Energy Business News

Power stations to be sold
Plans are afoot to sell three power stations to foreign investors to ease debt burdens on the electricity sector, reports Safeya Mounir The Ministry of Electricity has recently received offers from a company owned by Blackstone, an alternative investment firm, and Malaysian Edra Power to buy three power stations co-established by Siemens AG. If one of the offers is accepted, Egypt will buy electricity from the winning bidder according to a power-purchasing agreement. Selling the three power stations, inaugurated a year ago and located in Beni Sweif, Borollos, and the New Administrative Capital, will ease the financial burden on the electricity sector, which is heavy with “debts due to be paid in installments from the building costs,” said Mohamed Salah Al-Sobki, former head of the Renewable Energy Authority. In September, Egypt signed a $352 million contract with Siemens AG and Siemens Technologie in Germany to manage the three plants. Payments for the eight-year deal to operate, maintain and manage the three plants were scheduled to start after four years. The cost was agreed to be split into a LE2.6 billion local currency tranche and a 176 billion euros foreign tranche, the equivalent of LE3.7 billion. In 2017, the Ministry of Electricity planned for the three plants to be sold on the stock exchange as part of the government’s initial public offerings (IPOs) programme. The Egyptian Electricity Holding Company announced a tender for the management and maintenance of the three stations, which involved 10 companies including Siemens, an Orascom-ADERA Energy consortium, an Al-Sewidi-EDF consortium, Germany’s STEAG, Hassan Allam, a Triangle-GD France consortium, Korea’s Doosan and Japan’s Mitsubishi. The plants cost six billion euros ($6.7 billion) to build and were mainly financed by a consortium of lenders led by Deutsche Bank, HSBC Holdings and KfW-IPEX Bank. According to Bloomberg, Siemens Egypt, which operates the three plants under an eight-year contract, said that “power-purchase agreements between utilities and private power companies or investors are common worldwide. Chief executive officer Emad Ghaly said his firm is committed to operating and maintaining them until 2024.” Al-Sobki does not believe the sale of the power plants falls within the frame of privatisation, however. “This is a competitive market. Whether the plants are state-owned or belong to a foreign investor, competition is taking place in a free market,” he said, adding that privatisation occurred chiefly when an establishment operating in the framework of subsidies was sold. That was not the case here, he said, since the electricity sector was already open to all. The Siemens plants produce 20 per cent of Egypt’s power-generation capacity, he said, adding that the maximum power consumption in Egypt was less than 32 gigawatts (GW), whereas total power generation stood at 54 GW. The three plants of Beni Sweif, Borollos and the New Administrative Capital have a total capacity of 14.4 GW. Al-Sobki said that opportunities were thus abundant to export electricity and the chances of the sector’s growth were high. According to Hafez Al-Salmawi, former head of the Egyptian Electric Utility and Consumer Protection and Regulatory Authority (EgyptERA) and professor of power engineering at Zagazig University, the presence of the private sector as a player in the electricity sector guarantees better operation, management and maintenance. Usually, private electricity plants are better operated than public-sector ones, he added. He said that power plants could “sell like hot cakes” on the stock exchange due to the sector’s reputation for honouring its commitments and paying its dues to foreign lenders. Selling the plants would decrease the debts owed by the electricity sector, while selling parts of them according to the power-purchasing agreement would guarantee returns on payment, he said. Egypt’s 2019-20 budget revealed that debt guaranteed by the Ministry of Finance represented 20.4 per cent of GDP by the end of 2018. About a quarter of that was owed by electricity companies, according to Bloomberg. To guarantee appropriate offers and purchase prices, there should be extensive preparations before the sell-off, Al-Salmawi said, stressing that good promotion would yield the best offers. Economic analysts believe that selling the plants will help lower Egypt’s foreign debt. Mohamed Abu Basha, a macroeconomic analyst at EFG Hermes, an investment bank, said that when the plants are sold their debts will be transferred to the buying companies and not the government. Selling the power plants to foreign investors is expected to yield $6.5 billion, said Hani Tawfik, former head of the Egyptian and Arab Direct Investment Association. The move would lower the country’s foreign debts and allow the government to give up its managerial role and focus on planning and consumer protection, he said.   Source:
