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News on the global hydroelectric industry from September-October 2015

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NEPAL

Contract awarded for first large pumped storage project

Lahmeyer International GmbH and sub-consultant Manitoba Hydro International have been awarded a contract by Tanahu Hydropower Ltd. to provide services associated with development of the 140 MW Tanahu pumped storage project in Nepal.

The deal calls for Lahmeyer and Manitoba Hydro to review tenders, design and documents within its first year, followed by the award of construction contracts. Lahmeyer will provide building and commissioning supervision during Tanahu’s six-year construction period, followed by operation assistance for the ensuing five years.

The 140 MW Tanahu pumped-storage project is being built in Nepal.
The 140 MW Tanahu pumped-storage project is being built in Nepal.

Tanahu will be located on the Seti River about 100 km from Kathmandu and will be Nepal’s first major pumped storage plant, according to Lahmeyer. The project’s upper reservoir will be impounded by a 140 m-tall gravity dam.

Tanahu Hydropower is a special project company that was founded by the Nepal Electricity Authority.

UGANDA

Agreement signed to develop 44.7 MW Muzizi project

KFW Development Bank, the French Development Agency and the government of Uganda signed an US$95 million agreement in mid-August to construct the 44.7 MW Muzizi project on the Muzizi River.

Muzizi is a public project financed under the Mutual Reliance Initiative. Groundbreaking on the project is scheduled for August, 2016.

Uganda Electricity Generation Co. officials said design development is beginning with engineering studies and the government will begin preparing tender documents after reviewing feasibility studies already on file.

Earlier this year, Information Minister Jim Muhwezi said the government would borrow US$94.3 million to fund the project.

AUSTRALIA

Genex Power exploring feasibility of 330 MW Kidston pumped storage

Genex Power has appointed Entura to provide a feasibility study for the 330 MW Kidston pumped storage plant, proposed for construction in North Queensland, Australia. The project would be built at the site of the Kidston Gold Mine, which includes two adjacent pits that would act as the upper and lower reservoirs.

Entura, a subsidiary of Hydro Tasmania, will also oversee subcontracted geotechnical and bathymetric surveys and manage environmental and planning approvals. The feasibility phase will see Entura partnering with Hydrochina, per a memorandum of understanding signed in November, 2014.

If built, Kidston would be Australia’s third pumped storage project.

In other news in the country, Pacific Hydro could be sold, with interest shown from a variety of sources, including AES Corp. and Statkraft AS. The company owns 19 generating facilities in Australia, Chile and Brazil.

Pacific Hydro is owned by IFM Australia Infrastructure Fund, which is managed by IFM Investors.

GUYANA

Plans nixed for 165 MW Amaila Falls

The Guyana government has abandoned plans to develop the 165 MW Amaila Falls project, citing numerous delays and potential cost overruns. The project, Guyana’s first major hydro facility, would have been located about 250 km southwest of the capital city on the Kuribrong River.

Preliminary estimates in 2008 put the price at US$400 million to $500 million.

The government will now begin planning feasibility studies for a new large hydro project in the country’s northwestern region. In addition, smaller regionalized plants will also likely be a consideration, says Finance Minister Winston Jordan.

USA

Update on the Clean Power Plan

Sixteen U.S. states have threatened to file a suit against the Environmental Protection Agency’s Clean Power Plan, unveiled by President Barack Obama and the Environmental Protection Agency in early August, 2015, to reduce the country’s carbon emissions by more than 30% from 2005 levels by 2030.

The Clean Power Plan sets emissions reduction goals for fossil fuel generating plants and requires states to establish plans to reduce their emissions by September, 2016. States will then have until 2022 to comply.

EPA said the plan is a necessary response to alarming trends regarding global climate change, with 14 of the 15 warmest years on record having occurred since 2000. Obama said he hopes to make the USA, which trails only China in CO2 emitted per year at more than 5 million kilotonnes, a trend-setter for other countries.

“I’m convinced no challenge provides a greater threat to the future of the planet,” the President said. “There is such a thing as being too late.”

Exactly how much emphasis the Clean Power Plan puts on individual forms of energy generation is ambiguous, although the 1,560 page document seems to favor wind and solar. Language included in the plan does nonetheless define conventional hydroelectric, wave and tidal power as “renewable energy resources.”

However, the Emergency Petition for Extraordinary Writ, signed by the 16 states, was submitted to the EPA August 13 after a previous grievance requesting an “immediate stay” on the program was submitted to the EPA August 4, just days after the plan was unveiled.

Actual filing of the suit against the EPA will not come until the plan is published in the Federal Register.

