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Federal Int'l seen entering wholesale power market
Federal Int'l seen entering wholesale power market

(2007-06-19)

  MAINBOARD-listed Federal International intends to participate in Singapore's wholesale electricity market, with plans to build as much as 25 megawatts of generation capacity here, OCBC Investment Research said in a report yesterday.

  Federal's 60 per cent-owned subsidiary Banyan Utilities (BU), which last Friday announced its foray into the power sector with its first 5MW power plant project for Natural Fuel (NF) on Jurong Island, is believed to be discussing with the Australian biofuel maker further cogeneration expansion plans.

  'We understand that BU is in discussions with NF to build a second co-gen plant to support the latter's Jurong Island facility and this could happen over the next three to five years,' OCBC Investment Research analyst Carey Wong said.

  BU is also in the process of obtaining a wholesale licence to sell any surplus output from the co-gen plant to third parties.

  'In total, BU plans to generate some 25 MW of electricity so that it could participate in the wholesale market. BU believes it could potentially achieve $300 million in revenue over a 12-year period,' the analyst said.

  Additionally, as a clean fuels plant, it hopes to generate some 10,000 tonnes of carbon credits which could be sold and which will generate additional revenue. 'Over the longer term, BU intends to diversify into district cooling and water desalination plants,' the OCBC report said.

  BU is the latest player to enter the liberalised electricity market here, following TPGS Green Energy - a joint venture of Tuas Power and gas importer Gas Supply Pte Ltd - which recently started selling similar 5MW co-gen units to pharmaceutical plants in Tuas.

  Also taking on the bigger gencos here, newcomer Keppel Energy has just started commercial operations at its mid-size 500-MW co-gen plant, while Island Power is pushing ahead with plans for its 785-MW co-gen plant.

  BU's initial power and steam purchase agreement with Natural Fuel - worth $54 million over 12 years - involves the construction of a 5MW co-gen plant costing $20.5 million.

  The plant is expected to be operational by the second quarter next year.

《The Business Times》


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