Govt increases oil, gas bidding round to three times a year
Delays in bidding rounds notwithstanding, the government has increased the expression of interest (EoI) submission cycle for oil and gas acreage to three times a year from two times earlier, the Directorate General of Hydrocarbons (DGH) said.  India had in July 2017, allowed companies to carve out blocks of their choice with a view to bring about 2.8 million sq km of unexplored area in the country under exploration.  Under this policy, called open acreage licensing policy or OALP, companies are allowed to put in an EoI for prospecting of oil and gas in any area that is presently not under any production or exploration licence.  The EoIs can be put in at any time of the year and were accumulated twice annually. But now, this cycle has been increased to three.  "In view of recent policy reforms and changes aligned to promote 'Ease of Doing Business', the EoI submission cycle is increased from two, to three times in a year," the DGH said in a notification.  Previously, the two window of accumulating EoIs ended on May 15 and November 15 every year. EoIs accumulated till May 15 were supposed to be put on auction by June 30 and those in the second window by December 31.    Source:
Enel Green Power Spain starts wind power plant in Malaga
Endesa, through its renewable energy subsidiary Enel Green Power España (EGPE), has begun construction of the Los Arcos wind energy plant, with 34.6 megawatts (MW) of power, in Malaga, specifically among the municipalities of Almargen, Teba and Campillos. The construction of this wind farm will involve an investment of 35.5 million euros and will be operational in the last quarter of the year. “Endesa is making a very important investment effort in renewable energies to lead the energy transition,” said Endesa CEO José Bogas. “At the end of the year, around 900 MW of renewable energy that the company won in the 2017 auctions will be operational, demonstrating the company’s commitment for Spain to achieve its green energy objectives.” The Los Arcos wind farm will be operational at the end of 2019, and, when it is operational, it will have the capacity to generate more than 100 GWh per year, which will prevent the annual emission into the atmosphere of approximately 69,000 tons of CO2. It will be equipped with 10 wind turbines of 3.5 MW of unit power. Enel Green Power Spain has 12 wind farms in Andalusia: 5 in the province of Cádiz (four in Tarifa and one in Vejer), another 5 in Malaga (two in Campillos, one between Campillos and Teba, one in Almargen and one in Sierra of Yeguas), one in Enix (Almería) and one in Padul (Granada). The Andalusian park is part of the 540 MW of wind power that EGPE was awarded in the renewable energy auctions organized by the Government in May 2017. In addition to Andalusia, the wind farms will be located in Aragón, Castilla y León, Castilla La Mancha and Galicia. When they become operational, the new facilities will generate a total of about 1,750 GWh per year. For the construction of these parks, EGPE employs various innovative tools and techniques, such as drones for surveying, intelligent tracking of turbine components, advanced digital platforms and software solutions to remotely monitor and support activities and commissioning. in progress of the plant. These solutions allow faster, more accurate and reliable data collection in the work activities, which increases the overall quality of the construction and facilitates communication between the equipment that is inside and outside the work area. The construction is based on the “Sustainable Construction Site” model of Enel Green Power, including the installation of photovoltaic solar panels at each site to cover part of its energy needs. In addition, water saving measures will be carried out by installing water tanks and rainwater collection systems; Once the construction works are finished, both the photovoltaic panels and the water saving equipment will be donated to the municipalities where the projects are located for public use. During construction, the plant will employ more than 100 people. To promote the creation of these jobs among local people in the environment, EGPE will carry out training activities on operation and maintenance of wind and photovoltaic plants from September. In addition, EGPE will offer information to citizens about the social actions that accompany the construction of plants, and will make available contact information for possible consultations. In auctions organized by the Government in 2017, EGPE was also awarded 339 MW of solar energy in Extremadura and Murcia. The construction of wind (540 MW) and solar (339 MW) will involve an investment of more than 800 million euros until 2020. This capacity of 879 MW will increase Endesa’s renewable energy park by 52.4%. Endesa currently manages more than 6,553 MW of renewable capacity in Spain. Of this figure, 4,710 MW are of conventional hydraulic generation. The rest, more than 1,843 MW, are managed through EGPE, and come from wind power (1,750 MW), mini hydro (54 MW) and other renewable energy sources (14 MW). Enel Green Power, the global renewable energy business line of the Enel Group, to which Endesa belongs, is dedicated to the development and operation of renewables worldwide, with a presence in Europe, America, Asia, Africa and Oceania. Enel Green Power is a global leader in the green energy sector with a managed capacity of about 43 GW in a generation combination that includes wind, solar, geothermal and hydroelectric, and is at the forefront of the integration of innovative technologies in power plants renewable energy.   Source:
