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China market awakens
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NEWS
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International Desk
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erswithinterestsin3~7MWof capacity in ten operating power plants in the U.S. and South America.
Ch4S Moves into Manila
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Japan kW Use Far off
MS Energy Corp. announced last month that its independent power unit, CMS Generation Co., has acquired a 50% interest in Luzon Power Associates, which will develop a 400 MW oil-fueled power plant on the island of Luzon in the Philippines at an estimated cost of $500 million. Power from the plant will be sold to the Manila Electric Co. under a power contract already signed by the utility and Luzon Power. The Philippine Department of Energy has green-lighted the project and all other necessary government approvals are on schedule. Manila Plectric, the largest private electric utility in the Philippines, supplies power to the country’s capital and surlounding provinces. CMS Generation, the inde pendent power affiliate of CMS Energy, is one of the nation’s top five independent power produc-
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apan’s summer consumption of electricity,after setting record highs each year for several years in a row, was the lowest in 11 years in 1993 due to unseasonably cool weather, industry sources said last Saturday Electricity consumption at nine electric power companies, excluding Okinawa Electric Power Co., peaked at 14358 million kW on August 25, down 13% from the highest consumption initially projected, the sources said. The nine companies are: Tokyo, Hokkaido, Tohoku, Chubu, Kansai, Shilcoku, Hokuriku, Kyushu and Chugoku Electric Power Companies. Usage was also 17% below combined supply capacity of the nine companies, they added. Thesharpfalloffinsaleswillmsultinadeclineinthisyear’smvenues at the nine companies, -
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which have already been hit by declining demand from large industrial users due to the sluggish economy Last year, electricity consumption peaked on September 4 at 152.86 million kilowatts, a level that is unlikely to be hit this year, judging from weather forecasts, they said.
China Market Awakens e immensely populous Chi-
T”nesemarketmaysoonbethe
hot new target for U.S. utilities and equipment vendors in their dash for global diversification, believes KX Lau, former vice presiden-technical for the American Nuclear Energy Council in Washington Lau has just set up a consulting firm to help American electricity industry clients deal with theChinese. Amarket in China undoubtedly exists. “It’s probably the largest foreign market for the next ten years/ Lau says. ‘They have to build somewhere between 10,OlXl and 15,000 megawatts each year. Most of that will be domestic coal plants, but about 20% of the total
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will be fossil plants built and operated by foreign suppliers. People who want to go to Thailand or Indonesia now will find that it’s already too late. All the good deals there have been picked off / Lau has one client, whom he will not name, that he says is talking to commercial and investment banks about other projects. “Everyone here wants to invest in China,,”says Lau, ‘but it’s a matter of finding good projects. The Chinese am welcoming IPPs either to build plants or joint venture with themselves.” Can you get your money out in hard currency? “If you can get govern ment guarantees, the foreign exchange wiIl be there/ Lau says. “It all depends on where you build your power plant. Each pmvi&al government is responsible for its own foreign exchange.N This could all be vapor-plant for U.S. utilities and suppliers. “Nobodyhasactuallynaikddown any big projects,” Lau admits. “About 80% of projects don’t materializ. It’s a different culture. The Chinese negotiate much more slowly The first thing the Americans want to do when they sit down is to talk about the bottom line. The Chinese wiIl discuss the bottom line at the very last moment of the negotiations.” Nau
Nukes in Japan
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apan’s Chubu Electric Power Co. planned to commence commercial operation of its new Hamaoka-4 nuclear power plant Friday the company said today
Augu@eptember 1993
NEWS
IN
F
The unit, located on the Pacific Coast in central Japan, has a boiling water reactor with a generation capacity of 1,140 MW Chubu Electric has been running the Hamaoka-4 unit on a test basis since early this year, and is awaiting approval from the Ministry of International Trade and Industry (MIT’I)before declaring an official start-up. The opening of thefourthunitwillboostthetotal generation capacity of the Hamaoka nuclear power station
to 3620 Mw, the spokesman said. Hamaoka-4 will be the third and the last new nuclear power plant tobeopenedinJapaninthecurrent fiscal year started April 1, following Hokuriku Electric Power Co.‘s 540 MW Shika-1 plant and Tokyo Electric Power Co.% 1,100 MW Kashiwazaki-Kariwa-3 unit. Tokyo Electric’s new plant has a boiling water reactor and cost 325 billion yen (or a little over $3 billion) to construct. The unit boosts the number of Tokyo Electric’s nuclear plants to 14, with a combined capacity of 13,500 MW, bosting the nuclear sham of its generation mix to 27%.
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c u s Roger Gale, president of Washington International Energy Group and a cons&ant to several Japanese utilities, said the high rates of growth experienced by Japanese utilities (7% per year or more, until this cool summer) have prompted construction of “seven or eight new reactors” on which work wiIl soon begin But at the same time, Japan’s electric utilities are experiencing rate pressures from industrial iinns who, like their U.S. counterparts, are trying to hold down costs. Gale said there would be a rate rollback of about 3.7% by most of Japan’s utilities, though he did not know how the mduction would be allocated among customer classes. The rollback comes courtesy of the international currency exchange rate, which continues to run in Japan’s favor. Much of Japan’s generation is oil- and liquified natural gas-fired and the cost of imported fuel has faIlen sharply with the rising yen. “Both Japanese power costs and quality of service tend to be higher than our own,” said Gale.
Shorts and Transients Climate Change Group Disparages EC Role
D
wing
discussions over the past few years about how to reduce emissions of greenhouse gases, elitist Eurocrats have enjoyed bashing the U.S. for foot dragging. Yet, by measures out-
7
T
H
NEWS
E
International Desk
F
erswithinterestsin3~7MWof capacity in ten operating power plants in the U.S. and South America.