INDIA

Multiple hydro projects moving forward

Significant hydro activity is taking place in India, just some of which is reported here.

Sutlej Jal Vidyut Nigam revised the design of its US$1.2 billion Luhri project, at the request of the government of Himachal Pradesh. The original design included a tunnel 38 km long and a capacity of 775 MW. However, the government wants the project to be executed in multiple stages instead of the single stage with one long tunnel.

Building in three stages would change capacity to 592 MW and avoid issues with regard to tunneling that include destabilized slopes, cracks and damage to houses, and drying up of natural water springs.

Second, the Himachal Pradesh state cabinet on August 5 decided to re-award a contract for the 960 MW Jhangi-Thopan-Powari project to Reliance Infrastructure (RInfra).

In 2006, the government awarded the contract through a bid process to Brakel Corp. Brakel invested about US$36 million to begin developing the site, but the Himachal state cabinet cancelled the allocation based on court rulings that Brakel misrepresented project details in its in pre-bid documents.

RInfra, second place in 2006 for the bid, filed suit to stop a new bidding process. The August 5 decision to award RInfra the project makes the court filing moot.

Third, India’s Power Ministry recommends National Hydroelectric Power Corp. (NHPC) purchase private equity shares to ensure the US$1.48 billion 1,200 MW Teesta Stage-III project on the Teesta River in the northern district of Sikkim is completed.

Teesta-III includes a 60 m-high concrete-faced rockfill dam, a 13.33 km-long headrace tunnel, 980 m-long tailrace tunnel and an underground powerhouse for its six 200 MW turbine-generators operating under a head of 800 m. Andritz VA Tech Hydro supplied Teesta Urja the complete electromechanical package for six vertical Pelton units, which were originally scheduled to go on line by August, 2011. Unit No. 1’s scheduled commission date is now September, 2015.

At issue are time and cost overruns that prevent the project from meeting scheduled commission dates. In recommending NHPC purchase private equity shares, the government’s move is intended to encourage continued foreign investment in India’s hydroelectric initiatives.

Organizers said, “The project on completion would supply 12% free power to the state government for the first 15 years and 15% free thereafter. Full ownership would be transferred to the government after 35 years.”

CENTRAL ASIA

EBRD hoping to unlock hydroelectric power with transmission line financing

The European Bank for Reconstruction and Development has announced a US$110 million loan to help finance a transmission line that will “help unlock the untapped hydropower potential of Central Asia.”

Called the Central Asia South Asia Electricity Transmission and Trade, or CASA-1000, the line could ultimately wind from Datka, Kyrgyzstan, to Peshawar, Pakistan and allow Tajikistan to sell surplus electricity in the summer to Afghanistan and Pakistan.

EBRD’s financing is intended to help Tajik utility Barki Tojik construct a power converter station and related infrastructure in Tajikistan. Terms of EBRD’s funding dictate that Barki Tojik must undertake a series of reforms, including third-party access rules for the cross-border line and establishment of an independent energy regulator.

“We are proud to support this program that will benefit the whole of Tajikistan,” bank president Suma Chakrabarti said. “Importantly, it enables a strategic cross-border project, which has the potential to become a ‘game-changer’ in this troubled region.”

The transmission line is also receiving funding from the World Bank and European Investment Bank.

ITALY

ERG Power Generation acquires 527 MW from E.ON

German utility E.ON has agreed to sell its 527 MW Terni hydroelectric complex to Genoa-based ERG Power Generation S.p.A.

The Terni complex includes 16 individual hydropower plants; a pumping station; seven large dams; the Salto, Turano and Corbara reservoirs; 22 weirs; and 155 km of channels and tunnels. The assets are located in Italy’s Umbria, Lazio and Marche regions, drawing waters from the Nera, Velino and Tiber rivers.

Financial details were not disclosed by E.ON, although the deal is still subject to approval by the Italian Antitrust Authority and the completion of mandatory notifications and consultations procedures with relevant trade unions. The deal is expected to close before the end of the year.

SUDAN

Plan to add 500 MW of hydro by 2020

Sudan has approved the Ministry of Water Resources and Electricity for Enhancing Electricity Power Service plan, a document detailing how to increase hydroelectric generation in the country from 1,500 MW to 2,000 MW by 2020. The document also lists proposals to upgrade thermal power energy generation from 900 MW to 3,555 MW, adding a total of 3,155 MW of capacity in five years.

The technical committee of the economic development sector at Sudan’s Council of Ministers approved the framework document the final week of July, 2015.

Toward its goal, Sudan would like to complete dam construction at the 320 MW Upper Atbara and Setit project. The project includes Rumela Dam on Upper Atbarah River and Burdana Dam on Setit River.

