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Commercial Operation of Nam Theun 2 Hydropower Project Set For Early 2010
The Nam Theun 2 Hydropower Project in Laos, close to completion, has put back commercial operations to early 2010. Project revenues and royalties to the Lao government have started to accrue. Environmental and social programs are progressing well.
Testing of the turbines that will generate electricity for export to Thailand commenced in June 2009. The testing regime has revealed some technical problems that are being currently rectified through engineering modifications. Specifically, the turbines are not operating at peak efficiency in the mid-power range. This complication restricts the operating company’s management options for the facility and thus, the Commercial Operations Date (COD) for selling electricity to Thailand and Laos has been deferred to the first quarter of 2010. This will give the head contractor, Electricité de France, more time to adapt the turbines to ensure reliable and stable electricity output.
Commenting on the situation, Mr Jean Pierre Katz, Chief Executive Officer of operating company the Nam Theun 2 Power Company (NTPC), stated that “such engineering problems are not unusual for turbines in hydropower facilities. This is why the Project has a meticulous testing protocol, to ensure safety and to identify operational complications before commercial operations can commence. NTPC will assume ownership of the turbines and other project assets once peak performance is fully established. To minimise delays, NTPC hopes to progressively introduce the turbines into service as the output quality of each unit is assured”.
NTPC and its shareholders have ensured that all contractual obligations stipulated in Project Agreements in case of delay are met. The company will keep stakeholders updated as progress towards COD occurs.
In late September, NTPC received its first revenues from electricity sales to Electricité du Laos, for test energy delivered to the Lao grid during August 2009. This payment, combined with revenues received in October for water releases made from the Nakai Dam to the Theun Hinboun Power Company earlier in the year, has allowed NTPC to prepare its first royalty payment to the Lao government. The first test energy payments to the project from the Electricity Generating Authority of Thailand are also expected in October 2009.
In addition, NTPC is preparing its first Taking-Over Certificate for project infrastructure, signalling that National Road 12, from Thakhek to Gnommalath, is on the verge of completion. The road, constructed by Ital-Thai Development, will soon be handed over to the Lao government as a national asset. Travel time from Thakhek to Gnommalath, which before the Nam Theun 2 Project took up to six hours during the wet season, has now been cut to less than one hour thanks to the road.
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The Nam Theun 2 Power Company (NTPC) is the developer and operator of the Nam Theun 2 Hydroelectric Project in the Lao PDR. The Project is a public-private partnership designed to generate electricity for export to Thailand and domestic use in Laos. Revenues accruing to the Lao government during NTPC's concession period, estimated at over US$2 billion, are to be used to fund poverty alleviation in the country. Nam Theun 2 is structured as an industrial and a development Project which places great emphasis on protection of the environment and sustainable social programmes that will improve the livelihoods of people in the Project area. After 25 years of operation from 2010, the Project will be transferred to the Lao State. See www.namtheun2.com.