martes, enero 31, 2006

DR1: Charcoal-fired plant tender

Three companies are bidding for the government contract to build two charcoal-fired power plants in the Dominican Republic. Companies that have made offers are the Sichouan Machinery Equipment, HN Energy and Emirates Power DR. The 600-megawatt power plants would be installed in Monte Cristi and Azua. They would have a joint cost of about US$1.2 billion, according to a news story in Diario Libre.
The state CDEEE studied the technical and economical offers made by the companies yesterday. As reported in Diario Libre, Sichouan Machinery Equipment proposes to produce power at 0.257 cents per kWh, plus the commitment of CDEEE to supply the fuel, and purchase 100% of their production. Emirates Power DR is offering 0.3 cents per kWh and requires the CDEEE to purchase 30% of the power produced. This power plant would be built in Azua. For the power plant to be built in Monte Cristi, it offers a price ! of 0.29 cents and requires a commitment from the CDEEE for the purchase of 30% of the power produced. A third company, HN Energy offers to build the two units on the spot modality, or free market, whereby it does not establish a price, nor a minimum purchase percentage.

Electricity WPC and Commitment to Employees, Customers and Service

EnergyPulse published the artícule Utilities Can Learn from the Ritz-Carlton Commitment to Employees, Customers and Service by David Saxby, President, Measure-X, to which I made the following comment:


These are great insights for the End-State of the electricity industry, when Electricity WPC (Without Price Control) is enabled. Under Electricity WPC each retail customers will be able to select the maximum value addition from electricity from competing retailers. Vertical integration and re-regulation include hidden supply security cross-subsidies from retail customers to other customers, which lead to great value destruction.

To develop innovative business models required to compete, successful retail marketers should consider the advice from the Ritz-Carlton. The opportunity to start with a clean slate to engineers the integrated business processes will lead to large productivity improvements.

To learn more about Electricity WPC, please read the first comment to Strategic Perspectives on Utility Enterprise Solutions, and the lengthy discussion under Ferdinand E. Banks article A Few More Unfriendly Comments on Electric Deregulation, where the concept WPC was borne to replace the confusion between re-regulation and deregulation.