The US$1.9 billion twin-dam project is being constructed 12 miles upstream from the Atbarah and Setit rivers junction and about 50 miles south of the 10 MW Khashm el-Girba project. Construction began in 2011 and both dams are expected to be complete by March, 2016.

NIGERIA

AHC to supply US$78 million in equipment to 700 MW Zungeru

Alstom Hydro China (AHC) was awarded a contract worth about US$78 million by China National Electric Engineering Co. Ltd. to provide electromechanical equipment and technical services for the US$1.3 billion 700 MW Zungeru hydroelectric project on the middle and upper reaches of the Kaduna River near Zungeru, Niger.

According to the contract, AHC will provide four 175 MW Francis turbine-generator sets and related equipment for this project. AHC is responsible for the equipment design, manufacture, installation supervision, commission, tests and additional site services.

The 700 MW Zungeru project in Nigeria is moving forward with the award of a contract for electromechanical equipment.
The 700 MW Zungeru project in Nigeria is moving forward with the award of a contract for electromechanical equipment.

Zungeru is Nigeria’s largest hydropower plant under construction. The project will provide power generation, flood protection and water for irrigation. It includes a roller-compacted compacted dam (90 m high and 1,090 m long), an intake tower and diversion tunnel, underground powerhouse, power transmission lines and access roads.

Officials hope the Zungeru plant will help alleviate the country’s massive energy deficit, where blackouts are a near daily occurrence and much of the population relies on diesel generators.

Zungeru is one of several hydro projects that are part of Nigeria’s Renewable Energy Master Plan. REMP seeks to increase the supply of renewable electricity from 13% of total electricity generation in 2015 to 23% in 2025 and 36% by 2030, according to the Nigerian government.

BHUTAN

Cost estimates for Punatsangchhu-1 project reach US$1.74 billion

India’s Union Cabinet has approved cost revisions for its intergovernmental agreement with the Royal Government of Bhutan to implement the 1,200 MW Punatsangchhu-1 project on the Punatsangchhu River.

In 2006, estimates for the project amounted to US$554 million, but information released by the Union Cabinet on July 22 now projects cost at US$1.74 billion.

According to the Asian Investment Bank, about 75% of all electricity generated in Bhutan is exported to India and revenue from the exports constitutes 25% of its gross domestic product. Another 25% contribution to GDP comes in the form of hydropower construction.

Punatsangchhu-I is located in the Southern Himalayas, about 80 km east of Bhutan’s capital. The project’s concrete dam is 130 m high by 239 m long. The facility includes an underground powerhouse that will contain six 200 MW turbines when completed in 2019.

India is funding the project with a 40% grant and 60% loan. Cost increases for this hydropower project resulted from a number of issues, including serious geological problems at the site. In July, 2013, the right bank of the dam site slid by more than 5 m.

BRAZIL

Work advances at Belo Monte, other sites

Brazil’s Norte Energia has awarded a pair of contracts for the supply of mechanical equipment to Brazil’s massive 11,200 MW Belo Monte complex.

The first amends a contract signed by the ELM Consortium - which includes Alstom, Andritz and Voith - and covers the supply of a turbine and two generators. Delivery of the components is scheduled for 2018. The second contract, valued at US$15 million, was awarded to an Alstom-led consortium with Bardella and includes the supply of 18 provisional stoplogs for Belo Monte’s draft tube.

In addition, the State Grid Corp. of China has been awarded a contract to build and operate a second transmission line for Belo Monte. The US$2.2 billion line will be an 800 kV, 2,550 km-long link that will run from Belo Monte in northern Brazil to Rio de Janeiro in the southeast. The deal also includes the construction of two new substations.

Norte Energia has awarded two contracts to supply equipment for the massive 11,200 MW Belo Monte plant.
Norte Energia has awarded two contracts to supply equipment for the massive 11,200 MW Belo Monte plant.

The first transmission line is expected to be complete in December, 2017, while the most recent is scheduled for completion in December, 2019.

The $26 billion hydro facility will be located on the Xingu River and has a completion deadline of 2018, although developer Norte Energia filed a request for a construction extension this past June.

This work advances against a backdrop of an increase in water levels in the country’s hydroelectric power reservoirs in July, allowing the government to shut down 21 backup thermoelectric plants. Reservior levels rose from 17% of capacity in January to 27% in July.

In other news, Copel’s earnings statement released in mid-August indicates the utility intends to spend about US$58 million on construction of the 300 MW Colider project on the Teles Pires River and US$38 million on 350 MW Baixo Iguacu on the Iguacu River.

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