcement came just a few weeks after Hydro Tasmania invited the public to help the company celebrate its 100th anniversary.
The occasion was marked with a special Tasmanian Symphony Orchestra concert, a schools initiative, power station tours, and a “Back to Waddamana Day” that recognized the utility’s first hydroelectric plant.
The creation of the company’s original Hydro Electric Department traces its roots to October 1914, although the Waddamana project wasn’t completed until 1916. This year’s events commemorated not only those who worked on the Waddamana plant, http://www.hydroworld.com/articles/2013/09/hydro-tasmania-names-steve-davy-as-new-ceo.html Hydro Tasmania said, but those who came after as well.
Ground broken on 4,320 MW Dasu after financing received
Pakistani Prime Minister Nawaz Sharif and other government officials officially broke ground on the 4,320 MW Dasu plant in late June. Located on the Indus River, http://www.hydroworld.com/articles/2012/06/world-bank-to-help.html the run-of-river project will be about 240 km upstream from the 3,480 MW Tarbela project near Dasu in the country’s Kohistan district.
Only 7,000 MW of the Indus River’s potential 40,000 MW of hydro capacity have been developed so far, Sharif said, making development along the waterway a priority.
The project is to be owned and operated by Pakistan’s Water and Power Development Authority (WAPDA).
This announcement came just two weeks after the World Bank Group’s International Development Association approved a funding package to help develop the 2,160 MW Dasu Hydropower Stage-I (DHP-1) project.
IDA’s financing comes in the form of a US$588.4 million credit and a partial credit guarantee of $460 million that are intended to help mobilize commercial financing for the $4.2 billion plant.
DHP-1 is part of the government’s plan to spur long-term economic growth while also helping decrease carbon emissions.
“The program is an important part of the transformational energy initiative of Pakistan, in which the support from across the World Bank Group is focused on helping Pakistan’s energy sector out of its crisis and onto a more sustainable path that supports economic growth,” http://www.hydroworld.com/articles/2014/05/world-bank-group-approves-financing-for-nepal-s-kabeli-a-hydroelectric-plant.html World Bank official Rachid Benmessaoud said.
The bank said the project represents its first attempt to finance a large infrastructure project on a sequential basis through a combination of credits and guarantees to mobilize the full financing over the construction period. The credit carries standard IDA terms, with a maturity of 25 years and a five-year grace period.
Dasu Stage-1 is the first component of http://www.hydroworld.com/articles/2012/06/world-bank-to-help.html a complex that could eventually have a capacity of about 4,320 MW.
AfDB commits to Jiji, Mulembwe projects
The African Development Bank Group’s board of directors has approved a US$22 million grant to help fund development of the 31.5 MW Jiji and 16.5 MW Mulembwe projects.
The investment is the largest made in the country’s infrastructure since the 1980s, according to the http://www.hydroworld.com/articles/2014/03/drc-s-controversial-inga-3-hydropower-project-receives-ida-technical-assistance-grant.html AfDB, and comes from the bank’s Fragile States Facility.
The Jiji and Mulembwe plants will more than double Burundi’s currently installed hydroelectric capacity, increasing the national electrification rate from the current 5% to some 8% by 2019.
The $270 million project is also being supported by a consortium of private donors, including the http://www.hydroworld.com/articles/2014/06/world-bank-funds-pakistan-s-2-160-mw-dasu-hydroelectric-project.html World Bank, the http://www.hydroworld.com/articles/2014/04/eib-increases-loan-for-20-mw-vranduk-hydroelectric-plant.html European Investment Bank and the http://www.hydroworld.com/articles/2014/01/a-2030-framework-for-european-hydropower.html European Union.
“AfDB was one of the first donors to get involved in the energy sector after the conflict in Burundi,” said Alex Rugamba, director of the bank’s Energy, Environment and Climate Change Department. Rugamba continued: “The production of additional electricity will help diversify the economy by stimulating the private sector and promoting job creation.”
Alstom board accepts General Electric offer
American conglomerate General Electric has completed a multi-billion dollar deal that gives the company significant shares in Alstom’s power and grid businesses.
The deal, approved unanimously by Alstom’s Board of Directors, included a GE offer of US$13.5 billion enterprise value and $3.4 billion of net cash. The company said the all-cash transaction is valued at 7.9 pro forma earnings before interest, taxes, depreciation and amortization (EBITDA) of Alstom’s renewable, thermal and grid units.
Terms of the deal will see GE assume 50% control of Alstom’s grid and renewables businesses, which includes hydroelectric power.
GE will also create a 50/50 alliance for Alstom’s global nuclear and French steam units.
“We look forward to working with the Alstom team to make a globally competitive power and grid enterprise,” GE Chairman and Chief Executive Officer Jeff Immelt said. He added: “We also look forward to working with the French government, employees and shareholders of Alstom. As we have said, this is good for France, GE and Alstom.”
In addition to the three joint ventures, the deal includes a memorandum of understanding that would see GE sell its signaling business to Alstom for about $825 million, and for multiple collaboration agreements involving services, technology, supply chain, manufacturing and commercial support in the USA.