Ch4S Moves into Manila
C
Japan kW Use Far off
MS Energy Corp. announced last month that its independent power unit, CMS Generation Co., has acquired a 50% interest in Luzon Power Associates, which will develop a 400 MW oil-fueled power plant on the island of Luzon in the Philippines at an estimated cost of $500 million. Power from the plant will be sold to the Manila Electric Co. under a power contract already signed by the utility and Luzon Power. The Philippine Department of Energy has green-lighted the project and all other necessary government approvals are on schedule. Manila Plectric, the largest private electric utility in the Philippines, supplies power to the country’s capital and surlounding provinces. CMS Generation, the inde pendent power affiliate of CMS Energy, is one of the nation’s top five independent power produc-
J
apan’s summer consumption of electricity,after setting record highs each year for several years in a row, was the lowest in 11 years in 1993 due to unseasonably cool weather, industry sources said last Saturday Electricity consumption at nine electric power companies, excluding Okinawa Electric Power Co., peaked at 14358 million kW on August 25, down 13% from the highest consumption initially projected, the sources said. The nine companies are: Tokyo, Hokkaido, Tohoku, Chubu, Kansai, Shilcoku, Hokuriku, Kyushu and Chugoku Electric Power Companies. Usage was also 17% below combined supply capacity of the nine companies, they added. Thesharpfalloffinsaleswillmsultinadeclineinthisyear’smvenues at the nine companies, -
6
IN
0
c
l.I
s
which have already been hit by declining demand from large industrial users due to the sluggish economy Last year, electricity consumption peaked on September 4 at 152.86 million kilowatts, a level that is unlikely to be hit this year, judging from weather forecasts, they said.
China Market Awakens e immensely populous Chi-
T”nesemarketmaysoonbethe
hot new target for U.S. utilities and equipment vendors in their dash for global diversification, believes KX Lau, former vice presiden-technical for the American Nuclear Energy Council in Washington Lau has just set up a consulting firm to help American electricity industry clients deal with theChinese. Amarket in China undoubtedly exists. “It’s probably the largest foreign market for the next ten years/ Lau says. ‘They have to build somewhere between 10,OlXl and 15,000 megawatts each year. Most of that will be domestic coal plants, but about 20% of the total
T
H
E
will be fossil plants built and operated by foreign suppliers. People who want to go to Thailand or Indonesia now will find that it’s already too late. All the good deals there have been picked off / Lau has one client, whom he will not name, that he says is talking to commercial and investment banks about other projects. “Everyone here wants to invest in China,,”says Lau, ‘but it’s a matter of finding good projects. The Chinese am welcoming IPPs either to build plants or joint venture with themselves.” Can you get your money out in hard currency? “If you can get govern ment guarantees, the foreign exchange wiIl be there/ Lau says. “It all depends on where you build your power plant. Each pmvi&al government is responsible for its own foreign exchange.N This could all be vapor-plant for U.S. utilities and suppliers. “Nobodyhasactuallynaikddown any big projects,” Lau admits. “About 80% of projects don’t materializ. It’s a different culture. The Chinese negotiate much more slowly The first thing the Americans want to do when they sit down is to talk about the bottom line. The Chinese wiIl discuss the bottom line at the very last moment of the negotiations.” Nau
Nukes in Japan
J
apan’s Chubu Electric Power Co. planned to commence commercial operation of its new Hamaoka-4 nuclear power plant Friday the company said today
Augu@eptember 1993
NEWS
IN
F
The unit, located on the Pacific Coast in central Japan, has a boiling water reactor with a generation capacity of 1,140 MW Chubu Electric has been running the Hamaoka-4 unit on a test basis since early this year, and is awaiting approval from the Ministry of International Trade and Industry (MIT’I)before declaring an official start-up. The opening of thefourthunitwillboostthetotal generation capacity of the Hamaoka nuclear power station
to 3620 Mw, the spokesman said. Hamaoka-4 will be the third and the last new nuclear power plant tobeopenedinJapaninthecurrent fiscal year started April 1, following Hokuriku Electric Power Co.‘s 540 MW Shika-1 plant and Tokyo Electric Power Co.% 1,100 MW Kashiwazaki-Kariwa-3 unit. Tokyo Electric’s new plant has a boiling water reactor and cost 325 billion yen (or a little over $3 billion) to construct. The unit boosts the number of Tokyo Electric’s nuclear plants to 14, with a combined capacity of 13,500 MW, bosting the nuclear sham of its generation mix to 27%.
0
c u s Roger Gale, president of Washington International Energy Group and a cons&ant to several Japanese utilities, said the high rates of growth experienced by Japanese utilities (7% per year or more, until this cool summer) have prompted construction of “seven or eight new reactors” on which work wiIl soon begin But at the same time, Japan’s electric utilities are experiencing rate pressures from industrial iinns who, like their U.S. counterparts, are trying to hold down costs. Gale said there would be a rate rollback of about 3.7% by most of Japan’s utilities, though he did not know how the mduction would be allocated among customer classes. The rollback comes courtesy of the international currency exchange rate, which continues to run in Japan’s favor. Much of Japan’s generation is oil- and liquified natural gas-fired and the cost of imported fuel has faIlen sharply with the rising yen. “Both Japanese power costs and quality of service tend to be higher than our own,” said Gale.
Shorts and Transients Climate Change Group Disparages EC Role
D
wing
discussions over the past few years about how to reduce emissions of greenhouse gases, elitist Eurocrats have enjoyed bashing the U.S. for foot dragging. Yet, by measures out-
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