Securing the future of Philippine energy
MANILA, Philippines — With the Philippines’ growing population and continued industrialization, the Department of Energy has forecasted the country’s demand for electricity to reach over 40,000 megawatts (MW) in 2040, exceeding the 19,536 MW existing dependable capacity being supplied by the country’s power plants. To address this, the government proposed the Philippine Energy Plan 2017-2040, which aims to increase the country’s renewable energy installed capacity to at least 20 000 MW. Around 16,949 MW of potential renewable energy capacities are expected within the horizon, with hydro contributing to about 10,792 MW, followed by solar (4,081 MW), wind (1039 MW), geothermal (684 MW), biomass (326 MW), and ocean (26 MW). However, since the building of hydro and geothermal facilities usually takes three to five years, many are more excited about the prospects of solar facilities, which are easier to put up and scale and are relatively unobtrusive. This landscape, together with the government’s initiatives, presents the rise of new opportunities in the energy sector. To showcase possibilities in the industry, the Future Energy Show, co-located with the Asian Power & Energy Summit, will gather the energy sector ecosystem in the region to discuss industry strategies, trends, and key innovation to help local energy stakeholders replicate industry best practices. Happening on May 20 and 21 at the SMX Convention Center in Pasay City, the Philippines’ largest energy event will gather more than 180 of the world’s leading energy providers. An estimated 80% of exhibitors will come from the solar energy sector, in response to the unique opportunities and potential in this space. For guests who wanted to learn from and engage with 60 of Asia’s power leaders, running alongside the Future of Energy Show is the first ASEAN Power & Energy Summit. It is an exclusive event that examines how the digital revolution is changing the way electricity is generated, transmitted and distributed, and how changing market and regulatory landscapes are shaping the future of power projects in the region. Expected to attend the event are technology representatives, equipment manufacturers, turnkey suppliers, project developers, large energy users, property owners, and real estate developers. The Future Energy Show Philippines 2019 is organized in partnership with host utility Meralco, sponsored by Trina Solar and Solar Philippines (Gold); 10 Fields Factory, Conergy, and Star8 Green (Silver); and ABB, Sterling and Wilson, Schneider Electric, Exist, First Gen Energy Solutions, BTC Power, IGS, and Noja Power (Bronze).   Source:
Renewable energy to grow 11.2% a year
Power generation capacity in the Philippines based on renewable sources other than hydro is expected to see a double-digit annual growth over the next 12 years, due to the continued growth in the economy and the population. The London-based firm said investments in renewables were being driven by rising electricity consumption, which is expected at 6.5 percent CAGR to reach 173,000 gigawatt-hours in 2030 from 81,7000 gWh in 2018. “Growing population is driving electricity consumption in the Philippines,” said Harshavardhan Reddy Nagatham, power industry analyst at GlobalData. “As a result, new investment in capacity addition is urgently needed.” Nagatham said investments were being given a boost by the government’s drive to reduce its dependence on imported fossil fuel as well as to promote the development of renewable power capacity, particularly solar through the net metering scheme. Net metering gives incentive to owners of rooftop solar installations with credit for power generated in excess of what they need, which is then delivered to the grid and which they can use to offset future electricity consumption. “Net metering currently has low adoption in the Philippines, but can play a major role in increasing renewable power capacity in the country and in helping with the supply security,” Nagatham said. GlobalData estimated that the share of solar and onshore wind power in the country’s power-generation mix would increase to 13 percent and 4.6 percent of total installed capacity in 2030, respectively, from 4.3 percent and 1.8 percent in 2018.   Source: