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combined cycles

DF has signed two contracts in Brazil with Bolognesi Energia to build the gas fired power plants of Rio Grande and Novo Tempo. The plants won the A-5 auction in 2014 held by the Agencia Nacional de Energía Eléctrica or National Electrical Energy Agency (ANEEL) and will be jointly built by Duro Felguera S.A., the subsidiary Duro Felguera do Brasil and General Electric International Inc.

The turnkey contract includes the engineering, procurement, construction, commissioning and performance testing for the gas fired power plants. The capacity of each plant will be approximately 1,500 MW and the latest General Electric Class H gas turbines will be used.

Over 20,000 jobs will be created in the construction of the plants, while investment will be c. 6,500 million Brazilian Reales. The amount corresponding to DF for each project is c. 400 million Euros, which means a total contract price of c. 800 million Euros.

Each plant will consume 5.5 million m3 of gas per day, provided by the Liquefied Natural Gas (LNG) regasification terminals with a capacity of 14 million m3 per day, also to be built by Bolognesi Energia. The supply of LNG will take place under a 25-year contract with a major international producer. The long-term debt for the projects will be with US Exim Bank and the BNDES. Itaú BBA and the Banco de Brasil have been contracted as financial advisors and project structuring agents.

With the signing of these two contracts, DF resumes its activity in Brazil in the field of energy. Two years ago the company finished the Parnaiba project in the country, consisting of five open cycle generation groups making up a total of 850 MW, and which was built in the state of Maranhao.

The company is currently executing five power plants in Argentina, Peru, Venezuela, the United Kingdom and Algeria, which surpass 4,000 MW in power, to which this new project can now be added together with the Aconcagua project, a cogeneration plant which will be built in Chile for ENAP. The contract, amounting to 106 million Euros, was signed this same month.

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Termocentro combined cycle plant. Photo courtesy of Duro Felguera

It is not a good time for combined cycles in Spain; the Spanish fleet of combined cycle plants, with an installed capacity of 27,206 MW is, according to official data, underutilized.In 2013 the contribution of combined cycles to coverage of mainland demand was under 10%, according to data published by REE. According to the 2013 Progress Report on the Spanish electricity system, in this same period combined cycle production fell dramatically from the previous year, down 31.8% (including both mainland and island cycles).

This same document indicates a decrease in the coverage of demand in 2012, when the figure stood at 14.1%, however if we go back a few years ago, the figures speak for themselves: in 2008, combined cycle plants produced 32% of the electricity consumed in Spain.

Today the space occupied by thermal generation combined cycle hardly reaches an average of 20% capacity; in 2008 cycles ran at over 55%.

Article published in: FuturENERGY March 2014

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