GE said the transaction will now proceed with Works Council consultation, customary regulatory approvals and Alstom shareholder approval. The deal is expected to close in 2015.
http://www.hydroworld.com/articles/2014/05/hydroelectric-power-strong-for-alstom-in-fy-2013-14.html Alstom’s hydropower branch recorded a strong performance through Fiscal Year 2013/14, posting a 40% increase in orders over the previous fiscal year. http://www.hydroworld.com/articles/2014/04/alstom-opens-brazilian-training-center-for-hydroelectric-power-service.html Alstom is one of France’s largest private sector employers, with 18,000 staff. The company reportedly has a market value of about $11.5 billion.
U.S., Kurdish forces regain control of Iraq’s 750 MW Mosul Dam
In a highly-coordinated operation involving U.S., Kurdish and Iraqi combined forces, Mosul Dam was returned to Iraqi control on August 19.
Mosul and its 750 MW hydroelectric plant were seized by the Islamic State of Iraq and Syria (formerly ISIS or ISIL now known as IS) earlier in the month.
American forces coordinated more than 25 airstrikes as part of the action, allowing the Kurdish and Iraqi troops to mount a ground offensive. Progress was slowed by mines and booby traps placed in the dam complex.
Ground forces cleared more than 500 IS fighters from the dam and power plant, giving Iraq full control of the complex.
This dam is strategic in that its destruction or failure could be disastrous for areas downstream on the Tigris River, covering them in up to 65 feet (19 metres) of water.
Mosul Dam was completed in 1984 on a soluble foundation of gypsum, anhydrite and karstic limestone. To save construction time, foundation grouting was not completed ahead of time. The dam began seeping immediately upon filling of the reservoir in 1985, and in 2006 the U.S. Army Corps of Engineers concluded that “in terms of internal erosion potential of the foundation, Mosul Dam is the most dangerous dam in the world… If a small problem at Mosul Dam occurs, failure is likely.”
Update on hydropower activity
Significant activity is taking place in India with regard to hydropower, including dedication of two new plants, commissioning of a new unit and acquisition of assets.
In mid-August, Prime Minister Narendra Modi dedicated the 44 MW Chutak and 45 MW Nimoo Bazgo projects in his first official visit to the Ladakh Region of Jammu & Kashmir State. NHPC Ltd.http://www.hydroworld.com/articles/2009/04/equipment-installation-sought-for-india-s-44-mw-chutak.html commissioned Chutak on the Saru River and http://www.hydroworld.com/articles/2008/01/indias-nhpc-extends-hm-equipment-bid-dates-for-two-projects.html Nimoo Bazgo (also spelled Nimmo Bazgo) on the Indus River last year.
Modi noted that the difficult terrain of the Ladakh Region had isolated the borderland region from the national grid, making it dependent on traditional fuels, small hydro and diesel. That situation is changed by the two rare hydropower projects, constructed at an altitude of 10,500 feet (3000 metres) above sea level.
In addition, Bharat Heavy Electricals Ltd. (BHEL) commissioned the fifth of six 68 MW turbine units at the 412 MW Rampur plant on the Satluj River in Himachal Pradesh in early August. Each of http://www.hydroworld.com/articles/2007/01/india-approves-construction-of-412-mw-rampur.html Rampur’s units are Francis-type turbines, operating at a head of 119 meters with matching synchronous generators of 200 rpm. BHEL supplied static excitation systems, main inlet valves, digital governors, a control and monitoring (SCADA) system, station auxiliaries, gas-insulated switchgear and balance-of-plant services.
The run-of-river plant is operated by state-owned developer http://www.hydroworld.com/articles/2012/08/india-bhutan-collaborating-to-develop-600-mw-kholongchu-and-570-mw-wangchu.html SJVN Ltd.
And finally, in late July, financial firm Reliance Group signed a memorandum of understanding to acquire three hydro plants from Jaiprakash Power Ventures Ltd.
The three plants, acquired by Reliance subsidiary Reliance CleanGen Ltd., have a cumulative capacity of about 1,800 MW, making the company India’s largest private sector operator of hydropower. Included in the deal are the 300 MW Baspa Stage 2 and http://www.hydroworld.com/articles/2012/07/u-n–recognizes-india.html 1,091 MW Karcham Wangtoo projects — both in Himachal Pradesh — and the 400 MW Vishnuprayag plant, which is in Uttarakhand.
New development being encouraged in Canada, USA
Significant recent work has occurred to move forward development of new hydroelectric projects in North America.
For example, in Canada, Travelers Capital Corp. arranged CAN$61 million (US$56 million) in non-recourse project financing for construction of the 16-MW Box Canyon project in British Columbia, Canada. The project, on three creeks on the western shore of Howe Sound, will be built by Box Canyon Hydro Corp., and the company will sell all power generated to provincial utility BC Hydro under a 40-year power purchase agreement.
In addition, Innergex Renewable Energy Inc. recently signed an agreement with the In-SHUCK-ch Nation to develop six run-of-river projects with a total capacity of 150 MW in British Columbia. Under the 50-50 partnership agreement, the project will be developed on six creeks in the nation’s traditional territories, and the partners are in discussion to secure long-term power purchase agreements with BC Hydro.
In the USA, the Army Corps of Engineers released its Engineering Circular to provide guidance on how it will process requests from non-Corps entities to alter civil works projects owned by the Corps. The guidelines are pursuant to the Corps’ Section 408 permitting process, which authorizes the Secretary of the Army to grant for the alteration, occupation or use of Corps properties if the Secretary determines the activity “will not be injurious to the public interest and will not impair the usefulness for the project.”
The Corps is working with more than 65 non-federal partners to advance the development of hydro at its non-powered dams. The guidance will be applied to conventional hydro projects being developed at non-powered Corps dams, as well as such projects as hydrokinetic facilities that would use jetties, levees and navigation channels.
The business of Brazilian hydro
A lot of the news coming out of Brazil at this time relates to the business side of hydroelectric power.
Brazilian energy regulator Agencia Nacional de Energia Eletrica (ANEEL) recently reported that hydroelectric generators paid BRL1.1 billion (US$488 million) in the first half of 2014 in compensation to local, state and national governments for use of Brazil’s water resources.
ANEEL said http://www.hydroworld.com/articles/print/volume-19/issue-4/articles/new-development/brazil-a-stronghold-of-hydro-development.html Brazil’s hydro generators paid BRL896.6 million (US$396.3 million) as compensation for water resources use, “compensacao financeira pela utilizacao de recursos hidrocos” (CFURH), while the remaining BRL295.9 million (US$130.8 million) was in the form of royalties paid by the bi-national, 14,000 MW Itaipu project on the Parana River.
The CFURH funds were distributed to 698 municipalities in 21 states, the federal district and the national government. The transfer of royalties went to 347 municipalities in six states, the federal district and the national government. Compensation was paid by 96 players responsible for 179 hydroelectric projects and 190 reservoirs.
Municipalities and states each receive a 45% share of collections. The remaining 10% goes to the national government.
In other financial news, Brazil’s Banco Nacional de Desenvolvimento Economico e Social (BNDES) approved a US$143 million credit line to energy firm Tractebel. The money will help fund Tractebel’s 2014 investment program, which includes maintenance of the http://www.hydroworld.com/articles/print/volume-21/issue-6/articles/plant-rehabilitation/boosting-hydro-capacity-through-refurbishments.html 1.42 MW Salto Santiago and 226 MW Passo Fundo projects.
Finally, a federal Brazilian court has rejected a request from a public prosecutor that would have suspended work on the 11.2 GW Belo Monte plant. Prosecutors had argued that developer Norte Energia did not properly consult with aboriginal groups potentially impacted by http://www.hydroworld.com/articles/2014/02/consortium-wins-bid-for-belo-monte-hydropower-project-transmission-lines.html Belo Monte. The court found “inconsistencies” in claims that access to drinking water would be restricted, a Norte Energia statement said. “[Norte Energia] has met all conditions stipulated in the project’s environmental license,” the developer said.
Construction of the US$13 billion project, which will be located along the Xingu River in Brazil’s northern Para state, has been halted a number of times since its initial development began. Belo Monte has a completion deadline of 2018, although Norte Energia recently filed a request for a construction extension.
Hydro projects being sold, modernized in Finland
Statkraft has entered into an agreement with a Finnish consortium for the sale of hydropower assets in Finland. Under the terms of the US$325 million deal, a consortium that includes Vantaan Energia, Turku Energia, Oulun Energia, Pori Energia and Oulun Seudun Sanko will assume Statkraft’s shares in three hydropower projects that, cumulatively, account for about 66 MW of installed capacity.
Included are Statkraft’s 13% interest in the Harjavalta plant and 100% interests in the Koivukoski, Kolsi and Korkeakoski projects.
“The decision to sell the Finnish power plants is based on strategic considerations,” Chief Executive Officer Christian Rynning-Tonnesen said in a statement. “After completing the transaction, Statkraft will not have power generation assets in Finland, but we will still be an active participant in the Finnish electricity market.”
In other news from the country, utility Kemijoki Oy selected the Caverion Corporation to increase the capacity at its 110 MW Seitakorva plant. Caverion said the project includes the refurbishment of Seitakorva’s machinery and electrical and automation systems. The work was to begin in the summer of 2014, with Caverion responsible for design, installation and management services.
Preparations have already begun, the utility said, with as many as 50 Caverion employees to work on the project before it is completed in November.
The overhaul is part of a Kemijoki Oy plan to increase its cumulative generating capacity and decrease its environmental impact by overhauling its machinery.
Another project undergoing modernization is 72 MW Harjavalta on the Kokemaenjoki River, with project operator Lansi-Suomen Voima Oy awarding a contract to Alstom to provide retrofit and upgrade services.
The deal, valued at more than US$13.6 million, will see Alstom refurbish and upgrade two generators, rotors, generator shafts and bearings, in addition to supplying new stators and excitation and cooling systems. Alstom will also supply a new 25 MVA generator to be manufactured at its plant in Bilbao, Spain.
Upgrades to the plant’s two existing generators will increase their output from 46 MVA to 53 MVA, Alstom said, with the work to be conducted between 2016 and 2017.